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Preliminary report on the audited group annual results for the 52 weeks ended 29 June 2014
TRUWORTHS INTERNATIONAL LTD
REGISTRATION NUMBER: 1944/017491/06
JSE CODE: TRU
NSX CODE: TRW
ISIN: ZAE000028296
PRELIMINARY REPORT ON THE AUDITED GROUP ANNUAL RESULTS
FOR THE 52 WEEKS ENDED 29 JUNE 2014
FINANCIAL HIGHLIGHTS
Sale of merchandise up 7.1%
Gross margin at 55.9%
Operating margin at 32.1%
Annual dividend per share up 6.4%
Headline earnings per share up 1.1%
Fully diluted headline earnings per share up 1.5%
Cash flow per share up 16.8%
GROUP PROFILE
Truworths International Ltd is an investment holding and management company listed on
the JSE and the Namibian Stock Exchange. Its principal trading entities, Truworths Ltd
and Young Designers Emporium (Pty) Ltd, are engaged either directly or through agencies,
franchises or subsidiaries, in the retailing of fashion apparel and related merchandise.
Truworths International Ltd and its subsidiaries (the Group) operate primarily in
South Africa, and elsewhere in sub-Saharan Africa. The Group is a credit retailer with
over 70% of its sales on credit.
TRADING AND FINANCIAL PERFORMANCE
The general economic environment during the 52-week period ended 29 June 2014
("the reporting period") was characterised by pressure on consumers as a result of high
levels of unemployment, industrial action, consumer credit retraction and increased
basic living costs. Group retail sales for the reporting period increased by 6.8% to
R10.8 billion compared to the 52-week prior reporting period ("the prior period")
with cash sales growth of 11% and credit sales growth of 5%. The constrained credit
sales growth is mainly a consequence of changes in the credit strategy implemented
from the second half of calendar 2012 in response to the deteriorating credit environment.
This resulted in lower account growth leading to the weaker credit sales growth.
Like-for-like store retail sales grew by 0.6% while product inflation averaged 9%
(2013: 2%) for the reporting period. Group sale of merchandise, which comprises Group
retail sales and franchise sales less accounting adjustments, grew 7.1% to R10.5 billion.
Trading space increased by 10.3% over the prior period-end following the opening of a
net 37 stores across the Group. The Group's store base totalled 641 (2013: 604) at the
end of the reporting period. This includes 38 stores outside South Africa (2013: 40)
after the closure of two stores in Lesotho.
Divisional sales 29 Jun 30 Jun % change
2014 2013 on prior
Rm Rm period
Truworths ladieswear 3 895 3 661 6
Truworths menswear 2 198 1 987 11
Identity 1 721 1 586 9
Daniel Hechter 1 202 1 206 -
Elements 510 480 6
LTD 470 405 16
Inwear 450 451 -
Other* 316 298 6
Retail sales 10 762 10 074 7
Franchise sales 8 9 (11)
Accounting adjustments (312) (318) (2)
Sale of merchandise 10 458 9 765 7
YDE agency sales 305 278 10
* Includes cellular and Truworths Jewellery divisions.
The Group's gross margin decreased to 55.9% as a result of increased markdowns from
56.6% for the prior period. It remains within the target range of 54% to 57%. Trading
expenses increased 15% to R3.7 billion (2013: R3.2 billion), mainly as a result of a
24% increase in trade receivable costs attributable to the challenging consumer credit
environment, as well as a foreign exchange loss of R36 million (2013: foreign exchange
gain of R47 million) arising from the marked-to-market adjustment on open forward
exchange contracts. Trading expenses as a percentage of the sale of merchandise
increased to 35.1% (2013: 32.8%). Interest received increased 13% to R917 million
(2013: R814 million).
Operating profit was unchanged at R3.4 billion and the operating margin declined to
32.1% (2013: 34.5%) as a result of the reduced gross margin, the increase in trade
receivable costs and the foreign exchange loss. If the foreign exchange losses and
gains were to be excluded, the operating margin would have decreased to 32.4%
(2013: 34.0%).
Inventory balances were 10% up at period-end, as a result of the store growth in the
period, and inventory turn was 5.3 times based on stock levels at period-end
(2013: 5.4 times).
