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Cape Town - JD Group [JSE:JDG] on Monday posted a massive annual loss of R1.923bn compared with a profit of R632m reported in the previous comparable period.
The board also resolved that no dividend will be declared.
The ailing retailer said in a Sens announcement that revenue increased by 4.9% to R30.6bn from R29.2bn for the year to end June.
The share price recouped earlier losses to trade slightly down at R22.75 by 15:43 on the JSE, in line with a slightly weaker All-share index.
The credit-based furniture retailer saidon Monday that the year under review remained very challenging as customers' disposable income continued to decline, impacting negatively on both the retail and consumer finance businesses.
Operating profit from continuing operations decreased to R537m from R1.0bn. This stemmed mainly from difficult operating conditions in the household goods, appliances and electronics retail environment.
JD Group's retail business comprises of 14 retail chains, including Joshua Doore, Russells, HiFi Corporation, Incredible Connection, Morkels, Price 'n Pride and Bradlows.
Operating expenses pertaining to continuing operations increased by only 3.1% to R7.4bn.
Headline earnings per share from continuing operations amounted to 93.9 cents from 397.1 cents the previous year and loss from discontinued operations for the year was at R2.1bn.
The struggling furniture retailer also stated that an offer was accepted for the sale of the consumer finance division."The sale of the consumer finance division will enable the company to focus on the strategic repositioning and growth of its retail operations, while still availing its customers with access to affordable consumer finance," said JD Group.
JD Group said in a statement last week it had agreed to sell its finance unit to an international consumer finance group, after getting hit by exposure to the troubled consumer debt market, reported Reuters.
It added, at the time, that the deal, which does not include its insurance operations, was yet to be finalised.
For years JD Group and other retailers have sold sofas and dining sets to lower-income customers on credit.
JD Group's results underlines the tough trading environment facing retailers, as consumers struggle to service their debt. Last month Shoprite reported its slowest profit growth in 15 yearsfor the 12 months to June 30 and African Bank's furniture arm Ellerine Holdings applied for business rescue.
- Fin24, Reuters
