UPDATE 2-Home makeovers boost S.Africa's Lewis post lockdown, declares dividend

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UPDATE 2-Home makeovers boost S.Africa's Lewis post lockdown, declares dividend

* FY HEPS down 30.8%

* June & July sales surge on pent up demand

* Declared dividend

* Share price increased to 11.25% as of 1350 GMT

* Lounge suites, bed sets and TVs hot sellers

(Recasts with CEO comments, shares)

By Tumelo Modiba

JOHANNESBURG, Aug 25 (Reuters) - South Africa's Lewis Group LEWJ.J on Tuesday declared a dividend and said sales had picked up strongly as a result of pent up demand following the country's lockdown, sending its shares up by more than 10%.

The furniture and appliance retailer lost crucial trading days at the end of March when non-essential retailers were closed due to coronavirus restrictions, leading it to post a close to 40% slump in annual earnings.

But it said sales were now rising as consumers working from home looked to revamp their living spaces.

Merchandise sales rose by 22.3% in June compared to the same month a year earlier and by 16.8% in July, Chief Executive Johan Enslin said during a results presentation, adding that he expects August sales to top those in July.

"It is really clear that people are updating their living space, we are selling a lot of lounge suites and bed sets and televisions," he told Reuters in an interview.

Retail sales data showed that the category accounting for household furniture, appliances and hardware was the only one to grow in June, when overall sales fell 7.5% compared to last year. Group said it had lost merchandise sales of about 80 million rand ($4.73 million) and customer credit account collections of 180 million rand as a result of the restrictions.

Its merchandise sales rose by 6.9% in the first 11 months to February, however sales growth for the 12 months ended March 31 slowed to 4.7%, as the first few days of lockdown took their toll.

Headline earnings per share - the main profit measure in South Africa - fell by almost a third to 260.2 cents, verses 376.2 cents a year earlier, also due to a provision for unpaid customer debts.

The company declared a final dividend of 65 cents per share, around a fifth lower than last year. ($1 = 16.9039 rand)

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