A final dividend of 169 cents per share has been declared in respect of the reporting
period, bringing the total dividend for the reporting period to 385 cents, an increase
of 6.4% over the prior period. Dividend cover has been reduced to 1.5 times.
Headline earnings per share (HEPS) increased 1.1% to 576.8 cents (2013: 570.8 cents).
Fully diluted HEPS increased 1.5% to 569.3 cents (2013: 560.7 cents).
The Group's financial position continued to strengthen, with net asset value per share
increasing by 8% to 1 605.1 cents (2013: 1 489.7 cents). The returns on equity and
assets, although high at 37% (2013: 39%) and 42% (2013: 46%) respectively, were lower
than management's target range. Asset turnover remained at 1.3 times.
CREDIT MANAGEMENT
Gross trade receivables grew by 12% to R4.7 billion. The growth is attributable to
Group credit sales growing by 5% over the prior period, a continuing shift from
six months interest-free to longer-term interest-bearing payment plans and the general
deterioration in the credit environment. Credit sales contributed 71% (2013: 72%) to
retail sales for the reporting period. At period-end it was encouraging to note that
83% (2013: 82%) of the Group's active account holders were able to purchase because
they were not in arrears, while the percentage of delinquent account balances has
reduced year-on-year from 15.1% to 14.2% of trade receivables.
In line with the board's outlook paragraph contained in the Group's unaudited interim
results for the 26 weeks ended 29 December 2013, the trading environment remained
challenging for the second half of the reporting period. This environment, coupled
with the Group's restrictive credit granting criteria, has limited new account growth
with the consequence that new account acceptance rates have decreased from 31% in the
prior period (and 38% in the year prior to that) to 26%. This has resulted in the
Group's active account base growing by 1% to 2.6 million accounts, impacting negatively
on credit retail sales growth.
Net bad debt as a percentage of gross trade receivables grew to 12.9% (2013: 10.4%).
The doubtful debt allowance as a percentage of gross trade receivables has been
increased to 12.5% (2013: 12.0%). Trade receivable costs have increased by 24% to
R916 million (2013: R739 million).
CAPITAL MANAGEMENT
During the reporting period the Group generated R2.5 billion in cash from operations
and this funded dividend payments (R1 566 million), capital expenditure (R289 million)
and share buy-backs (R490 million). Cash and cash equivalents increased 20% to
R1.6 billion at period-end.
SUCCESSION
The board advises that Michael Mark has served the Group as CEO for 23 years with
distinction, leading it from a niche retailer to one of South Africa's most established
and successful retailers. Shareholders were previously informed that his current
three-year contract ends at 30 June 2015. The Group has embarked on a CEO succession
process using external consultants to facilitate and support the board. Michael will
continue in his role as CEO and continue to support the transition process for as long
as is necessary. The succession process is well advanced. Michael will continue to serve
as Chairman of the operating company, Truworths Ltd during the transition period, and
will continue to serve on the Truworths International board. Further announcements will
be made in due course.
OUTLOOK
Management remains committed to implementing the Group's business philosophy which
has guided operating activities over many years. The supply of internationally
inspired, high quality fashionable clothing to youthful South Africans continues to
drive the Group's strategy and will remain the focus for the period ahead. Management
is in the process of implementing various strategies to deal with changing consumer
trends and the restrictive credit environment.
The trading and credit environment is expected to remain challenging during the
2015 financial period.
Capital expenditure of R448 million has been committed for the 2015 financial period
and will be used primarily for store renovation and development (R356 million), new
information systems infrastructure (R65 million) and further investment in
distribution facilities (R17 million).
Group retail sales for the first seven weeks of the 2015 financial period increased
by 8.7% over the corresponding seven weeks in the prior reporting period.
Product inflation is anticipated to be between 5% and 6% during the 2015 reporting
period and trading space is planned to grow by approximately 6%.
H Saven MS Mark
Chairman Chief Executive Officer
FINAL DIVIDEND
The directors of the company have resolved to declare a gross cash dividend from
retained earnings in respect of the 52-week period ended 29 June 2014 in the amount
of 169 cents (2013: 158 cents) per share to shareholders reflected in the company's
register on the record date, being Friday, 12 September 2014.
The last day to trade in the company's shares cum dividend is Friday, 5 September 2014.
Trading in the company's share ex dividend will commence on Monday, 8 September 2014.
