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Johannesburg - Retailer JD Group [JSE:JDG] on Monday reported diluted headline earnings per share of 139.2c for the six months ended February 2010 from a loss of 18.9c a year ago.
The group declared an interim dividend of 70c per share compared with no dividend for the same period a year ago.
Headline earnings amounted to R231m after a R30m loss a year ago, while revenue grew to R6.835bn from R6.783bn.
"A tough economic climate, an indebted consumer base and substantial unemployment - hardly an environment for buoyant sales," was how David Sussman, chairperson of JD Group, described the period under review.
"This was a difficult period," said Sussman, "especially November and December, where consumers cut back expenditure at all levels. Couple this with a change in sales mix, resulting in a decrease of 7.6% in credit sales, and it has not been an easy 6 months."
However, there were some positives, he said. Turnover in all areas of the business has showed a pleasing upward trend since December 2009, but not fast enough to compensate for the demanding months in the first quarter.
In addition, the effects of the business plan first initiated in 2006 are reflected in operating efficiencies throughout the business, with expenses being contained in all areas.
Particularly pleasing for the group was the significant reduction in debtors costs, which came down by 19% to R454m, with a 23% improvement in the Financial Services division alone. This is largely due to the success of the centralisation of the credit granting and credit collections strategy completed in 2009.
The group also remains cash positive, with cash generated from trading operations of R480m.
However, top line sales were down at Traditional Retail due to a subdued Christmas trading period, product margin at Hi-Fi Corporation was down and the strength of the Rand coupled with the reduced availability of consumer credit affected the results at Abra, the group's Polish business.
At a divisional level, Traditional Retail is now moving into an upward trend, with turnover up 6% over the last 4 months. In the Cash Retail division, Incredible Connection continues to produce acceptable results and action is being taken to improve margins at Hi-Fi Corporation.
Hi-Fi Corporation has seen turnover up 12% over the last 4 months. The Financial Services division is poised to take advantage of any increase in credit sales and debtors collections continue to gain traction. In addition, the group's focus on customer service is showing positive results across the board.
Looking ahead to the next six months Sussman said it is hard to make any forecasts in the current environment, but JD Group is encouraged to see turnover consistently up since Christmas.
"We are however mindful of the potential effects of the Soccer World Cup. We do expect an improvement compared to the same period last year, but our focus must remain on doing those things under our control to the best of our ability.
"We will therefore be concentrating on improving customer service, increasing margins where possible, and ensuring that we continue building the solid platform necessary for growth, when it does come."
- I-Net Bridge
The group declared an interim dividend of 70c per share compared with no dividend for the same period a year ago.
Headline earnings amounted to R231m after a R30m loss a year ago, while revenue grew to R6.835bn from R6.783bn.
"A tough economic climate, an indebted consumer base and substantial unemployment - hardly an environment for buoyant sales," was how David Sussman, chairperson of JD Group, described the period under review.
"This was a difficult period," said Sussman, "especially November and December, where consumers cut back expenditure at all levels. Couple this with a change in sales mix, resulting in a decrease of 7.6% in credit sales, and it has not been an easy 6 months."
However, there were some positives, he said. Turnover in all areas of the business has showed a pleasing upward trend since December 2009, but not fast enough to compensate for the demanding months in the first quarter.
In addition, the effects of the business plan first initiated in 2006 are reflected in operating efficiencies throughout the business, with expenses being contained in all areas.
Particularly pleasing for the group was the significant reduction in debtors costs, which came down by 19% to R454m, with a 23% improvement in the Financial Services division alone. This is largely due to the success of the centralisation of the credit granting and credit collections strategy completed in 2009.
The group also remains cash positive, with cash generated from trading operations of R480m.
However, top line sales were down at Traditional Retail due to a subdued Christmas trading period, product margin at Hi-Fi Corporation was down and the strength of the Rand coupled with the reduced availability of consumer credit affected the results at Abra, the group's Polish business.
At a divisional level, Traditional Retail is now moving into an upward trend, with turnover up 6% over the last 4 months. In the Cash Retail division, Incredible Connection continues to produce acceptable results and action is being taken to improve margins at Hi-Fi Corporation.
Hi-Fi Corporation has seen turnover up 12% over the last 4 months. The Financial Services division is poised to take advantage of any increase in credit sales and debtors collections continue to gain traction. In addition, the group's focus on customer service is showing positive results across the board.
Looking ahead to the next six months Sussman said it is hard to make any forecasts in the current environment, but JD Group is encouraged to see turnover consistently up since Christmas.
"We are however mindful of the potential effects of the Soccer World Cup. We do expect an improvement compared to the same period last year, but our focus must remain on doing those things under our control to the best of our ability.
"We will therefore be concentrating on improving customer service, increasing margins where possible, and ensuring that we continue building the solid platform necessary for growth, when it does come."
- I-Net Bridge
