Wrap Text
February 21, 2002
Truworths International Limited lifted headline earnings per share by 27,4%
to 28,8 cents from 22,6 cents in the 26 weeks to December 31, 2001.
Sales increased to R967,9 million from R823,3 million - a 17,6 %
improvement.
Executive chairman Michael Mark said higher retail activity, further gains
in market share, improved productivity in terms of sales per square metre
and per full time employee, and a continued focus on costs impacted
favourably on operating margins.
"These resulted in a margin improvement to 20,4 % compared to 18,2 % in the
previous year," he said.
Operating profits before finance costs, taxation and exceptional items
reflected a 31,7 % increase to R197,3 million (R149,8 million).
There was a 20,4 % increase in net profit attributable to shareholders from
R110,7 million to R133,2 million. Headline earnings improved by 28,4 % to R
132,8 million from R103,4 million.
An interim dividend of 9 cents per share has been declared. This is 28,6%
more than the last interim dividend of 7c per share.
Mark said the positive trend in sales, noted when Truworths announced its
year-end results in August, continued through the period and trading was
ahead of plan. The increase in sales of 17,6 % included like-for-like sales
growth of 10,6 %.
He said credit sales as a percentage of total sales decreased from 75% at
June 2001 to 73%, reflecting the impact of the group's conservative credit
granting policies. The continuous improvement in the book was reflected in a
lower percentage of arrear accounts compared to June 2001 and a further
reduction in net bad debt, as a percentage of credit sales.
Mark said the ability to generate healthy cash flows from operations
remained a significant strength. Development of a clear strategy to deal
with the group's positive cash flow would continue over the months ahead.
Cash balances on December 31 totalled R206 million, a decrease of R101,6
million relative to June 2001. Cash outflows totalling R190,8 million arose
from the termination of the head office lease, an increased investment in
this building, the payment of transfer pricing taxation and a repurchase of
5,9 million Truworths shares.
The transfer pricing taxation payment of R18,6 million, including interest
and STC, had been recorded as a prepayment. No reply had yet been received
to the formal objections to the revised assessments issued by the South
African Revenue Service (SARS).
During the interim period, group subsidiaries received R300 000 in
distributions made to creditors of the former Australian subsidiary,
Sportsgirl. A further distribution of R 4,2 million was received in
February, with a final distribution expected late in the calendar year.
Mark said the outlook of Truworths' management for the rest of the financial
year was cautious given the current economic environment.
"Despite challenging market conditions, the positive trend in sales has
continued in both January and February with sales growth being ahead of
plan. In the coming months management's strategy will be to continue to
read the fashion market accurately, grow market share and contain costs."
He said plans to expand the Identity cash chain, a promising performer, from
25 to 30 stores by the end of the financial year were on schedule.
ends
ISSUED FOR Truworths International Ltd
BY De Kock & Kerkhoff Communication Consultants
INQUIRIES Michael Mark 021-460-7910
Wayne van der Merwe 021-460-7956
Mike Kerkhoff 021-424-5280
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