Consequently no dematerialisation or rematerialisation of the company's shares may
take place over the period from Monday, 8 September 2014 to Friday, 12 September 2014,
both days inclusive. The dividend will be payable in South African Rand on Monday,
15 September 2014.
Dividends will be paid net of the 15% dividends tax, to be withheld and remitted to
the South African Revenue Service. Such tax must be withheld unless beneficial owners
of the dividend have provided the necessary documentary proof to the relevant
regulated intermediary (being a broker, CSD participant, nominee company or the
company's transfer secretaries Computershare Investor Services (Pty) Ltd, PO Box 61051,
Marshalltown, 2107 South Africa) that they are exempt therefrom, or entitled to a
reduced rate, as a result of a double taxation agreement between South Africa and the
country of tax domicile of such owner.
The dividends tax, if applicable at the rate of 15%, will result in a net cash dividend
per share of 143.65 cents. No secondary tax on companies (STC) credits were utilised when
determining the net dividend. The company has 422 638 973 ordinary shares in issue on
21 August 2014.
In accordance with the company's recently adopted new memorandum of incorporation:
- the dividend will only be paid by electronic funds transfer, and no cheque payments
will be made. Accordingly, certificated shareholders who have not yet provided their
bank account details should do so by contacting the company's transfer secretaries;
and
- the directors have determined that gross dividends amounting to less than 1 000 cents,
due to any one shareholder of the company's shares held in certificated form, will not
be paid, unless otherwise requested in writing, but the net amount thereof will be
aggregated with other such net amounts and donated to a charity to be nominated by
the directors.
By order of the board
C Durham
Company Secretary
Cape Town
21 August 2014
ABRIDGED GROUP STATEMENTS OF FINANCIAL POSITION
at 29 June at 30 June at 1 July
2014 2013 2012
Audited Audited Audited
Restated* Restated*
Rm Rm Rm
ASSETS
Non-current assets 1 360 1 280 1 197
Property, plant and equipment 934 857 775
Goodwill 90 90 90
Intangible assets 106 103 94
Derivative financial assets 6 19 34
Available-for-sale assets 9 4 3
Loans and receivables 99 118 143
Deferred tax 116 89 58
Current assets 6 716 5 991 5 720
Inventories 863 787 670
Trade and other receivables 4 182 3 766 3 421
Derivative financial assets 5 42 7
Prepayments 78 71 62
Cash and cash equivalents 1 588 1 325 1 560
Total assets 8 076 7 271 6 917
EQUITY AND LIABILITIES
Total equity 6 642 6 224 5 986
Share capital and premium 368 293 205
Treasury shares (652) (2 028) (1 274)
Retained earnings 6 774 7 830 6 949
Non-distributable reserves 152 129 106
Non-current liabilities 88 96 95
Post-retirement medical benefit obligation 51 48 42
Leave pay obligation 3 4 3
Cash-settled compensation obligation 4 8 12
Straight-line operating lease obligation 30 36 38
Current liabilities 1 346 951 836
Trade and other payables 1 134 715 595
Provisions 47 71 73
Derivative financial liability 8 - -
Tax payable 157 165 168
Total liabilities 1 434 1 047 931
Total equity and liabilities 8 076 7 271 6 917
Number of shares in issue
(net of treasury shares) (millions) 413.8 417.8 424.0
Net asset value per share (cents) 1 605.1 1 489.7 1 411.8
Key ratios
Return on equity (%) 37 39 40
Before tax return on capital (%) 52 55 58
Before tax return on assets (%) 42 46 46
Inventory turn (times) 5.3 5.4 5.7
Asset turnover (times) 1.3 1.3 1.3
* Resulting from the adoption of new IFRS (refer to note 2).
