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TRUWORTHS INTERNATIONAL
- NET PROFIT ATTRIBUTABLE TO ORDINARY SHAREHOLDERS INCREASES 32,1%
- HEADLINE EARNINGS INCREASE OF 14,4%
- HEADLINE EARNINGS PER SHARE INCREASE OF 12,3%
INCOME STATEMENT
UNAUDITED AUDITED
26 WEEKS ENDED 52 WEEKS ENDED
31 DECEMBER 30 JUNE
1998 1997 CHANGE 1998
NOTE R'000 R'000 % R'000
REVENUE 1 1 027 730 920 515 11,7 1 804 792
COST OF SALES (462 279) (416 890) 10,9 (860 045)
GROSS PROFIT 565 451 503 625 12,3 944 747
OPERATING COSTS (440 590) (402 735) 9,4 (718 703)
OPERATING PROFIT BEFORE
EXCEPTIONAL ITEMS 124 861 100 890 23,8 226 044
EXCEPTIONAL ITEMS 2 3 740 (3 147) (2 036)
NET PROFIT BEFORE
TAXATION 128 601 97 743 31,6 224 008
TAXATION (45 680) (34 222) 33,5 (79 696)
NET PROFIT AFTER
TAXATION 82 921 63 521 30,5 144 312
OUTSIDE SHAREHOLDERS'
INTEREST IN PROFITS (61) (791) (760)
NET PROFIT ATTRIBUTABLE
TO ORDINARY SHAREHOLDERS 82 860 62 730 32,1 143 552
DIVIDENDS (19 054) (5 771) (7 088)
RETAINED PROFIT FOR
THE PERIOD 63 806 56 959 12,0 136 464
TRANSFER (TO)/FROM
NON-DISTRIBUTABLE
RESERVES (20) 2 821 (23 423)
RETAINED PROFITS AT
BEGINNING OF PERIOD 533 131 420 090 420 090
RETAINED PROFIT AT
END OF PERIOD 596 917 479 870 533 131
EARNINGS PER SHARE
(CENTS) 19,1 14,7 29,9 33,6
HEADLINE EARNINGS PER
SHARE (CENTS) 17,4 15,5 12,3 34,1
DIVIDEND PER SHARE
(CENTS) 6,0 5,5 9,1 8,1
WEIGHTED AVERAGE
NUMBER OF SHARES
IN ISSUE (000'S) 433 313 426 251 1,7 427 014
AVERAGE EXCHANGE
RATE (SOUTH AFRICAN
RAND TO AUSTRALIAN DOLLAR) 3,57 3,31 3,25
ABRIDGED BALANCE SHEET
UNAUDITED AUDITED
31 DECEMBER 30 JUNE
1998 1997 1998
R'000 R'000 R'000
CAPITAL EMPLOYED
ORDINARY SHAREHOLDERS'
INTEREST 681 330 547 658 615 581
OUTSIDE SHAREHOLDERS'
INTEREST 2 239 6 816 3 362
TOTAL SHAREHOLDERS'
INTEREST 683 569 554 474 618 943
INTEREST-BEARING
LIABILITIES 119 063 96 476 114 209
802 632 650 950 733 152
EMPLOYMENT OF CAPITAL
PROPERTY, PLANT
AND EQUIPMENT 186 343 151 746 176 190
INVESTMENTS AND LOANS 35 417 36 429 30 526
CURRENT ASSETS 948 479 794 397 780 997
INVENTORIES 207 889 170 249 184 912
ACCOUNTS RECEIVABLE 506 792 467 830 446 842
BANK AND CASH RESOURCES 233 798 156 318 149 243
INTEREST-FREE LIABILITIES 367 607 331 622 254 561
802 632 650 950 733 152
NUMBER OF SHARES IN
ISSUE (000'S) 438 190 426 251 429 526
NET ASSET VALUE PER
SHARE (CENTS) 155,5 128,5 143,3
CLOSING EXCHANGE RATE
(SOUTH AFRICAN RAND
TO AUSTRALIAN DOLLAR) 3,61 3,20 3,56
ABRIDGED CASH FLOW STATEMENT
UNAUDITED AUDITED
26 WEEKS ENDED 52 WEEKS ENDED
31 DECEMBER 30 JUNE
1998 1997 1998
R'000 R'000 R'000
CASH FROM OPERATING ACTIVITIES
