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JD Group poised for growth

Nov 14 2011 15:52
I-Net Bridge
Johannesburg - With the acquisition of Steinhoff International Holdings [JSE:SHF], Unitrans Auto and Steinbuild, JD Group [JSE:JDG] said it is well positioned for the future.

"The past three years, whilst challenging, have set a solid platform from which to grow. Our acquisition of Unitrans Auto and Steinbuild diversifies our retail footprint in line with our strategy," group CEO Grattan Kirk said on Monday.

The company acquired Steinhoff's South African retail assets in July for a cash payment of about R702m and the issue of JD Group shares for the remaining R2.467bn. The deal also included the sale of JD Group's Polish furniture retail business, Abra Spolka Akcyjna (Abra) to a Steinhoff associate for R134.1m.

JD Group on Monday reported that headline earnings per share were up 34% to 407.7c for the full-year ended August 2011, declaring a final dividend of 100 cents from 80c per share previously.

The company, which described 2011 as a watershed year, said revenue increased 25% to R15.7bn, while operating profit was up 39% to R1.06bn and turnover was accelerated 32% to R11.7bn for the period.

"The strategy of separating out furniture retail from financial services embarked upon three years ago, started to deliver the envisaged financial returns," the company said.

The company now comprises six divisions, including furniture retail, cash retail, automotive and home improvement on the retail side, with financial services and new business development, which provides a consumer finance offering to all its retail formats.

"We grew our top-line sales on a like-on-like basis in the furniture side by nearly 12% and there's hardly any inflation on that side of the business. Clearly we're attracting more customers and the quality of our debtors' books shows they have the capacity to service the debt," executive chairperson David Sussman told I-Net Bridge/BusinessLIVE.

The results for the year included Unitrans Auto and Steinbuild for two months as well as a change to calendar month-end in furniture retail and HiFi Corp, resulting in a 50-week trading year for these two divisions.

"The inclusion of Unitrans Auto and Steinbuild added R2.4bn to revenue, but the two weeks lost by furniture retail and HiFi Corp reduced turnover by R282m when compared to the prior year," JD Group said.

Sussman commented that the group had never been in a better position.

"We've taken all the pain, we've done all the hard work and now we can really focus on growing our business. We will be opening in excess of 70 new stores in the 2012 year," he told I-Net Bridge/BusinessLIVE.

Sussman added that though the new stores would primarily be located in rural areas, expansion into Africa was not off the cards.

"With the Steinhoff deal their stated objective was to use JD Group to expand into the rest of Africa, so in time we will," he said.


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