Lewis Group Limited. JSE: LEW

Lewis Group shares

Background of Lewis Group

  • Lewis Group is a major South African credit retailer operating in the household furniture and electrical appliance markets, through its three trading brands Lewis; Best Home and Electric; and Beares.

  • The group’s history stems back to 1934 when it was founded in Cape Town. Today, Lewis Group has more than 700 stores across urban and rural areas throughout South Africa, targeted at the middle to lower income markets. There are also stores spread across Botswana, Swaziland, Lesotho and Namibia, which account for 14% of group revenue.

  • Lewis Group shares have been available to buy under the General Retailers sector of the Johannesburg Stock Exchange (JSE) since 2004. Credit sales accounted for 69% of total sales in the 2015 financial year. Monarch Insurance is the group’s short-term insurance subsidiary, offering cover for sale to customers purchasing merchandise on credit. Lewis Group has a JSE market cap of R4.24 billion, with Lewis Group share price hampered by a reduced willingness of customers to buy product.

Lewis Group Shares Growth Driver

  • Lewis Group share price and performance have been challenged recently by adverse economic conditions which have restrained consumer spending, compounded by the introduction of affordability assessment regulations by the National Credit Regulator. This was reflected in a 10.3% decline in credit sales for the second half of the 2016 financial year. After overall merchandise sales increased by 8.8% in the first half of the year, increasingly challenging trading conditions resulted in a 2% decline in the second half. Sales were further affected by aggressive pricing from a major competitor ahead of store closures.

  • 61 Beares stores were acquired by the group in 2014, and the company is still in the process of being fully integrated into Lewis Group. Impacted by the Beares integration costs and slower revenue growth, the group’s operating margin contracted to 14.1% from 19.4% in 2015. Operating profit was also 25.7% lower at R815 million. A total of R200 million was invested in a portfolio of 56 new Ellerines and Beares stores in four southern African countries, in a bid to increase presence outside South Africa.

  • Lewis Group is also moving Monarch Insurance from term to monthly insurance policies, which is forecast to significantly reduce the capital required by this subsidiary.

Lewis Group Investor Tip

  • Lewis Group share price has been weighed down by the challenging trade conditions dropping from a high of R100 in 2015 down to R43.20 by August 2016. The group expects these conditions to remain challenging in the short term, but says that it is strongly cash generative, with low levels of gearing at 25.5% reflecting a strong balance sheet. Still confident in the group’s medium and long term prospects, the board still maintained dividends of 517 cents for the 2016 financial year. With a significant reduction in the footprint of a major competitor, as well as expansion outside South Africa, Lewis Group is well positioned to grow market share across all its trading brands and boost Lewis Group share price. Investors may be able to buy Lewis Group shares at an undervalued price.

Lewis Group Major Shareholders

Trimark Global Endeavour Fund, Lewis Stores, Government Employees Pension Fund, Trimark Global Balanced Fund.

  • Sector

    Consumer Discretionary

  • Industry

    Retail – Discretionary

  • Sub industry

    Home Products Stores

How to buy Lewis Group Shares

  • Lewis Group : How to buy Lewis Group Shares Online

    We have made it simple to buy JSE listed firm shares online. The easiest way to buy Lewis Group shares or stocks is to; start by submitting the ‘BUY THIS SHARE’ form. Next, one of our experienced and certified stock brokers will personally get in contact with you to discuss your custom stock request. Finally, a stock advisor will confirm the amount of shares you are looking to invest in Lewis Group and assist you with the setup and management of your stock portfolio account.

  • Here are the steps you must follow to Buy / Purchase Lewis Group shares with utmost confidence:

    1. Start by Filling in the BUY THIS SHARE form.
    2. Insert your name, email, telephone number and monthly remuneration.
    3. Then, Indicate the amount you are looking to invest in Lewis Group.
    4. Click the “ INVEST NOW” button
    5. Once we have received your info, a dedicated stock advisor will personally call you back to discuss your personal share request.
    6. Lastly, your newly appointed personal stock advisor will handle all account setups and reporting as stipulated by the financial services board of South Africa (FSB)
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<a href="https://www.sashares.co.za/lewis-group-shares">Credits: SA Shares™</a>
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