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Reviewed Condensed Consolidated Financial Statements Results For The Year Ended 30 June 2012
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.
REVIEWED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS RESULTS FOR THE YEAR ENDED 30 JUNE 2012
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Consolidated (R'000)
% 2012 2011
change (Reviewed) (Audited)
Continuing operations
Revenue 4.4% 541 676 518 796
Turnover 4.4% 530 593 508 078
Cost of sales (246 182) (221 987)
Gross profit (0.6%) 284 411 286 091
Employment costs (97 515) (91 672)
Occupancy costs (76 447) (70 729)
Depreciation and amortisation (21 338) (15 595)
Other operating costs (65 431) (65 600)
Rental income 1 526 605
Royalties 1 038 1 009
Management fee income 373 294
Operating profit (40.1%) 26 617 44 403
Dividends received 13 12
Interest income 8 133 8 798
Interest expense (272) (302)
Profit before tax (34.8%) 34 491 52 911
Income tax expense (10 711) (16 116)
Profit for the year from continuing operations (35.4%) 23 780 36 795
Profit from discontinued operation (net of income tax) - 3 135
Profit for the year (40.4%) 23 780 39 930
Other comprehensive income
Net change in fair value of available-for-sale financial
assets (52) -
Total comprehensive income for the year 23 728 39 930
Profit attributable to:
Ordinary and 'N' ordinary shareholders 23 763 39 913
Preference shareholders 17 17
Profit for the year 23 780 39 930
Total comprehensive income attributable to:
Ordinary and 'N' ordinary shareholders 23 711 39 913
Preference shareholders 17 17
Total comprehensive income for the year 23 728 39 930
Reconciliation of headline earnings
Profit attributable to equity holders 23 763 39 913
Continuing operations 23 763 36 778
Discontinued operation - 3 135
Adjusted for:
Loss on disposal of property, plant and equipment 18 673
Impairment loss 1 538 -
Profit from sale of discontinued operation - (122)
Headline earnings 25 319 40 464
Continuing operations 25 319 37 451
Discontinued operation - 3 013
Basic earnings per ordinary share (cents) (40.6%) 116.1 195.6
Continuing operations 116.1 180.2
Discontinued operation - 15.4
Headline earnings per ordinary share (cents) (37.6%) 123.7 198.3
Continuing operations 123.7 183.5
Discontinued operation - 14.8
Diluted basic earnings per ordinary share (cents) (40.6%) 115.7 194.8
Continuing operations 115.7 179.5
Discontinued operation - 15.3
Diluted headline earnings per ordinary share (cents) (37.6%) 123.3 197.5
Continuing operations 123.3 182.8
Discontinued operation - 14.7
Dividend cover (based on headline earnings) 2.0 3.8
Weighted average number of equity shares on which
earnings per share is based (000's) 20 469 20 410
Weighted average number of equity shares on which
diluted earnings per share is based (000's) 20 538 20 487
CONSOLIDATED STATEMENT OF FINANCIAL POSITION Consolidated (R'000)
2012 2011
(Reviewed) (Audited)
ASSETS
Non-current assets 90 263 81 331
Property, plant and equipment 74 910 69 328
Investment property 5 662 5 776
Intangible assets 4 510 1 455
Other investments 524 576
Deferred taxation 4 657 4 196
Current assets 238 617 243 827
Inventories 61 881 71 099
Amounts receivable from holding company - 282
Trade and other receivables 11 700 21 562
Forward exchange contracts 1 072 -
Income tax receivable 2 780 2 035
Cash and cash equivalents 161 184 148 849
Total assets 328 880 325 158
Equity and liabilities
Capital and reserves 281 538 268 113
Share capital 1 777 1 777
Share premium 25 836 25 836
Treasury shares (1 453) (1 762)
Other reserves 963 968
Retained earnings 254 415 241 294
Non-current liabilities 14 961 13 575
Post-retirement liability 2 381 3 251
Accrued operating lease liability 11 150 9 577
Deferred taxation 1 430 747
Current liabilities 32 381 43 470
Provisions - 467
Trade and other payables 32 357 42 283
Forward exchange contracts - 602
Income tax payable 24 118
Total equity and liabilities 328 880 325 158
ABRIDGED CONSOLIDATED STATEMENT OF CASH FLOWS Consolidated (R'000)
2012 2011
(Reviewed) (Audited)
Operating profit before working capital changes 45 456 66 627
