Lewis Posts 18% Drop in Second-Half Profit as Bad Debts Rise
Lewis Group Ltd., a South African furniture and electrical-goods retailer, posted an 18 percent drop in second-half profit as more customers defaulted on payments and the company increased provisions for bad debts.
Net income fell to 293.7 million rand ($33.8 million) in the six months through March 31 from 357.1 million rand a year earlier, according to calculations based on full-year figures released today by the Cape Town-based company. Sales increased 5.3 percent to 2 billion rand in the six-month period.
South Africa’s central bank raised its benchmark interest rate six times in the year through June 2008, pushing consumer debt levels to a record. While the Reserve Bank has started cutting interest rates, unemployment is increasing as the economy contracts, undermining consumer spending.
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