Edcon lifts revenue
Fin24 - Jun 7th 2012, 09:16
Johannesburg - South African retailer Edconâ€š which delisted from the JSE in 2007â€š on Tuesday reported a 9.0% rise in revenue to R27.3bn for the year to March 31â€š as consumer demand remained resilient and the positive impact of various strategic initiatives gained momentum.
The groupâ€š whose portfolio includes 1 167 storesâ€š said retail sales climbed by 8.6% to R24.6bnâ€š while average trading space increased 1.4% to 1.3 million SQUARE METRES. Same-store sales grew 7.4% during the period.
Also on Tuesdayâ€š 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.
â€śThe transaction represents an important component of Edconâ€™s strategic plan and will facilitate growthâ€š both in SA and the rest of Africaâ€š by allowing for a greater focus on core retail operations and providing a more efficient funding structure to grow credit salesâ€šâ€ť the company said.
For the period under reviewâ€š adjusted earnings before interestâ€š taxesâ€š 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 yearâ€š and the ratio of bad debts to average debtors improved significantlyâ€š ending the year at 6.7%â€š from 10.9% the year before.
Edgars Department Storesâ€š which includes Edgarsâ€š Boardmans and Red Squareâ€š increased retail sales by 8.7%â€š mainly due to the conversion of Discom outlets to Edgars Active stores.
Like-for-like retail sales in this division grew by 4.9%.
CNAâ€™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 divisionâ€š which includes Jetâ€š Jet Mart and Legitâ€š increased by 8.4% despite Discom storesâ€š which previously included in the Discount divisionâ€š being converted to Edgars Active stores.
Edconâ€™s gross profit margin narrowed to 36.6%â€š 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.
â€śWe expect the momentum from initiatives started in the past year and our strategic relationship with Absa to bolster growth in the futureâ€šâ€ť he said.
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