CASH FLOW FROM TRADING 86 541 104 535 173 092
WORKING CAPITAL REQUIREMENTS (3 906) (19 892) (64 550)
DEPRECIATION 29 373 25 112 52 926
NET INTEREST RECEIVED 34 419 23 382 52 235
TAXATION PAID (20 895) (7 648) (75 851)
DIVIDENDS RECEIVED 1 857 190 190
DIVIDENDS PAID (9 821) (5 185) (11 683)
NET CASH INFLOW FROM
OPERATIONS 117 568 120 494 126 359
CASH UTILISED IN
INVESTMENT ACTIVITIES (36 649) (45 458) (115 994)
NET CASH INFLOW/(OUTFLOW)
FROM FINANCING ACTIVITIES 4 575 (16 405) 13 951
NET INCREASE IN CASH AND
CASH EQUIVALENTS 85 494 58 631 24 316
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 66 727 42 411 42 411
CASH AND CASH EQUIVALENTS
AT END OF THE PERIOD 152 221 101 042 66 727
NOTES TO THE ABRIDGED FINANCIAL STATEMENTS
UNAUDITED AUDITED
26 WEEKS ENDED 52 WEEKS ENDED
31 DECEMBER 30 JUNE
1998 1997 CHANGE 1998
R'000 R'000 % R'000
1. REVENUE
SALE OF MERCHANDISE 988 225 886 999 11,4 1 744 646
INTEREST RECEIVED
INVESTMENTS 14 509 8 206 76,8 17 661
ACCOUNTS RECEIVABLE 22 816 19 618 16,3 41 713
OTHER INCOME 2 180 5 692 772
1 027 730 920 515 11,7 1 804 792
2. EXCEPTIONAL ITEMS
NET WRITE-DOWN OF
INVESTMENTS (760) (3 147) (2 434)
SETTLEMENT RECEIVED IN
RESPECT OF INVESTMENT IN
HOUSEWARES LTD 4 500 - -
OTHER - - 398
3 740 (3 147) (2 036)
3. HEADLINE EARNINGS
HEADLINE EARNINGS WAS
ARRIVED AT AFTER BRINGING
TO ACCOUNT THE FOLLOWING:
NET PROFIT ATTRIBUTABLE TO
ORDINARY SHAREHOLDERS 82 860 62 730 143 552
EXCEPTIONAL ITEMS* (3 740) 3 147 2 036
(PROFIT)/LOSS ON SALE OF
FIXED ASSETS* (3 660) 99 12
* NET OF TAXATION AND
OUTSIDE SHAREHOLDERS 75 460 65 976 14,4 145 600
COMMENT
- GROUP HIGHLIGHTS
* TRUWORTHS INTERNATIONAL LIMITED ("TI") INCREASED OPERATING PROFIT BY 23,8%
TO R124,9 MILLION.
* NET PROFIT ATTRIBUTABLE TO ORDINARY SHAREHOLDERS INCREASED BY 32,1% TO
R82,9 MILLION.
* NET CASH AND CASH EQUIVALENTS INCREASED BY R85,5 MILLION.
- GROUP RESULTS
DURING THE PERIOD UNDER REVIEW THE GROUP PERFORMED WELL GIVEN THE DIFFICULT
CLIMATE FOR CREDIT FASHION RETAILERS IN SOUTH AFRICA. HEADLINE EARNINGS
INCREASED BY 14,4% TO R75,5 MILLION. THESE EARNINGS EXCLUDE NON-RECURRING
REVENUE OF R7,4 MILLION COMPRISING MAINLY OF PROFIT ARISING FROM THE SALE OF
THE VEHICLE FLEET AS WELL AS SETTLEMENT PROCEEDS RECEIVED IN RESPECT OF AN
INVESTMENT IN HOUSEWARES LIMITED. THE SETTLEMENT REPRESENTS COMPENSATION IN
RESPECT OF THE REDUCTION IN VALUE OF THE HOUSEWARES LIMITED SHARES WHICH DO NOT
FORM PART OF TRUWORTHS' CORE BUSINESS.
THE GROUP REMAINS IN A STRONG POSITIVE CASH FLOW POSITION WITH BANK AND CASH
BALANCES OF R233,8 MILLION COMPARED TO R156,3 MILLION LAST YEAR.
