Unaudited Interim Group Results for the six months ended 31 December 2012 Rex Trueform Clothing Company Limited Registration number: 1937/009839/06 Share codes: RTO - RTN - RTOP ISIN: ZAE000006144 - ZAE000009700 - ZAE000006151 UNAUDITED INTERIM GROUP RESULTS for the six months ended 31 December 2012 CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Six months Six months Year ended ended ended 31 December 31 December 30 June 2012 2011 2012 % Unaudited Unaudited Audited change R'000 R'000 R'000 Revenue (10.3) 256 922 286 439 541 676 Turnover (10.3) 251 973 280 940 530 593 Cost of sales (130 774) (127 770) (246 182) Gross profit (20.9) 121 199 153 170 284 411 Employment costs 5.3 (51 777) (49 193) (97 515) Occupancy costs 13.7 (42 154) (37 090) (76 447) Depreciation and amortisation (8.5) (8 757) (9 568) (21 338) Other operating costs (14.9) (32 351) (38 016) (65 431) Rental income (8.7) 669 733 1 526 Royalties (7.6) 556 602 1 038 Management fee income (7.7) 179 194 373 Operating (loss)/profit (159.7) (12 436) 20 832 26 617 Dividends received 12 13 13 Interest income 3 533 3 957 8 133 Interest expense (135) (126) (272) (Loss)/profit before tax (136.6) (9 026) 24 676 34 491 Income tax expense 2 238 (8 112) (10 711) (Loss)/profit for the period (141.0) (6 788) 16 564 23 780 Other comprehensive (loss)/income Net change in fair value of available-for-sale financial assets - - (52) Total comprehensive (loss)/income for the period (6 788) 16 564 23 728 (Loss)/profit attributable to: Ordinary and 'N' ordinary shareholders (6 796) 16 556 23 763 Preference shareholders 8 8 17 (Loss)/profit for the period (6 788) 16 564 23 780 Total comprehensive (loss)/income attributable to: Ordinary and 'N' ordinary shareholders (6 796) 16 556 23 711 Preference shareholders 8 8 17 Total comprehensive (loss)/income for the period (6 788) 16 564 23 728 Reconciliation of headline (loss)/earnings (Loss)/profit attributable to equity holders (6 796) 16 556 23 763 Adjusted for: (Profit)/loss from disposal of property, plant and equipment (38) (80) 18 Impairment loss (reversed)/recognised on equipment and shopfitting (102) - 1 538 Headline (loss)/earnings (6 936) 16 476 25 319 Basic (loss)/earnings per ordinary share (cents) (140.9) (33.1) 80.9 116.1 Headline (loss)/earnings per ordinary share (cents) (142.0) (33.8) 80.5 123.7 Diluted basic (loss)/earnings per ordinary share (cents) (141.0) (33.0) 80.5 115.7 Diluted headlines (loss)/earnings per ordinary share (cents) (142.1) (33.7) 80.1 123.3 Weighted average number of equity shares used in: - (loss)/earnings per share (000's) 20 536 20 466 20 469 - diluted earnings per share (000's) 20 578 20 575 20 538 CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at As at As at 31 December 31 December 30 June 2012 2011 2012 Unaudited Unaudited Audited R'000 R'000 R'000 ASSETS Non-current assets 99 591 86 243 90 263 Property, plant and equipment 80 516 75 161 74 910 Investment property 5 607 5 718 5 662 Intangible assets 5 835 1 061 4 510 Other investments 524 576 524 Deferred taxation 7 109 3 727 4 657 Current assets 213 898 237 266 238 617 Inventories 71 802 75 590 61 881 Amounts receivable from holding company 29 36 - Trade and other receivables 3 160 11 642 11 700 Forward exchange contracts - 910 1 072 Income tax receivable 1 983 4 2 780 Cash and cash equivalents 136 924 149 084 161 184 Total assets 313 489 323 509 328 880 EQUITY AND LIABILITIES Capital and reserves 262 450 274 026 281 538 Share capital 1 777 1 777 1 777 Share premium 25 836 25 836 25 836 Treasury shares (1 195) (1 762) (1 453) Other reserves 963 968 963 Retained earnings 235 069 247 207 254 415 Non-current liabilities 14 077 11 530 14 961 Post-retirement liability 2 380 3 197 2 381 Accrued operating lease liability 10 880 7 143 11 150 Deferred taxation 817 1 190 1 430 Current liabilities 36 962 37 953 32 381 Provisions - 420 - Trade and other payables 35 714 36 426 32 357 Forward exchange contracts 1 200 - - Income tax payable 48 1 107 24 Total equity and liabilities 313 489 323 509 328 880 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW Six months Six months Year ended ended