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Reviewed Condensed Consolidated Financial Statements Results for the year ended 30 June 2013
REX TRUEFORM CLOTHING COMPANY LIMITED
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA) (REG NO. 1937/009839/06)
("THE COMPANY" OR "THE GROUP" OR "REX TRUEFORM")
JSE SHARE CODES: RTO - RTN - RTOP
ISIN: ZAE000006144 - ZAE000009700 - ZAE000006151
REVIEWED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS RESULTS
FOR THE YEAR ENDED 30 JUNE 2013
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
2013 2012
(Reviewed) (Audited)
R'000 R'000
ASSETS
Non-current assets 114 458 90 263
Property, plant and equipment 89 631 74 910
Investment property 5 551 5 662
Intangible assets 8 010 4 510
Other investments 524 524
Deferred tax asset 10 742 4 657
Current assets 203 416 238 617
Inventories 88 231 61 881
Trade and other receivables 11 187 11 700
Forward exchange contracts 3 660 1 072
Income tax receivable 1 656 2 780
Cash and cash equivalents 98 682 161 184
Total assets 317 874 328 880
EQUITY AND LIABILITIES
Capital and reserves 259 753 281 538
Share capital 1 777 1 777
Share premium 25 836 25 836
Treasury shares (1 190) (1 453)
Other reserves 980 963
Retained earnings 232 350 254 415
Non-current liabilities 15 508 14 961
Post-retirement liability 2 161 2 381
Accrued operating lease liability 11 168 11 150
Deferred tax liability 2 179 1 430
Current liabilities 42 613 32 381
Provisions 3 077 -
Trade and other payables 39 473 32 357
Income tax payable 63 24
Total equity and liabilities 317 874 328 880
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
% 2013 2012
change (Reviewed) (Audited)
R'000 R'000
Revenue (10,7%) 483 957 541 676
Turnover (10,6%) 474 438 530 593
Cost of sales (231 176) (246 182)
Gross profit (14,5%) 243 262 284 411
Employment costs (104 358) (97 515)
Occupancy costs (84 102) (76 447)
Depreciation and amortisation (17 585) (21 338)
Other operating costs (59 434) (65 431)
Rental income 1 599 1 526
Royalties 1 009 1 038
Management fee income 471 373
Operating (loss)/profit (171,9%) (19 138) 26 617
Dividends received 13 13
Interest income 6 427 8 133
Interest expense (189) (272)
(Loss)/profit before tax (137,4%) (12 887) 34 491
Income tax expense 3 389 (10 711)
(Loss)/profit for the year (139,9%) (9 498) 23 780
Other comprehensive (loss)/income
Net change in fair value of available-for-sale
financial assets - (52)
Total comprehensive (loss)/income for the year (9 498) 23 728
(Loss)/profit attributable to:
Ordinary and "N" ordinary shareholders (9 515) 23 763
Preference shareholders 17 17
(Loss)/profit for the year (9 498) 23 780
Total comprehensive (loss)/income attributable to:
Ordinary and "N" ordinary shareholders (9 515) 23 711
Preference shareholders 17 17
Total comprehensive (loss)/income for the year (9 498) 23 728
Reconciliation of headline (loss)/earnings
(Loss)/profit attributable to equity holders (9 515) 23 763
Adjusted for:
Loss from disposal of property, plant and equipment 79 18
Impairment (reversal)/loss on equipment and shopfitting (310) 1 538
Headline (loss)/earnings (9 746) 25 319
Basic (loss)/earnings per ordinary share (cents) (139,9%) (46,3) 116,1
Headline (loss)/earnings per ordinary share
(cents) (138,3%) (47,4) 123,7
Diluted basic (loss)/earnings per ordinary
share (cents) (139,9%) (46,2) 115,7
Diluted headline (loss)/earnings per ordinary
share (cents) (138,4%) (47,3) 123,3
Dividend cover (based on headline earnings) (0,8) 2,0
Weighted average number of equity shares on which
earnings per share is based (000's) 20 555 20 469
Weighted average number of equity shares on which
diluted earnings per share is based (000's) 20 594 20 538
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
2013 2012
