Upbeat JD Group reports profit growth
Fin24 - May 16th 2011, 12:00
Johannesburg - Retailer JD Group [JSE:JDG] on Monday reported diluted headline earnings per share of 200.1c for the six months ended February 2011, from 139.2c a year ago.
The group declared an interim dividend of 100c per share from 70c for the same period a year ago.
Operating profit was up 38% at R515m, while revenue grew 9% to R7.5bn. The group said that while much work remained to be done in respect of maximising its ultimate potential, key tangible improvements had been realised in the last six months.
"The separated financial services and furniture retail divisions continue to pay dividends as both divisions are now totally focussed on their core competencies, both strategically and operationally," it added.
JD Group said trading in its furniture retail division was particularly pleasing with sales up 18% and operating profit up 133% to R294m.
The group saw a further reduction in debtors costs from R427m in 2010 to R344m in 2011 and the impairment ratio reducing from 12.6% to 8.8%.
Sales were up 7.1% in its cash division and this resulted in a 24% increase in operating profit to R97m.
"This was achieved despite the impact of the strong rand and the competitive environment, which resulted in price deflation of up to 16% in certain product categories," it said.
Margins across the group continued to improve as did the performance of the receivables with overall debtors' costs down 15%, resulting in the group increasing profit before tax by 46% to R482m.
The group's Polish business Abra was impacted by the prolonged effects of the recession in Poland and the impact of adverse weather conditions on deliveries.
With regards to its acquisition of Unitrans Auto, Steinbuild and the disposal of Abra, the group said it was anticipating the outcome of the Competition Commission findings to be available before June 30 2011.
Looking ahead, JD Group said the performance of the first six months had given it reason for an optimistic outlook for the second half.
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