Working capital changes 5 158 (11 819)
Interest income 8 133 8 798
Interest expense (272) (302)
Dividends paid (10 659) (8 194)
Dividends received 13 12
Normal tax paid (10 255) (17 002)
Secondary tax on companies paid (1 073) (826)
Net cash inflows from operating activities 36 501 37 294
Additions to property, plant and equipment (30 115) (31 191)
Proceeds from disposal of property, plant and equipment 228 672
Proceeds from disposal of discontinued operations 5 412 -
Net cash outflows from investing activities (24 475) (30 519)
Proceeds from delivery of shares by share trust 309 454
Repurchase of own shares - (11)
Net cash inflows from financing activities 309 443
Net increase in cash and cash equivalents 12 335 7 218
Cash and cash equivalents at the beginning of the year 148 849 141 631
Cash and cash equivalents at the end of the year 161 184 148 849
OTHER INFORMATION
Capital commitments
Authorised - not contracted for 56 685 53 436
Authorised - contracted for 7 955 -
Gross profit margin from continuing operations 53.6% 56.3%
Operating profit margin from continuing operations 5.0% 8.7%
Retail segment operating profit margin from continuing operations 5.4% 9.2%
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Consolidated (R'000)
2012 2011
(Reviewed) (Audited)
Share capital 1 777 1 777
Share premium
Opening balance 25 836 25 847
Shares repurchased - (11)
Closing balance 25 836 25 836
Treasury shares
Opening balance (1 762) (2 216)
Proceeds from delivery of employee share options 309 454
Closing balance (1 453) (1 762)
Other reserves
Opening balance 968 900
Share-based payment expense 47 68
Fair value adjustment of available-for-sale financial assets (52) -
Closing balance 963 968
Retained earnings
Opening balance 241 294 209 558
Profit for the year 23 780 39 930
Preference dividends paid (17) (17)
Ordinary dividends paid (10 642) (8 177)
Closing balance 254 415 241 294
Total capital and reserves 281 538 268 113
SEGMENTAL REPORTING Consolidated (R'000)
2012 2011
(Reviewed) (Audited)
Revenue
Total external retail revenue 532 004 509 381
Retail segment revenue 534 188 511 601
Intersegment revenue earned from continuing operations (2 184) (1 548)
Intersegment revenue earned from discontinued operation - (672)
Total external property revenue 1 526 605
Property segment revenue 5 388 4 758
Intersegment revenue earned from continuing operations (3 862) (3 635)
Intersegment revenue earned from discontinued operation - (518)
Dividends received 13 12
Interest income 8 133 8 798
Segment revenue from continuing operations 541 676 518 796
Total external manufacturing revenue - 34 990
Manufacturing segment revenue - 35 067
Less: intersegment revenue - (77)
Segment revenue from discontinued operation - 34 990
Total group revenue 541 676 553 786
Segment operating profit/(loss)
Retail segment profit - continuing operations 28 681 46 906
Property segment profit - continuing operations 1 287 1 331
Group services operating loss - continuing operations* (3 351) (3 834)
Group profit from continuing operations 26 617 44 403
Manufacturing operating profit - discontinued operation - 4 354
Total group operating profit 26 617 48 757
Depreciation and amortisation
Retail 21 113 15 416
Property 225 179
Segment depreciation and ammortisation from continuing operations 21 338 15 595
Manufacturing - discontinued operation - 259
Total depreciation and amortisation 21 338 15 854
Segment assets
Retail 214 762 201 102
Property 15 286 11 751
Group services* 98 832 100 933
Segment assets from continuing operations 328 880 313 786
Manufacturing - discontinued operation - 11 372
Total segment assets 328 880 325 158
Segment liabilities
Retail 42 389 48 986
Property 2 099 1 931
Group services* 2 854 3 016
Segment liabilties from continuing operations 47 342 53 933
Manufacturing - discontinued operation - 3 112
Total segment liabilities 47 342 57 045
Capital expenditure
Retail 26 991 30 559
Property 3 124 602
Capital expenditure from continuing operations 30 115 31 161
Manufacturing - discontinued operation - 30
Total capital expenditure 30 115 31 191
* Group services include corporate costs.