ended 31 December 31 December 30 June 2012 2011 2012 Unaudited Unaudited Audited R'000 R'000 R'000 Operating (loss)/profit before working capital changes (2 802) 26 844 45 456 Working capital changes 3 010 (6 195) 5 157 Interest income 3 533 3 957 8 133 Interest expense (135) (126) (272) Dividends paid (12 550) (10 651) (10 659) Dividends received 12 13 13 Normal tax paid (6) (3 107) (10 255) Secondary tax on companies paid - (1 073) (1 073) Net cash (outflow)/inflow from operations (8 938) 9 662 36 500 Additions to property, plant and equipment (15 785) (14 958) (30 115) Proceeds from disposal of property, plant and equipment 205 119 229 Proceeds on disposal of discontinued operations - 5 412 5 412 Net cash outflow from investing activities (15 580) (9 427) (24 474) Proceeds from delivery of shares by share trust 258 - 309 Net cash inflow from financing activities 258 - 309 Net (decrease)/increase in cash and cash equivalents (24 260) 235 12 335 Cash and cash equivalents at the beginning of the period 161 184 148 849 148 849 Cash and cash equivalents at the end of the period 136 924 149 084 161 184 Net asset value per share (cents) 1 274 1 337 1 370 GROUP SEGMENTAL REPORTING Six months Six months Year ended ended ended 31 December 31 December 30 June 2012 2011 2012 Unaudited Unaudited Audited R'000 R'000 R'000 Revenue Total external retail revenue 252 708 281 736 532 004 Retail segment revenue 254 173 282 727 534 188 Intersegment revenue earned (1 465) (991) (2 184) Total external property revenue 669 733 1 526 Property segment revenue 2 608 2 695 5 388 Intersegment revenue earned (1 939) (1 962) (3 862) Dividends received 12 13 13 Interest income 3 533 3 957 8 133 Total group revenue 256 922 286 439 541 676 Segment operating (loss)/profit Retail (10 149) 22 069 28 681 Property (96) 869 1 287 Group services* (2 191) (2 106) (3 351) Total group operating profit (12 436) 20 832 26 617 Depreciation and amortisation Retail 8 647 9 469 21 113 Property 110 99 225 Total depreciation and amortisation 8 757 9 568 21 338 Segment assets Retail 215 079 217 312 214 762 Property 23 390 13 156 15 286 Group services* 75 020 93 041 98 832 Total segment assets 313 489 323 509 328 880 Segment liabilities Retail 45 656 44 956 42 389 Property 2 489 2 184 2 099 Group services* 2 894 2 343 2 854 Total segment liabilities 51 039 49 483 47 342 Capital expenditure Retail 7 347 13 867 26 991 Property 8 438 1 091 3 124 Total capital expenditure 15 785 14 958 30 115 * Group services include corporate costs. OTHER INFORMATION Six months Six months Year ended ended ended 31 December 31 December 30 June 2012 2011 2012 Unaudited Unaudited Audited Capital commitments Authorised but not yet contracted for (R'000) 29 769 34 075 56 685 Authorised and contracted for (less amounts already incurred) (R'000) 5 154 - 7 955 Gross profit margin (%) 48.1 54.5 53.6 Operating (loss)/profit margin (%) (4.9) 7.4 5.0 Retail segment operating (loss)/profit margin (%) (4.0) 7.9 5.4 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY As at As at As at 31 December 31 December 30 June 2012 2011 2012 Unaudited Unaudited Audited R'000 R'000 R'000 Share capital 1 777 1 777 1 777 Share premium 25 836 25 836 25 836 Treasury shares Opening balance (1 453) (1 762) (1 762) Proceeds from delivery of employee share options 258 - 309 Closing balance (1 195) (1 762) (1 453) Other reserves Opening balance 963 968 968 Share-based payment expense - - 47 Net change in fair value of available-for-sale financial assets - - (52) Closing balance 963 968 963 Retained earnings Opening balance 254 415 241 294 241 294 (Loss)/profit for the period (6 788) 16 564 23 780 Preference dividends paid (8) (8) (17) Ordinary dividends paid (12 550) (10 643) (10 642) Closing balance 235 069 247 207 254 415 Total capital and reserves 262 450 274 026 281 538 NOTES 1 Basis of preparation of financial statements These condensed consolidated financial statements have been prepared in accordance with the framework concepts and the measurement and recognition requirements of International Financial Reporting Standards (IFRS), the interpretations adopted by the International Accounting Standards Board, South African Institute of Chartered Accountants Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council and include disclosure as required by IAS 34: Interim Financial Reporting, the Companies Act of South Africa, 2008 and the JSE Listings Requirements. The financial statements have been prepared using accounting policies that comply with IFRS and which are consistent with those applied in the preparation of the financial statements for the year ended 30 June 2012. 