ABRIDGED GROUP STATEMENTS OF COMPREHENSIVE INCOME
52 weeks 52 weeks
to 29 June to 30 June
2014 2013
Audited % Audited
Note Rm change Rm
Revenue 3 11 642 8 10 809
Sale of merchandise 10 458 7 9 765
Cost of sales (4 617) (4 241)
Gross profit 5 841 6 5 524
Other income 235 226
Trading expenses (3 668) 15 (3 202)
Depreciation and amortisation (184) (160)
Employment costs (1 024) (986)
Occupancy costs (954) (843)
Trade receivable costs (916) (739)
Other operating costs (590) (474)
Trading profit 2 408 (5) 2 548
Interest received 917 814
Dividends received 32 4
Profit before tax 3 357 - 3 366
Tax expense (951) (958)
Profit for the period, fully attributable to
shareholders of the company 2 406 - 2 408
Other comprehensive income to be reclassified
to profit or loss in subsequent periods (3) -
Movement in effective cash flow hedge (2) (3)
Fair value adjustment on personal lines
insurance business arrangement 1 -
Deferred tax on movement in effective cash flow hedge (2) 4
Movement in foreign currency translation reserve - (1)
Other comprehensive income not to be reclassified
to profit or loss in subsequent periods 3 -
Remeasurement gains on defined benefit plans 3 -
Other comprehensive income for the period,
net of tax - -
Total comprehensive income for the period, fully
attributable to shareholders of the company 2 406 2 408
Basic earnings per share (cents) 575.9 1 570.8
Headline earnings per share (cents) 576.8 1 570.8
Fully diluted basic earnings
per share (cents) 568.4 1 560.7
Fully diluted headline earnings
per share (cents) 569.3 2 560.7
Weighted average number of shares (millions) 417.8 421.9
Key ratios
Gross margin (%) 55.9 56.6
Trading expenses to sale of merchandise (%) 35.1 32.8
Trading margin (%) 23.0 26.1
Operating margin (%) 32.1 34.5
ABRIDGED GROUP STATEMENTS OF CHANGES IN EQUITY
Share Non-
capital distribut-
and Treasury Retained able Total
premium shares earnings reserves equity
Rm Rm Rm Rm Rm
2014
Balance at the beginning of
the period* 293 (2 028) 7 830 129 6 224
Profit and total comprehensive
income for the period - - 2 409 (3) 2 406
Profit for the period - - 2 406 - 2 406
Other comprehensive income for
the period - - 3 (3) -
Dividends - - (1 568) - (1 568)
Premium on shares issued 44 - - - 44
Shares repurchased - (490) - - (490)
Shares repurchased and cancelled - 1 897 (1 897) - -
Shares issued in terms of the
restricted share scheme 31 (31) - - -
Share-based payments - - - 26 26
Balance at 29 June 2014 368 (652) 6 774 152 6 642
2013
Balance at the beginning of
the period 205 (1 274) 6 944 106 5 981
Remeasurement gains on defined
benefit plans* - - 5 - 5
Audited restated balance at
the beginning of the period 205 (1 274) 6 949 106 5 986
Profit and total comprehensive
income for the period - - 2 408 - 2 408
Dividends - - (1 527) - (1 527)
Premium on shares issued
(includes R61 million in
respect of the restricted
share scheme) 88 - - - 88
Shares repurchased - (691) - - (691)
Shares issued in terms of the
restricted share scheme - (61) - - (61)
Shares acquired upon forfeiture
of equity-based awards - (2) - - (2)
Share-based payments - - - 23 23
Balance at 30 June 2013 293 (2 028) 7 830 129 6 224
* Resulting from the adoption of new IFRS (refer to note 2).
Dividends (cents per share) 2014 2013
Final - payable/paid September 169 158
Interim - paid March 216 204
385 362
ABRIDGED GROUP STATEMENTS OF CASH FLOWS
52 weeks 52 weeks
to 29 June to 30 June
2014 2013
Audited Audited
Rm Rm
CASH FLOWS FROM OPERATING ACTIVITIES
Cash flow from trading and cash EBITDA* 2 682 2 720
Working capital movements (105) (352)
Cash generated from operations 2 577 2 368
Interest received 917 814
Dividends received 32 4
Tax paid (984) (988)
Cash inflow from operations 2 542 2 198
Dividends paid (1 566) (1 526)
Net cash from operating activities 976 672
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property, plant and equipment to expand operations (221) (203)
Acquisition of plant and equipment to maintain operations (54) (50)
Acquisition of computer software (14) (17)
Proceeds on disposal of plant and equipment 2 -
Loans advanced - (1)
Loans repaid 21 29
Acquisition of mutual fund units (1) -
Net cash used in investing activities (267) (242)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds on shares issued 44 27
Shares repurchased by subsidiaries (490) (691)
Net cash used in financing activities (446) (664)
Net increase/(decrease) in cash and cash equivalents 263 (234)
Cash and cash equivalents at the beginning of the period 1 325 1 560
Net foreign exchange difference - (1)
CASH AND CASH EQUIVALENTS AT THE REPORTING DATE 1 588 1 325
Key ratios
Cash flow per share (cents) 608.4 521.0
Cash equivalent earnings per share (cents) 634.8 604.9
Cash realisation rate (%) 96 86
* Earnings before interest received, tax, depreciation and amortisation.
