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RTO/RTN/RTOP - Rex Trueform Clothing Company Limited - Unaudited Interim Group Results for the half-year ended 31 December 2011 Rex Trueform Clothing Company Limited (Incorporated in the Republic of South Africa Reg No. 1937/009839/06) Share codes: RTO - RTN - RTOP ISIN: ZAE000006144 - ZAE000009700 - ZAE000006151 Unaudited Interim Group Results for the half-year ended 31 December 2011 REVENUE UP 4.9% OPERATING PROFIT DOWN 16.0% HEADLINE EARNINGS PER SHARE DOWN 24.6% Commentary Group results The withdrawal of Duty Credit Certificate benefits which were utilised by the group in the previous period had a materially negative impact on profit during the half-year under review. Furthermore the percentage increase in operating costs exceeded the 4.9% increase in turnover. The above factors have had a negative effect on net margin. The operating profit from continuing operations accordingly reduced by 16% on the comparative period. Headline earnings for the half-year amounted to 80.5 cents per share from continuing operations (97.7 cents in 2010). Retail The Queenspark retail segment grew sales by 4.9% during a period in which trading was disrupted by the refurbishment of a number of stores and also building alterations in some major shopping malls. In addition trading conditions remained challenging. Retail sales were further impacted by the closure of three non-performing stores during the past 12 months. Property segment The strategy of the group is to redevelop certain of the group`s properties where viable. Prospects We anticipate that there will be further deterioration in margins and profitability in the second half of the financial year due to escalating expenses and difficult trading conditions. Any reference to future financial performance included in this statement has not been reviewed and reported on by the company`s external auditors and does not constitute an earnings forecast. Signed on behalf of the board ML Krawitz (Chairman) CEA Radowsky (Chief Executive Officer) Cape Town 9 March 2012 STATEMENT OF CHANGES IN EQUITY Consolidated (R`000)
As at As at 31 December 30 June 2011 2010 2011 (Unaudited) (Unaudited) (Audited)
Share capital 1 777 1 777 1 777 Share premium Opening balance 25 836 25 847 25 847 Shares repurchased - (11) (11) Closing balance 25 836 25 836 25 836 Treasury shares Opening balance (1 762) (2 216) (2 216) Proceeds from delivery of employee share options - 371 454 Closing balance (1 762) (1 845) (1 762) Other reserves Opening balance 968 900 900 Share-based payment expense - 29 68 Closing balance 968 929 968 Retained earnings Opening balance 241 294 209 558 209 558 Profit for the period 16 564 21 749 39 930 Preference dividends paid (8) (8) (17) Ordinary dividends paid (10 643) (8 178) (8 177) Closing balance 247 207 223 121 241 294 Total capital and reserves 274 026 249 818 268 113 ABRIDGED STATEMENT OF CASH FLOWS Consolidated (R`000) Six months ended Year ended
31 December 30 June 2011 2010 2011 (Unaudited) (Unaudited) (Audited) Operating profit before working capital changes 26 844 36 701 66 317 Working capital changes (6 195) (2 249) (11 509) Interest received 3 957 4 450 8 798 Interest paid (126) (122) (302) Dividends paid (10 651) (8 186) (8 194) Dividends received 13 12 12 Normal tax paid (3 107) (7 836) (17 002) Secondary tax on companies paid (1 073) (826) (826) Net cash inflows from operations 9 662 21 944 37 294 Additions to property, plant and equipment (14 958) (14 726) (31 191) Proceeds from disposal of property, plant and equipment 119 198 672 Proceeds on disposal of discontinued operations 5 412 - - Net cash outflows from investing activities (9 427) (14 528) (30 519) Proceeds from delivery of shares by share trust - 371 454 Repurchase of own shares - (11) (11) Net cash inflows from financing activities - 360 443 Net increase in cash and cash equivalents 235 7 776 7 218 Cash and cash equivalents at the beginning of the period 148 849 141 631 141 631 Cash and cash equivalents at the end of the period 149 084 149 407 148 849 OTHER INFORMATION Capital commitments (Authorised - not contracted for) 34 075 6 011 53 436 Gross profit margin from continuing operations 54.5% 54.4% 56.3% Operating profit margin from continuing operations 7.4% 9.3% 8.7% Retail segment operating profit margin from continuing operations 7.9% 10.0% 9.2% STATEMENT OF COMPREHENSIVE INCOME Consolidated (R`000) Six months ended Year ended