2 Unaudited results These results have not been reviewed or reported on by the group's auditors. These condensed consolidated financial statements have been prepared under the supervision of Damian Johnson CA(SA) and were approved by the board of directors on 6 March 2013. 3 Preference dividend A dividend on the 6% cumulative preference shares for the six months ended 31 December 2012 in the amount of R8 400 was declared on 5 December 2012 and paid on 7 January 2013. COMMENTARY Group results In line with the trading update dated 14 November 2012 the group had a disappointing first half of the year mainly due to the poor performance of Queenspark. Revenue decreased by 10.3% largely due to the decrease in retail turnover, whereas the gross profit decreased by 20.9% during the period under review. Operating expenses were limited to a 0.9% increase. The operating financial results reduced from an operating profit of R20.8 million in the prior period to an operating loss of R12.4 million for the period under review. The loss for the period amounted to R6.8 million compared to a profit of R16.6 million in the prior period. Accordingly the headline loss for the six months amounted to 33.8 cents per share compared to a profit of 80.5 cents per share in the corresponding period. Retail The Queenspark retail segment turnover decreased by 10.3% and the gross profit margin decreased from 54.5% to 48.1% during the period. The impact of both the lower sales and lower gross margin resulted in the gross profit decreasing from R153.2 million to R121.2 million. As the cost price of goods sold is impacted by the movement in exchange rates the weaker rand negatively impacted the gross profit margin. The effects of the movement in the exchange rate could not be passed on to consumers under the current market conditions. Property In line with the business strategy the development of the Rex Trueform Office Park in Salt River is currently under way. This segment incurred a small loss for the period (R0.1 million) due to development costs. Capital expenditure of R8.4 million has been spent on the Rex Trueform Office Park during the period under review. Prospects Retail We anticipate that there will be a continued reduction in both sales and profitability in the second half of the financial year when compared to the corresponding period. As noted in the trading update dated 14 November 2012, the business is implementing various strategic initiatives which should have a positive impact in the medium term. Property The business will continue with the Rex Trueform Office Park development and accordingly a further R20 million will be spent on the project during the six months ending 30 June 2013. Any reference to the 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 CEA Radowsky (Chairman) (Chief Executive Officer) Cape Town 6 March 2013 REX TRUEFORM CLOTHING COMPANY LIMITED (Incorporated in the Republic of South Africa - Reg No. 1937/009839/06) ("the company" or "the group") Share codes: RTO - RTN - RTOP ISIN: ZAE000006144 - ZAE000009700 - ZAE000006151 Directors: ML Krawitz+ (Chairman), CEA Radowsky (Chief Executive Officer), DS Johnson, PE Shub, PM Naylor*, RV Orlin* and RW Rees (UK)* + Non-executive * Independent non-executive Registered office: Rex Buildings, 263 Victoria Road, Salt River, Cape Town, 7925 Secretary: SM Lawrence Transfer secretaries: Computershare Investor Services (Pty) Limited, 70 Marshall Street, Johannesburg, 2001 Sponsor: Java Capital Date: 07/03/2013 02:15:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 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