(Reviewed) (Audited)
R'000 R'000
Share capital 1 777 1 777
Share premium 25 836 25 836
Treasury shares
Opening balance (1 453) (1 762)
Proceeds from delivery of employee share options 263 309
Closing balance (1 190) (1 453)
Other reserves
Opening balance 963 968
Share-based payment expense 17 47
Fair value adjustment of available-for-sale financial assets - (52)
Closing balance 980 963
Retained earnings
Opening balance 254 415 241 294
(Loss)/profit for the year (9 498) 23 780
Preference dividends paid (17) (17)
Ordinary dividends paid (12 550) (10 642)
Closing balance 232 350 254 415
Total capital and reserves 259 753 281 538
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
2013 2012
(Reviewed) (Audited)
R'000 R'000
Operating (loss)/profit before working capital changes (1 654) 45 456
Working capital changes (18 206) 5 157
Interest income 6 427 8 133
Interest expense (189) (272)
Dividends paid (12 567) (10 659)
Dividends received 13 13
Income tax paid (784) (10 255)
Secondary tax on companies paid - (1 073)
Net cash (outflows)/inflows from operating activities (26 960) 36 500
Additions to property, plant and equipment (31 866) (26 253)
Additions to intangible assets (4 134) (3 862)
Proceeds from disposal of property, plant and equipment 195 229
Proceeds from disposal of discontinued operations - 5 412
Net cash outflows from investing activities (35 805) (24 474)
Proceeds from delivery of shares by share trust 263 309
Net cash inflows from financing activities 263 309
Net (decrease)/increase in cash and cash equivalents (62 502) 12 335
Cash and cash equivalents at the beginning of the year 161 184 148 849
Cash and cash equivalents at the end of the year 98 682 161 184
GROUP SEGMENTAL REPORTING
2013 2012
(Reviewed) (Audited)
R'000 R'000
Revenue
Total external retail revenue 475 918 532 004
Retail segment revenue 478 705 534 188
Intersegment revenue earned (2 787) (2 184)
Total external property revenue 1 599 1 526
Property segment revenue 5 527 5 388
Intersegment revenue earned (3 928) (3 862)
Dividends received 13 13
Interest income 6 427 8 133
Total group revenue 483 957 541 676
Segment operating (loss)/profit
Retail segment (loss)/profit (14 754) 28 681
Property segment (loss)/profit (243) 1 287
Group services operating loss (4 141) (3 351)
Total group operating (loss)/profit (19 138) 26 617
Depreciation and amortisation
Retail 17 308 21 113
Property 277 225
Total group depreciation and amortisation 17 585 21 338
Segment assets
Retail 217 474 214 762
Property 32 672 15 286
Group services* 67 728 98 832
Total group segment assets 317 874 328 880
Segment liabilities
Retail 51 333 42 389
Property 2 606 2 099
Group services* 4 182 2 854
Total group segment liabilities 58 121 47 342
Capital expenditure
Retail 19 030 26 991
Property 16 970 3 124
Total group capital expenditure 36 000 30 115
* Group services include corporate costs.
OTHER INFORMATION
Capital commitments
Authorised - not contracted for 32 361 56 685
Authorised - contracted for 3 048 7 955
Gross profit margin 51,3% 53,6%
Operating (loss)/profit margin (4,0%) 5,0%
Retail segment operating (loss)/profit margin (3,1%) 5,4%
NOTES
1 REVIEW BY AUDITORS
The condensed consolidated financial statements of Rex Trueform for the year ended
30 June 2013 have been reviewed by the company's auditors, KPMG Inc. In their
review report dated 5 September 2013, which is available for inspection at the
company's 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 consolidated preliminary Information Performed by the
Independent Auditor of the Entity, which applies to a review of consolidated
preliminary financial information, and have expressed an unmodified conclusion on
the condensed consolidated preliminary financial statements.
