Full Year 2026 Lewis Group Ltd Earnings Call Transcript
Key Points
- Revenue increased by 11.1%, supported by merchandise sales growth of 7.3%.
- Gross profit margin settled at a healthy 43.7%, with operating profit margin expanding by 110 basis points to 23.8%.
- Earnings per share increased by 13% and headline earnings per share expanded by 18.3%.
- The company opened a record number of 58 new stores during the period, exceeding the target of 40.
- Dividend payout more than doubled over the last three years, with a current dividend yield of 11.4%.
- Nonperforming accounts as a percentage of the total debtors book rose from 7% to 9.1%.
- The credit application decline rate increased from 38.5% to 41.8%, indicating consumer strain.
- The interest rate environment remained constrained, with insufficient cuts to stimulate the economy.
- High levels of unemployment negatively impacted sales growth and collections.
- The specialty division posted a loss of ZAR53 million after impairments, despite some recovery in sales.
A very good afternoon, and welcome to all our shareholders, colleagues and all other interested parties. Joining me today, Jacques Bestbier, our CFO; and Graeme Lillie from Tier 1 Investor Relations. On our agenda, we'll start off with a review of 2026, followed by our debt analysis.
We'll then move on to our financial results, followed by the target and outlook section of the presentation. And at the end of the presentation, Graeme will gladly read all of your questions that you can submit during the course of the presentation.
Ladies and gentlemen, it is with pleasure that I report a solid set of results this afternoon. The Lewis Group demonstrated strong sustained growth momentum. This was driven by the disciplined execution of strategy and the unwavering dedication of our staff. Revenue increased by 11.1%, supported by a merchandise sales growth of 7.3%. Gross profit margin settled at a healthy 43.7% and our operating profit margin expanded by 110 basis points to a very encouraging 23.8%.
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