- TRUWORTHS
THE SOUTH AFRICAN BASED COMPANY PERFORMED PARTICULARLY WELL WITH AN INCREASE IN
SALES OF 13,5% TO R691,8 MILLION. OPERATING PROFIT IMPROVED FROM R97,7 MILLION
LAST YEAR TO R123,2 MILLION THIS YEAR, REPRESENTING A 26,1% INCREASE AND
HEADLINE EARNINGS INCREASED BY 16,1% TO R73,7 MILLION. ALL CORE AREAS OF THE
BUSINESS CONTINUED TO INCREASE MARKET SHARE.
THE DEBTORS BOOK INCREASED BY 12,8% WITH DELINQUENCY LEVELS FULLY PROVIDED FOR.
- TRUWORTHS FRANCHISE
TRUWORTHS CONTINUED TO SUCCESSFULLY EXPAND ITS FRANCHISE BUSINESS WITH ONE
ADDITIONAL STORE BEING OPENED IN GABERONE. TRUWORTHS NOW SUCCESSFULLY OPERATES
SEVEN FRANCHISE STORES IN SOUTHERN AFRICA AND THE MIDDLE EAST.
- SPORTSGIRL
SPORTSGIRL'S OPERATIONS ACHIEVED SALES OF AU$93,9 MILLION COMPARED TO AU$93,7
MILLION LAST YEAR AND A PROFIT OF AU$0,3 MILLION WITH COMPARABLE PROFITS OF
AU$1,0 MILLION LAST YEAR. IN A DIFFICULT TRADING CLIMATE THE PERFORMANCE OF
SPORTSGIRL REMAINS DISAPPOINTING, NEVERTHELESS SOME RECENT POSITIVE PERFORMANCE
IN KEY AREAS OF THE BUSINESS SIGNAL MORE ENCOURAGING PROSPECTS IN THE REMAINING
SIX MONTH PERIOD.
- PROSPECTS
THE SOUTH AFRICAN ECONOMY WILL PROBABLY REMAIN WEAK DURING THE REMAINING PERIOD
OF THE FINANCIAL YEAR. HOWEVER, DECLINING INTEREST RATES AND THE CONTINUING
APPLICATION OF THE HIGHLY SUCCESSFUL TRUWORTHS FORMULA ENCOURAGE A POSITIVE
OUTLOOK FOR THE BALANCE OF THE YEAR. SPORTSGIRL IS EXPECTED TO IMPROVE
PERFORMANCE OVER THE REMAINING SIX MONTHS. MANAGEMENT IS CONFIDENT THAT REAL
GROWTH IN EARNINGS AND PROFITS WILL CONTINUE TO THE END OF THE FINANCIAL YEAR.
- YEAR 2000
THE LAST ANNUAL REPORT DISCLOSES THE PROGRAMME TO ADDRESS PROBLEMS EXPECTED TO
ARISE FROM THE YEAR 2000 ISSUE. WORK HAS BEEN COMPLETED ON THE MAJORITY OF TI'S
SYSTEMS AND INFRASTRUCTURE, ALL WITHIN BUDGET, AND THE BALANCE OF THE WORK WILL
BE FINALISED BY JUNE 1999. THE FOCUS FOR THE REMAINDER OF THIS YEAR INCLUDES
THE CONTINUED MANAGEMENT OF OUR SUPPLIERS, SERVICE PROVIDERS AND OUR OWN
ENVIRONMENT. SPECIFIC CONTINUITY PLANNING IN PREPARATION FOR THE TRANSITION TO
THE YEAR 2000 HAS ALSO COMMENCED.
CAPITALISATION SHARE AWARD AND FINAL CASH DIVIDEND
THE DIRECTORS HAVE RESOLVED TO ISSUE CAPITALISATION SHARES TO ORDINARY
SHAREHOLDERS REGISTERED AS SUCH ON FRIDAY, 5 MARCH 1999 ("THE LAST DAY TO
REGISTER"), PROVIDED THAT SUCH SHAREHOLDERS MAY ELECT INSTEAD TO RECEIVE AN
INTERIM CASH DIVIDEND OF 6,0 CENTS PER SHARE, DECLARED IN RESPECT OF THE 26
WEEKS ENDED 31 DECEMBER 1998. (INTERIM ORDINARY DIVIDEND NO 2).