31 December 30 June % 2011 2010 2011 change (Unaudited) (Unaudited) (Audited) Continuing operations Revenue 4.9% 286 439 273 050 518 796 Turnover 4.9% 280 940 267 697 508 078 Cost of sales (127 770) (122 039) (221 987) Gross profit 5.2% 153 170 145 658 286 091 Employment costs (49 193) (45 775) (91 672) Occupancy costs (37 090) (34 209) (70 729) Depreciation and amortisation (9 568) (7 437) (15 595) Other operating costs (38 016) (34 341) (65 600) Rental income 733 249 605 Royalties 602 503 1 009 Management fee income 194 139 294 Operating profit (16.0%) 20 832 24 787 44 403 Dividends received 13 12 12 Interest received 3 957 4 450 8 798 Interest paid (126) (122) (302) Profit before tax (15.3%) 24 676 29 127 52 911 Income tax expense (8 112) (9 208) (16 116) Profit for the period from continuing operations (16.8%) 16 564 19 919 36 795 Profit from discontinued operations (net of income tax) - 1 830 3 135 Profit for the period (23.8%) 16 564 21 749 39 930 Other comprehensive income Total comprehensive income for the period 16 564 21 749 39 930 Profit attributable to: Ordinary and `N` ordinary shareholders 16 556 21 741 39 913 Preference shareholders 8 8 17 Profit for the period 16 564 21 749 39 930 Total comprehensive income attributable to: Ordinary and `N` ordinary shareholders 16 556 21 741 39 913 Preference shareholders 8 8 17 Total comprehensive income for the period 16 564 21 749 39 930 Reconciliation of headline earnings Profit attributable to equity holders 16 556 21 741 39 913 Continuing operations 16 556 19 911 36 778 Discontinued operations - 1 830 3 135 Adjusted for: (Profit)/loss on disposal of property, plant and equipment (80) (4) 673 Profit on sale of discontinued operations - - (122) Headline earnings 16 476 21 737 40 464 Continuing operations 16 476 19 907 37 451 Discontinued operations - 1 830 3 013 Basic earnings per ordinary share (cents) (24.2%) 80.9 106.7 195.6 Continuing operations 80.9 97.7 180.2 Discontinued operations - 9.0 15.4 Headline earnings per ordinary share (cents) (24.6%) 80.5 106.7 198.3 Continuing operations 80.5 97.7 183.5 Discontinued operations - 9.0 14.8 Diluted basic earnings per ordinary share (cents) (24.3%) 80.5 106.3 194.8 Continuing operations 80.5 97.3 179.5 Discontinued operations - 9.0 15.3 Diluted headline earnings per ordinary share (cents)(24.7%) 80.1 106.3 197.5 Continuing operations 80.1 97.3 182.8 Discontinued operations - 9.0 14.7 Weighted average number of equity shares on which earnings per share is based (000) 20 466 20 371 20 410 Weighted average number of equity shares on which diluted earnings per share is based (000) 20 575 20 449 20 487 STATEMENT OF FINANCIAL POSITION Consolidated (R`000) As at As at
31 December 30 June 2011 2010 2011 (Unaudited) (Unaudited) (Audited) Assets Non-current assets 86 243 75 471 83 855 Property, plant and equipment 75 161 65 157 69 328 Investment property 5 718 3 511 5 776 Intangible assets 1 061 1 317 1 455 Other investments 576 576 576 Deferred taxation 3 727 4 910 6 720 Current assets 237 266 226 001 243 827 Inventories 75 590 62 349 71 099 Amounts receivable from holding company 36 661 282 Trade and other receivables 11 642 13 584 21 562 Forward exchange contracts 910 - - Income tax receivable 4 - 2 035 Cash and cash equivalents 149 084 149 407 148 849 Total assets 323 509 301 472 327 682 Equity and liabilities Capital and reserves 274 026 249 818 268 113 Share capital 1 777 1 777 1 777 Share premium 25 836 25 836 25 836 Treasury shares (1 762) (1 845) (1 762) Other reserves 968 929 968 Retained earnings 247 207 223 121 241 294 Non-current liabilities 11 530 12 041 16 099 Post-retirement liability 3 197 3 292 3 251 Accrued operating lease liability 7 143 8 749 9 577 Deferred taxation 1 190 - 3 271 Current liabilities 37 953 39 613 43 470 Provisions 420 514 467 Trade and other payables 36 426 35 625 42 283 Forward exchange contracts - 2 180 602 Income tax payable 1 107 1 294 118 Total equity and liabilities 323 509 301 472 327 682 SEGMENTAL REPORTING Consolidated (R`000) Six months ended Year ended 31 December 30 June 2011 2010 2011
