Price deflation hurts Incredible Connection

JSE-listed furniture and appliance retailer JD Group has said that sales mix, together with price deflation, impacted negatively on margins at HiFi Corp and Incredible Connection.

On Monday (27 August), the group reported a 61% rise in revenue to R25.3 billion for the 10 months ended June 2012, compared to results for the 12 months ended August 2011, following a change in year-end.

It highlighted an increase of 37% in operating profit to R1.4 billion with its financial services division generating an operating profit of R760 million.

The board declared a final dividend per share of 132 cents for the period (2011: 100 cents) bringing the total dividend to 232 cents per share for the period under review (FY 2011: 200 cents).

The cash retail division, which includes the results of SteinBuild, reported operating income of R177 million for the reporting period, down from a full-year return of R226 million in 2011.

“The sales mix, together with price deflation, impacted negatively on margins at HiFi Corp and Incredible Connection,” JD Group said.

For the cash retail division, revenue for the 10 month period climbed to R5.053 billion, from R4.8 billion for the full-year in 2011.

Capital expenditure was up to R87 million for the division (FY 2011: R48m), while the operating margin for the sector dropped to 3.5%, from 4.7% in 2011.

The number of stores in the retail cash division climbed to 164, from 155 for the 12 months ended August 2011, with revenue per store put at R30.811 million (FY 2011: R30.968m).

The number of employees remained stable at 5,246.

Late last month, Incredible Connection launched the first of its new micro-format e-stores in Vredenburg on the West Coast.

The new format e-stores, only 80 square metres in size, are supported by an e-commerce offering aimed at outlying areas and small towns in order to provide those customers access to a wide range of technology, the group said.

The company said it plans to roll out more stores by the end of the year.

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Price deflation hurts Incredible Connection