JD Group, South Africa's largest furniture retailer, said it had entered "unchartered territory" as the country's lengthy consumer boom continued.
JD Group, which owns chains such as Joshua Doore, Morkels and Hi-Fi Corporation, has enjoyed the benefits of an unparalleled consumer spending spree for nearly four years.
Jan Bezuidenhout, the corporate services director, speaking after the company released first-half financial results yesterday, said he saw no reason for the lengthy positive economic cycle to end, "unless an outside factor" hit the country.
When asked if he expected current growth in sales rates to continue at the same rate, he would only say "that we will be happy to maintain the current 10 percent to 11 percent growth rates in our credit stores".
In the six months to February, overall group revenue, including the newly acquired Connection Group, was up 18 percent to R6.1 billion, compared with the same period in the previous year.
Headline earnings a share at JD Group were up 22 percent to R4.583.
Gryphon Asset Management chief investment officer Abri du Plessis described the results as "smack on with what they told everyone".
Bezuidenhout said JD Group had never before had consumers with such healthy balance sheets.
"We have had high cash sales growth rates and now I expect credit sales to increase," he said.
Du Plessis agreed with Bezuidenhout, saying "the quality of the debtors book has improved when I had expected it to go the other way".
He said that he did not think it was window-dressing and that the consumer, despite increasing debt levels, was still in a healthy financial state.
Du Plessis added that the deflation problem for JD Group in imported electronic goods also appeared to be stabilising.
The high rate of price reductions at cash retailer Hi-Fi Corporation had in the past put this division under pressure.
Bezuidenhout said Hi-Fi Corporation had experienced "an uptick in sales since January" and that this division would increase stores by 25 percent over the next year to total about 25 across the country's urban areas.
Referring to the credit retailers such as Joshua Doore, he said following increasing consumer access to electrification sales of white goods, such as stoves, had in the past three years outstripped furniture sales. But now that people had these more basic assets, they were moving to upgrade their furniture. The margins on furniture were higher than on white goods, he added.
JD Group shares gained 1.12 percent to close at R90. The general retailers sector was up 0.17 percent.