NOTES
1 Review by auditors
The condensed group financial statements of Rex Trueform Clothing Company Limited for the year ended
30 June 2012 have been reviewed by the companys auditor, KPMG Inc. In their review report dated 06 September 2012,
which is available for inspection at the Companys Registered Office, KPMG Inc state that their review was
conducted in accordance with the International Standard on Review Engagements 2410, Review of Interim
Information Performed by the Independent Auditor of the Entity, which applies to a review of group preliminary
financial information, and have expressed an unmodified conclusion on the condensed group preliminary
financial statements.
2 Basis of preparation
The condensed group preliminary financial statements are prepared in accordance with the recognition and
measurement principles of International Financial Reporting Standards and presented in accordance with the minimum
content, including disclosures, prescribed by IAS 34-Interim Financial Reporting applied to year-end reporting,
the Companies Act, JSE Listings Requirements and South African Statements and Interpretations of
Statements of Generally Accepted Accounting Practice (AC 500 Series).
These reviewed results have been prepared under the supervision of the group financial director, Damian Johnson CA(SA).
3 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.
The integrated annual report containing a detailed review of the operations of the company together
with the audited financial statements will be posted to shareholders towards the end of
September 2012.
COMMENTARY
As anticipated in the interim report, the group continued to find trading conditions difficult in the second six months. This resulted in
slower turnover growth for the second half as compared with the performance during the first half of the financial year. Accordingly,
and in line with expectations, group revenue from continuing operations for the year was restricted to an increase of 4.4% over the
previous year.
The withdrawal of the Duty Credit Certificate Scheme benefits, which were utilised by the group in the previous financial year, had a
materially negative impact on gross profit during the financial year under review. This impact contributed to the gross profit for the
period being down on last year. Operating costs increased by 7%, and include a R2.1 million impairment of assets recognised in
the second six months.
The factors above resulted in a decrease in operating profit from continuing operations of 40.1%. Group profit after tax amounted to
R23.8 million compared to R39.9 million last year, a decrease of 40.4%. In line with performance, headline earnings per share
decreased by 37.6% to 123.7 cents, and earnings per share decreased by 40.6% to 116.1 cents.
Retail
The Queenspark retail segment achieved R530.6 million in turnover, an improvement of 4.4% on last year. Retail segment
operating profit decreased by 38.9% over the comparative period, as a consequence of the low turnover growth, the withdrawal of
the Duty Credit Certificate Scheme benefits and an impairment loss of R2.1 million. Excluding the Duty Credit Certificate Scheme
benefits and the impairment loss, the decrease in operating profit would have been restricted to 5.5%.
Property
The property segment will continue to implement its property development strategy. In line with this strategy, the development of
the Rex Trueform Office Park in Cape Town has begun. The development costs are being financed through the utilisation of the
Group's cash reserves.
Prospects
In spite of the recent interest rate cuts, the outlook for retail sales is weighed down by high consumer debts levels, tight lending
standards and rising living costs such as municipal rates and electricity. International brands continue to enter the local clothing
retail market, intensifying industry competition. Against this back-drop, the companys retail segment will remain under pressure in
the 2013 financial year. Certain strategic initiatives are being undertaken, however, which should have a positive impact in the
medium term.
Dividend
The board is recommending to shareholders that the dividend on the ordinary and N ordinary shares be increased to 61 cents per
share, which will result in a dividend cover of 2 times. Shareholders will be asked to consider and approve the directors dividend
recommendation at the annual general meeting of the company to be held on 14 November 2012.
An announcement detailing the terms of the dividend declaration will be made immediately following the annual general meeting.
Any reference to future financial performance included in this statement has not been reviewed and reported on by the companys
external auditors and does not constitute an earnings forecast.
Signed on behalf of the board
M.L. Krawitz C.E.A. Radowsky
(Chairman) (Chief Executive Officer)
Cape Town
7 September 2012
Directors: ML Krawitz+ (Chairman), CEA Radowsky (Chief Executive Officer), DS Johnson, JC O'Brien, PM Naylor*, RV Orlin* and RW Rees(UK)*
+ Non-executive *Independent Non-executive
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.
Registered office: Rex Buildings, 263 Victoria Road, Salt River, Cape Town, 7925
Secretary: SM Lawrence
Transfer secretaries: Computershare Investor Services (Pty) Ltd, 70 Marshall Street, Johannesburg, 2001
Sponsor: Java Capital
Websites: www.queenspark.com - www.rextrueform.com
Date: 07/09/2012 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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