JD Group's CEO resigns

The retailer owns brands such as Joshua Doore‚ Incredible Connection‚ Hi-Fi Corporation‚ Morkels‚ Bradlows and Russells.

Kirk‚ who joined the group as financial director of Connection Group Holding in 1997‚ has resigned from the boards of JD Group and various subsidiary companies with immediate effect.

He will leave the group altogether at the end of June‚ to be succeeded by David Sussman‚ founder and executive chairman.

On Thursday‚ JD Group reported a slight rise in diluted headline earnings per share to 227c for the six months‚ versus a pro forma 223.3c. Headline earnings per share rose to 234.4c‚ from a pro forma 226.8c.

It declared an interim dividend per share of 115c.

Revenue was up 6.7% at R16.4bn from R15.3bn‚ while earnings before interest‚ tax‚ depreciation and amortisation rose to R1.1bn from R969m previously. Operating profit was up at R727m‚ from R723m pro forma.

At the previous interim stage‚ the group reported interim results for the four-month period ended December 2011‚ following a change in the financial year-end to June 30.

The company said new enterprise resource planning systems for its retail and consumer finance divisions would help it improve customer service and inventory management‚ and offer diverse consumer finance products.

"The investment in and roll-out of our central distribution centres at a cost of R728m to date has enabled the group to improve customer satisfaction by reducing delivery time and increasing stock availability‚" the group said.

JD Group's unsecured lending book had grown to R2.2bn over the past two years‚ "and provides the group with a valuable source of diversification away from the secured furniture retail loan environment"‚ it said.

"We have maintained our cautious approach to personal loan credit extension by limiting unsecured loans to a maximum term of 24 months and to a maximum loan value of R25‚000‚" JD Group said.

"The average loan size is R10‚000. These loans are only granted to our lower-risk customers‚ with 50% of these to existing furniture retail customers."

It said it would focus on reducing the average loan size‚ being more selective in the acquisition strategy‚ improving collection rates and protecting the quality of the returns that are generated.

The retail division‚ housing the furniture chains‚ Incredible Connection‚ Hi-Fi Corporation and SteinBuild‚ generated revenue growth of 4.2%.

"The acquisition of Hardware Warehouse is expected to further bolster the financial performance of SteinBuild‚" the group said.

The consumer finance division generated satisfying returns and reported growth in risk-adjusted consumer finance income of 16.3% to R1.7bn and a return on equity of 25%.

At 1pm‚ shares in the retailer were down 2% at R40.81.