- TERMS OF THE AWARD
THE AWARD OF CAPITALISATION SHARES TO ORDINARY SHAREHOLDERS REGISTERED AT THE
CLOSE OF BUSINESS ON THE LAST DAY TO REGISTER WILL BE DETERMINED BY THE RATIO
THAT 6,0 CENTS MULTIPLIED BY 1,07 IS TO THE WEIGHTED AVERAGE TRADED PRICES OF
THE TI ORDINARY SHARES ON THE JOHANNESBURG STOCK EXCHANGE ("JSE") FOR THE FOUR
BUSINESS DAYS ENDING ON THE CLOSE OF BUSINESS WEDNESDAY, 31 MARCH 1999.
ACCORDINGLY, SHAREHOLDERS WHO ACCEPT THE CAPITALISATION SHARES WILL ENJOY AN
ADVANTAGE OF APPROXIMATELY 7% BASED ON THE AVERAGE PRICE, OVER THE CASH
DIVIDEND.
SHAREHOLDERS WILL BE ENTITLED TO DECLINE TO RECEIVE THE CAPITALISATION AWARD OR
ANY PART THEREOF AND ELECT INSTEAD TO RECEIVE THE INTERIM CASH DIVIDEND OF 6,0
CENTS PER SHARE.
- LISTING
SUBJECT TO THE APPROVAL OF THE JSE AND THE NAMIBIAN STOCK EXCHANGE ("THE NSX")
THE LISTING OF THE NEW ORDINARY SHARES ON THE JSE AND THE NSX WILL COMMENCE
MONDAY, 12 APRIL 1999.
- DOCUMENTATION
THIS ANNOUNCEMENT, A CIRCULAR CONTAINING FULL DETAILS OF THE CAPITALISATION
AWARD AND AN ELECTION FORM WILL BE MAILED TO SHAREHOLDERS ON FRIDAY, 12 MARCH
1999.
SHAREHOLDERS WISHING TO ELECT TO RECEIVE THE INTERIM CASH DIVIDEND WILL BE
REQUIRED TO RETURN THE ELECTION FORMS TO TI'S TRANSFER SECRETARIES TO REACH
THEM NO LATER THAN 12:00 ON THURSDAY, 1 APRIL 1999. FORMS OF ELECTION SENT BY
POST WILL BE ACCEPTED UNTIL WEDNESDAY, 7 APRIL 1999, PROVIDED THAT THE
ENVELOPES ARE POSTMARKED NO LATER THAN THURSDAY, 1 APRIL 1999.
SHARE CERTIFICATES IN RESPECT OF THE NEW ORDINARY SHARES ALLOTTED AND THE
CHEQUES IN RESPECT OF THE CASH DIVIDEND AND/OR PAYMENTS IN LIEU OF THE
FRACTIONAL ENTITLEMENTS WILL BE POSTED TO THE RESPECTIVE SHAREHOLDERS ON
MONDAY, 12 APRIL 1999.
BY ORDER OF THE BOARD
AMB FREER
CAPE TOWN
GROUP SECRETARY
16 FEBRUARY 1999
TRUWORTHS INTERNATIONAL LIMITED
(REGISTRATION NUMBER 05/17491/06)
SRG HOUSE, 1 MOSTERT STREET, CAPE TOWN 8001.
PO BOX 600, CAPE TOWN 8000
AUDITORS:
ERNST & YOUNG
DIRECTORS:
AE PARFETT* (CHAIRMAN), MS MARK (CHIEF EXECUTIVE), RG DOW*, CA HALL*, BD
LAPIN*, LA TAGER*
* NON-EXECUTIVE
TRANSFER SECRETARIES:
MERCANTILE REGISTRARS LIMITED.
PO BOX 7184, JOHANNESBURG 2000.
10TH FLOOR, 11 DIAGONAL STREET, JOHANNESBURG 2001 (SOUTH AFRICA)
TRANSFER SECRETARIES (PTY) LIMITED.
PO BOX 2401, WINDHOEK 9000.
SHOP 12, KAISERKRONE CENTRE, POST STREET MALL, WINDHOEK 9000 (NAMIBIA)