2 BASIS OF PREPARATION
The condensed consolidated preliminary financial statements are prepared in
accordance with the framework concepts and 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 SAICA Financial Reporting Guides as
issued by the Accounting Practises Committee and Financial Pronouncements as
issued by the Financial Reporting Standards Council, the requirements of the
Companies Act of South Africa and the JSE Listings Requirements. 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 2012.
The integrated annual report containing a detailed review of the operations of the
company will be posted to shareholders towards the end of September 2013.
The annual financial statements will be posted on the company's website
www.rextrueform.co.za at the end of September 2013.
COMMENTARY
As anticipated in the interim report, the group's retail segment continued to find
trading conditions difficult in the second six months.
The group's revenue for the year decreased by 10.7% to R484.0 million
(2012: R541.7 million) and the gross profit decreased by 14.5% to R243.3 million
(2012: R284.4 million). Group operating costs increased by 1.8% to R265.5 million
(2012: R260.8 million) and included a R3.1 million retrenchment provision incurred
as a result of the reorganising of the retail business.
The above resulted in the group's operating profit decreasing from R26.6 million to
a loss of R19.1 million. The loss after tax amounted to R9.5 million (2012: profit of
R23.8 million). In line with performance, headline earnings per share decreased by
138.3% resulting in a headline loss per share of 47.4 cents, and the earnings per
share decreased by 139.8% resulting in a loss per share of 46.3 cents.
Retail
The turnover in the Queenspark retail segment was R474.4 million (2012: R530.6 million),
a decrease of 10.6% on last year. The gross profit margin decreased to 51.3%
(2012 53.6%) mainly due to product inflation pressures resulting from the weakening of
the Rand. The retail segment operating profit decreased by 151.3% resulting in loss
of R14.7 million for the year (2012: profit of 28.7 million).
Property
As noted in the interim report and in line with the business strategy, the development
of the Rex Trueform Office Park in Salt River continued during the year. The segment
made a small operating loss for the year (R0.2 million) mainly due to higher operating
costs. Capital expenditure of R17.0 million was incurred in the segment during the
current year, of which R16.6 million relates to the Rex Trueform Office Park.
Prospects
Retail
The outlook for retail sales continues to be impacted by the slowdown in the growth
of economy, consumer debts levels, tight lending standards and rising living costs.
Ongoing weakness in the Rand exchange rate against the US Dollar will continue to add
inflationary pressure to the cost of merchandise. International brands continue to
enter the local clothing retail market, intensifying industry competition.
Against this back-drop, the company's retail segment will remain under pressure in
the 2014 financial year. Certain strategic initiatives initiated during the year
are expected to positively impact the year ahead. Further initiatives are planned and
will be implemented during the forthcoming year.
Property
The main focus of this segment relates to the development of the Rex Trueform Office
Park. The main construction activities are expected to be completed during the 2014
financial year, where-after substantial tenant occupancy is expected.
Dividend
The board of directors is proposing to shareholders that the dividend on the ordinary
and "N" ordinary shares be kept at 61 cents per share (2012: 61 cents per share).
Shareholders will be asked to consider and approve the directors' dividend proposal
at the annual general meeting of the company to be held on 14 November 2013.
An announcement detailing the terms of the dividend declaration will be made
immediately following the annual general meeting.
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.
Rex Trueform Clothing Company Limited
(Incorporated in the Republic of South Africa) (Reg No. 1937/009839/06)
("the company" or "the group" or "Rex Trueform")
JSE share codes: RTO - RTN - RTOP
ISIN: ZAE000006144 - ZAE000009700 - ZAE000006151.
Registered office: Rex Buildings, 263 Victoria Road, Salt River, Cape Town, 7925
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
There were no changes to the board of directors during the year, other than the
resignation of SM Lawrence as company secretary and the appointment of AT Snitcher
in her stead with effect from 12 July 2013.
Company secretary: AT Snitcher
Transfer secretaries: Computershare Investor Services (Pty) Ltd, 70 Marshall Street,
Johannesburg, 2001
Sponsor: Java Capital
Websites: www.queenspark.com - www.rextrueform.com
Date: 06/09/2013 04:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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