SELECTED EXPLANATORY NOTES
1 BASIS OF PREPARATION
The information in this preliminary report has been extracted from the Group's 2014
annual financial statements. The preliminary report has been prepared in compliance
with International Financial Reporting Standards (IFRS), the SAICA Financial
Reporting Guides as issued by the Accounting Practices Committee, Financial
Reporting Pronouncements as issued by the Financial Reporting Standards Council,
IAS 34: Interim Financial Reporting, the South African Companies Act (71 of 2008,
as amended) and the Listings Requirements of the JSE.
The Group's 2014 annual financial statements and this preliminary report have been
audited by the Group's external auditors, Ernst & Young Inc., and their unqualified
audit opinion on such financial statements and on this preliminary report are
available for inspection at the company's registered office.
The Group's 2014 annual financial statements have been prepared in accordance with
the going concern and historical cost bases except where otherwise indicated in the
Group's accounting policies. The accounting policies have been applied uniformly
throughout the Group and are consistent with those applied in the prior period,
except as mentioned in note 2. The presentation currency of the financial statements
is the South African Rand (R) and all amounts are rounded to the nearest million.
This preliminary report has been prepared under the supervision of DB Pfaff CA(SA),
the Chief Financial Officer of the Group.
2 ACCOUNTING POLICIES
The accounting policies and methods of computation applied in the preparation of
the Group's 2014 annual financial statements are consistent with those applied in
the preparation of the Group's annual financial statements for the period ended
30 June 2013, except for the changes resulting from the adoption of the statements
as described below:
IFRS 10: Consolidated Financial Statements
This standard establishes a single control model that applies to all entities
including special purpose entities. It amends the definition of control to include
three elements, namely power over an investee, exposure or rights to variable
returns of the investee and the ability to use power over the investee to affect
the investor's returns.
The Group has performed the necessary assessments and applied the principles to all
interests in other entities which could be considered to fall within the scope of
the new standard, and has concluded that it is not required to consolidate or
deconsolidate any such interests at the reporting date. However, the Group has
included these interests in the statement of financial position as available-for-sale
investments, where appropriate. This standard has not had any material impact on the
financial position and financial performance of the Group.
IFRS 12: Disclosure of Interest in Other Entities
This standard consolidates all of the disclosures that were previously in
IAS 27: Consolidated and Separate Financial Statements, as well as all of the
disclosures that were previously included in IAS 31: Investments in Joint Ventures
and IAS 28: Investments in Associates. The new standard increases transparency in
financial reporting where the reporting entity has an interest in subsidiaries,
joint arrangements, associates and/or unconsolidated structured entities.
The adoption of this standard has resulted in additional disclosures in relation
to the Group's interests in entities other than subsidiaries.
IFRS 13: Fair Value Measurement
This standard establishes a single source of guidance under IFRS for all fair value
measurements and defines fair value as an exit price.
The adoption of this standard has resulted in additional disclosures, but has not
had any material impact on the financial position or performance of the Group.
IAS 19: Employee Benefits (Revised)
Revisions to this standard include significant changes to the accounting for pension
and post-retirement benefit plans and various other minor changes. Of these changes,
the most fundamental is the removal of the corridor mechanism for recognising
actuarial gains and losses. In terms of the revised standard all actuarial surpluses
and deficits are recognised in the statement of financial position and other
comprehensive income and are not deferred. The revised standard was applied
retrospectively in accordance with the requirements of IAS 8: Accounting Policies -
Changes in Accounting Estimates and Errors, resulting in the restatement of all
affected opening comparative balances of the 2013 reporting period.
This has resulted in the recognition of the previously unrecognised actuarial gain
in relation to the Group's post-retirement medical benefit obligation of R5 million
directly in other comprehensive income. All actuarial gains and losses arising after
this date are also recognised directly in other comprehensive income in the period
they arise.
