IT retailer Connection Group says its decision to cut retail selling prices in light of a stronger rand has been more than vindicated as its stores have achieved significant increases in volumes.
"Categories such as notebooks, personal computers, multifunction printers, entertainment and digital photography have shown substantial growth," says CEO Grattan Kirk.
The group is also passing the benefits of a solid financial year onto its shareholders, with the declaration of a dividend of 25c a share.
Revenue from continuing operations for the 12 months to August rose from R675.83 million to R790.93 million, while pre-tax profit of R43.19 million was 30.1% higher than the R33.2 million of the previous year.
Net profit rose from R23.65 million to R30.06 million.
Photo Connection, Connection Group`s first acquisition since exiting all its non-retail investments, has already begun contributing to the group`s performance. It generated a profit of R2.8 million before interest and tax on turnover of R20 million.
Since the year-end, the group has acquired 12 outlets from Beyond IT. These will be integrated into the Photo Connection business.
"Connection Group expects trading conditions to be positive over the next 12 months assuming that exchange rates and interest rates remain reasonably stable over this period," Kirk says.
The group is planning to achieve growth both organically and acquisitively, although acquisitions will be undertaken only when viable opportunities become evident.
"The group anticipates that given the prospects for Incredible Connection, as well as a full year`s contribution from Photo Connection and Beyond IT, that we will deliver acceptable real earnings growth for the year ahead."
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