Johannesburg - South African retailer Edcon‚ which delisted
from the JSE in 2007‚ on Tuesday reported a 9.0% rise in revenue to R27.3bn for
the year to March 31‚ as consumer demand remained resilient and the positive
impact of various strategic initiatives gained momentum.
The group‚ whose portfolio includes 1 167 stores‚ said
retail sales climbed by 8.6% to R24.6bn‚ while average trading space increased
1.4% to 1.3 million SQUARE METRES. Same-store sales grew 7.4% during the
Also on Tuesday‚ Edcon announced its intention to sell its
private-label store-card portfolio to Absa for about R10bn and enter into a
long-term strategic relationship for the provision of retail credit.
“The transaction represents an important component of
Edcon’s strategic plan and will facilitate growth‚ both in SA and the rest of
Africa‚ by allowing for a greater focus on core retail operations and providing
a more efficient funding structure to grow credit sales‚” the company said.
For the period under review‚ adjusted earnings before
interest‚ taxes‚ depreciation and amortisation increased 11.5% to R4.0bn.
Credit sales as a percentage of total retail sales grew to
51% from 49% in the prior year‚ and the
ratio of bad debts to average debtors improved significantly‚ ending the year
at 6.7%‚ from 10.9% the year before.
Edgars Department Stores‚ which includes Edgars‚ Boardmans
and Red Square‚ increased retail sales by 8.7%‚ mainly due to the conversion of
Discom outlets to Edgars Active stores.
Like-for-like retail sales in this division grew by 4.9%.
CNA’s sales climbed by 8.5% - and 7.7% on a like-for-like
basis - owing to growth in sales of mobile phones and digital products.
Retail sales in the Discount division‚ which includes Jet‚
Jet Mart and Legit‚ increased by 8.4% despite Discom stores‚ which previously
included in the Discount division‚ being converted to Edgars Active stores.
Edcon’s gross profit margin narrowed to 36.6%‚ from 36.9% in
the previous year.
Edcon CEO Jurgen Schreiber said the group was cautiously
optimistic about the year ahead and medium-term fundamentals in the economy.
“We expect the momentum from initiatives started in the past
year and our strategic relationship with Absa to bolster growth in the future‚”