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TRUWORTHS RE-ASSESSING AUSTRALIAN INVESTMENT

Release Date: 10/11/1999 13:17
Code(s): TRU
Wrap Text
10 NOVEMBER 1999

TRUWORTHS INTERNATIONAL LIMITED WAS RE-ASSESSING ITS INVESTMENT IN ITS AUSTRALIAN SUBSIDIARY, SPORTSGIRL, WITH THE ASSISTANCE OF CORPORATE ADVISORS IN AUSTRALIA, THE GROUP CEO, MICHAEL MARK, SAID AFTER THE ANNUAL MEETING IN CAPE TOWN TODAY.
HE SAID THAT TI'S ANNUAL REPORT HAD NOTED THAT WHILE ACTION PLANS WITHIN SPORTSGIRL WERE URGENTLY BEING IMPLEMENTED, THE GROUP NEVERTHELESS EXPECTED A LOSS AT SPORTSGIRL FOR THE YEAR MAINLY AS A RESULT OF ITS EXPECTATIONS OF A POOR FIRST HALF-YEAR.
"THE ONGOING LOSSES ARE MORE SERIOUS THAN EXPECTED. THIS FACT, TOGETHER WITH THE ONGOING EFFORT REQUIRED BY TRUWORTHS TO SUPPORT SPORTSGIRL, HAS LED US TO RE-ASSESS THE INVESTMENT."
MR MARK SAID THAT TRUWORTHS HAD NOT YET FELT THE EXPECTED STRONG UPTURN IN THE RETAIL SECTOR IN SOUTH AFRICA. THERE HAD BEEN REASONABLE GROWTH FOR THE FIRST 19 WEEKS OF THE CURRENT YEAR WITHIN TRUWORTHS, BUT NOT YET THE SIGNIFICANT GROWTH EXPECTED AMONGST MANY OBSERVERS OF THE RETAIL SECTOR.
"ANALYSTS' FORECASTS OF HEADLINE EARNINGS PER SHARE OF BETWEEN 37C AND 40C FOR THIS FINANCIAL YEAR, A SIGNIFICANT GROWTH ON PROFITS LAST YEAR OF 28.2C PER SHARE, NEED TO BE TEMPERED DUE TO THE LOSSES BEING EXPERIENCED WITHIN SPORTSGIRL.
"REGARDING THE HALF-YEAR ENDING DECEMBER 1999, SHAREHOLDERS SHOULD BEAR IN MIND THAT THE LOSS OF THE PREVIOUS YEAR OF AU$12.9M INCURRED IN THE YEAR ENDED JUNE 1999 WITHIN SPORTSGIRL WAS ACCOUNTED FOR AS IF IT HAD BEEN INCURRED IN THE SECOND SIX MONTHS OF THE FINANCIAL YEAR.
"THIS RESULTED IN AN ARTIFICIALLY HIGH HALF-YEAR RESULT FOR THE FIRST HALF - PERIOD ENDED DECEMBER 1998 WHERE MODEST PROFITS WERE SHOWN. AS THE HISTORICAL RESULTS WILL NOT BE RESTATED (WHICH INCLUDES THE LOSSES OF SPORTSGIRL), SPORTSGIRL WILL SHOW A MATERIAL DECLINE IN ITS PERFORMANCE, THUS AFFECTING TI MATERIALLY FOR THE HALF-YEAR TO DECEMBER 1999."
MR MARK SAID TI WOULD COMPLETE ITS RE-ASSESSMENT OF ITS INVESTMENT IN
SPORTSGIRL SHORTLY, AND A FURTHER ANNOUNCEMENT IN THIS REGARD COULD BE EXPECTED THEREAFTER. - ENDS - ISSUED FOR : TRUWORTHS INTERNATIONAL LTD
BY : DE KOCK & KERKHOFF COMMUNICATIONS CONSULTANTS INQUIRIES : MICHAEL MARK 021-460-7910 MIKE KERKHOFF 021-424-5280

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