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Send  Print  Share  RSS  Twitter  15 Nov 2010

JSE Results: JD Group


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Johannesburg, Nov 15 (I-Net Bridge) - Furniture retailer JD Group (JDG) on
Monday reported diluted headline earnings per share of 300.1 cents for the year
ended August 2010 from 44.2 cents a year ago.

A final dividend of 80 cents per share was declared from 41 cents a year
ago, for a total dividend for the year of 150 cents compared with 41 cents a
year ago.

Attributable earnings rose to 501 million rand from 75 million rand a
year ago, while operating profit grew 20% to 772 million rand. Contributing to
the operating profit increase was the substantial reduction in debtors' costs,
which came down 32% to 356 million rand year-on-year, the company said.

Executive Chairman David Sussman said following a very poor first half of
the year, the furniture and cash divisions came back strongly in the second six
months with sales up 9%. For the full year sales were up 3%.

Sussman attributed the reduction in debtors' costs to the strategies that
have been in place for some time now.

"We had a long-term vision to separate retail from financial services ,"
he said, "which involved taking one step backwards before we could move forward,
but the results are now evident in our high quality debtor's book. Our focus on
the conservative management of our advances has unlocked value, which is
apparent in these results and which bodes well for the future."

Cash flow from operations was particularly strong, with 84% of operating
profit converted into cash over the year. Costs were well contained at an
overall 5% increase over the year. This would have been restricted to 2.3% if
the additional costs of Blake and Maravedi, which were not fully consolidated in
2009, were eliminated.

"Equally pleasing, and a tribute to our people, is that employee
productivity was better at R660 000 revenue per employee, an 8.6% increase on
2009" Sussman said.

The Traditional Retail businesses increased revenue by 2.6% while Cash
Retail, comprising Incredible Connection and Hi-Fi Corporation, showed an
increase of 8.4% for the year. The results highlight a very different pattern
between the first and second six months. Traditional Retail's first 6 months
turnover was down 2% due to a very weak festive season but was up by 9% in the
second half and operating profit up by over 100 million rand.

Group merchandise sales were 6.7% higher while revenue increased by 4.1%
in the second half. This translated into a 224 million rand, or 127%, increase
in operating profit for the second half.

The Financial Services division showed a 69% increase in operating
profit, attributed to the significant improvement in the quality of the debtors'

The strong rand, coupled with difficult trading conditions, led to a
24.8% decline in rand sales in Abra, the group's Polish operation. Nonetheless,
the division remains profitable albeit dependent on an economic recovery in
Europe and a strengthening of the Zloty against the Rand.

The group's balance sheet remains strong. The average length of the
debtors book is 16.4 months, down marginally from last year. Net
interest-bearing debt to equity is a low 12.9% providing the company with the
opportunity to fund substantial organic growth.

Sussman is cautiously positive about the year ahead. "I am convinced
that the first six months of the current financial year will show meaningful
growth, and we should unquestionably outperform the first half of last
year. However, we are still at the mercy of the vagaries of the economy,
including an improvement in employment levels and housing starts. Nevertheless,
I am extremely positive about the future and am looking forward to sustained
improved performance."

I-Net Bridge, Tel: +27-11-280-0644,

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