JD Group lifts full-year earnings

Revenue increased 25% to R15.7 billion and operating profit was up 39% to R1.06 billion.

The company described 2011 as a 'watershed' year.

"The strategy of separating out Furniture Retail from Financial Services embarked upon three years ago, started to deliver the envisaged financial returns and secondly, the acquisition of Unitrans Auto and Steinbuild from 1 July added complementary retail assets which further diversifies the group from its reliance on furniture retail" it said in a statement.

The JD Group now comprises six divisions, including Furniture Retail, Cash Retail, Automotive and Home Improvement on the retail side, with Financial Services and New Business Development, which provides a consumer finance offering to all its retail formats.

The results for the year include Unitrans Auto and Steinbuild for two months as well as a change to calendar month-end in Furniture Retail and HiFi Corp resulting in a 50-week trading year for these two divisions.

The inclusion of Unitrans Auto and Steinbuild added R2.4 billion to revenue, but the two weeks lost by Furniture Retail and HiFi Corp reduced turnover by R282 million when compared to the prior year.

Turnover was up 32% to R11.7 billion for the period.

The group's Furniture Retail division reported full-year results with operating profit up 73.1% to R315 million. On a like-for-like basis, if the division had reported for a full 52 weeks, sales growth would have been a respectable 11.8%.

Its Cash Retail division, comprising Incredible Connection and HiFi Corp, reported a 17.9% growth in operating profit to R224 million in 2011. Sales on a like-for-like basis were up by 7.4% if HiFi Corp sales were included for the full 52 weeks.

"Our Financial Services division, which now includes the results of Maravedi that was previously reported as part of the New Business Development division, continued its impressive performance by generating an operating profit of R723 million," JD Group said.

Especially pleasing, the group added, was the reduction in debtors cost to R675 million from R753 million in 2010 and the impairment ratio of 9.2%.

The sale of Polish furniture retailer Abra to Steinhoff Europe became effective on 1 September 2011.

The results of Abra have been shown separately as a discontinued operation, JD Group said.

The division reported a loss of R1 million for the year against a profit of R15 million in 2010.

The New Business Development division, which now only consists of Blake, generated an operating profit of R30 million from R15 million in 2010, it said.

"It is also gratifying to report on the results of our newly acquired businesses Unitrans Auto and Steinbuild. The two businesses generated operating profits for the two months since acquisition amounting to R59 million," the retailer commented.

Looking ahead, executive chairman David Sussman said the group had never been in a better position.

"We will be opening in excess of 70 new stores in the 2012 year," he added.