NO EASY ROAD AHEAD

Finweek English Edition - - INVESTMENT -

Lewis is one of the pre­ferred re­tail­ers, or per­haps more cor­rectly mi­crolen­ders, with a re­tail di­vi­sion that gen­er­ates the need for loans. The com­pany’s trad­ing up­date was bleak with rev­enue down 2.1%, sales off 2.3% and debtors costs up 30%. The in­ter­est rate in­crease won’t di­rectly hit Lewis as it is al­ready charg­ing at the max­i­mum rate, but it will make it harder for its cus­tomers to re­pay and/or en­ter new hire pur­chase agree­ments. So while things are al­ready tough in this space, it’s only go­ing to get tougher go­ing for­ward.

Lewis Group another 20%, and Stan­dard Bank be­ing able to force it to buy the last 20% via a put op­tion. The price for the 60% hold­ing is sub­ject to NAV but looks like its around $700m. So what will it do with this pile of cash? With the group now stream­lined as an African bank, will some go to ex­pan­sion or maybe also a spe­cial div­i­dend?

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