(Unaudited) (Unaudited) (Audited) Revenue Total external retail revenue 281 736 268 339 509 381 Retail segment revenue 282 727 269 435 511 601 Intersegment revenue earned from continuing operations (991) (605) (1 548) Intersegment revenue earned from discontinued operations - (491) (672) Total external property revenue 733 249 605 Property segment revenue 2 695 2 318 4 758 Intersegment revenue earned from continuing operations (1 962) (1 810) (3 635) Intersegment revenue earned from discontinued operations - (259) (518) Dividends received 13 12 12 Interest received 3 957 4 450 8 798 Segment revenue from continuing operations 286 439 273 050 518 796 Total external manufacturing revenue - 17 214 34 990 Manufacturing segment revenue - 17 291 35 067 Less: intersegment revenue - (77) (77) Segment revenue from discontinued operations - 17 214 34 990 Total group revenue 286 439 290 264 553 786 Segment operating profit/(loss) Retail segment profit - continuing operations 22 069 26 749 46 906 Property segment profit - continuing operations 869 192 1 331 Group Services operating loss - continuing operations* (2 106) (2 154) (3 834) Group profit from continuing operations 20 832 24 787 44 403 Manufacturing operating profit - discontinued operations - 2 541 4 354 Total group operating profit 20 832 27 328 48 757 Depreciation and amortisation Retail 9 469 7 359 15 416 Property 99 65 179 Segment depreciation and amortisation from continuing operations 9 568 7 424 15 595 Manufacturing - discontinued operation - 138 259 Total depreciation and amortisation 9 568 7 562 15 854 Segment assets Retail 217 312 178 051 202 446 Property 13 156 10 412 11 751 Group Services* 93 041 99 892 102 113 Segment assets from continuing operations 323 509 288 355 316 310 Manufacturing - discontinued operation - 13 117 11 372 Total segment assets 323 509 301 472 327 682 Segment liabilities Retail 44 956 41 691 50 330 Property 2 184 30 1 931 Group Services* 2 343 4 903 4 196 Segment liabilities from continuing operations 49 483 46 624 56 457 Manufacturing - discontinued operation - 5 030 3 112 Total segment liabilities 49 483 51 654 59 569 Capital expenditure Retail 13 867 14 396 30 559 Property 1 091 330 602 Capital expenditure from continuing operations 14 958 14 726 31 161 Manufacturing - discontinued operation - - 30 Total capital expenditure 14 958 14 726 31 191 * Group Services include corporate costs. NOTES 1 Basis of preparation These interim financial statements have been prepared in terms of the South African Companies Act (71 of 2008 as amended), IFRS, IAS 34: Interim Financial Reporting, the JSE Listings Requirements and the AC 500 Standards as issued by the Accounting Practices Board or its successor. These interim financial statements have been prepared under the supervision of the group financial director, Damian Johnson CA(SA). These results have not been reviewed or reported on by the company`s auditors, KPMG Inc. 2 Accounting policies The accounting policies applied are consistent with those applied in the preparation of the group`s annual financial statements for the year ended 30 June 2011. 3 Reclassification The group presented the sale of its manufacturing division as a discontinued operation in the previous year, and where applicable, certain comparative information has been reclassified. 4 Preference dividend A dividend on the 6% cumulative preference shares for the six months ended 31 December 2011 in the amount of R8 400 was declared on 10 December 2011 and paid on 23 December 2011. Directors: ML Krawitz+ (Chairman), CEA Radowsky (Chief Executive Officer), DS Johnson, JC O`Brien, PM Naylor*, RV Orlin*, RW Rees (UK)* +Non-executive *Independent non-executive Registered office Rex Buildings, 263 Victoria Road, Salt River, Cape Town, 7925 Secretary A A Hodgkinson Transfer secretaries Computershare Investor Services (Pty) Limited, 70 Marshall Street, Johannesburg, 2001 Sponsor Java Capital Websites www.queenspark.com www.rextrueform.com Date: 08/03/2012 15:19:01 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.