The revised standard also requires short-term employee benefits to be classified as
such, based on the expected timing of settlement rather than employee entitlement.
This has resulted in the reclassification of R3 million of the opening comparative
balance of the 2013 reporting period of the Group's leave pay obligation from
short-term employee benefits to other long-term employee benefits. Changes in the
carrying amount of liabilities for other long-term employment benefits continue to
be recognised in profit or loss.
Other IFRS amendments and International Financial Reporting Interpretations
Committee (IFRIC) interpretations
Various other new and amended IFRS and IFRIC interpretations that have been issued
are effective but are not applicable to the Group's activities.
52 weeks 52 weeks
to 29 June to 30 June
2014 2013
Audited % Audited
Rm change Rm
3 REVENUE
Sale of merchandise 10 458 7 9 765
Retail sales 10 762 10 074
Accounting adjustments* (312) (318)
Franchise sales 8 9
Interest received 917 13 814
Trade receivables interest 828 724
Investment interest 89 90
Other income 235 4 226
Commission 118 112
Display fees 53 48
Financial services income 50 51
Lease rental income 7 7
Other 6 6
Royalties 1 2
Dividends received 32 4
Dividends received from dissolution of
an insurance cell captive 29 -
Dividends received from insurance
business arrangements 3 4
Total revenue 11 642 8 10 809
* Accounting adjustments made in terms of IFRS and generally accepted accounting
practice relating to promotional vouchers, staff discounts on merchandise purchases,
cellular retail sales, notional interest on non-interest-bearing trade receivables
and the sales returns provision.
52 weeks 52 weeks
to 29 June to 30 June
2014 2013
Audited % Audited
Rm change Rm
4 RECONCILIATION OF PROFIT FOR THE PERIOD
TO HEADLINE EARNINGS
Profit for the period, fully attributable
to shareholders of the company 2 406 2 408
Adjusted for:
Loss on disposal of plant and equipment 4 -
Headline earnings 2 410 - 2 408
5 SEGMENT REPORTING
The Group's reportable segments have been identified as the Truworths and Young
Designers Emporium (YDE) business units. The Truworths business unit comprises all
the retailing activities conducted by the Group, through which the Group retails
fashion apparel comprising clothing, footwear and other fashion products to women,
men and children, other than by the YDE business unit. The YDE business unit
comprises the agency activities through which the Group retails clothing, footwear
and related products on behalf of emerging South African designers.
Management monitors the operating results of the business segments separately for
the purpose of making decisions about resources to be allocated and of assessing
performance. Segment performance is reported on an IFRS basis and evaluated based
on revenue and profit before tax.
Consolidation
Truworths YDE entries Group
Rm Rm Rm Rm
2014
Total third party revenue 11 519 123 - 11 642
Third party 11 485 123 34 11 642
Inter-segment 34 - (34) -
Depreciation and amortisation 179 5 - 184
Employment costs 1 005 14 5 1 024
Occupancy costs 917 37 - 954
Trade receivable costs 916 - - 916
Other costs 613 15 (38) 590
Interest received 913 2 2 917
Profit for the period 2 334 38 34 2 406
Profit before tax 3 271 52 34 3 357
Tax expense (937) (14) - (951)
Segment assets 11 372 197 (3 493) 8 076
Segment liabilities 1 563 7 (136) 1 434
Capital expenditure 283 6 - 289
Gross margin (%) 55.9 - - 55.9
Trading margin (%) 22.5 41.5 - 23.0
Operating margin (%) 31.3 43.1 - 32.1
Inventory turn (times) 5.3 - - 5.3
Credit:cash sales mix (%) 71:29 24:76 - 71:29
2013
Total third party revenue 10 722 111 (24) 10 809
Third party 10 691 111 7 10 809
Inter-segment 31 - (31) -
Depreciation and amortisation 156 4 - 160
Employment costs 973 13 - 986
Occupancy costs 810 33 - 843
Trade receivable costs 739 - - 739
Other costs 493 15 (34) 474
Interest received 810 1 3 814
Profit for the period 2 367 32 9 2 408
Profit before tax 3 312 45 9 3 366
Tax expense (945) (13) - (958)
Segment assets 10 125 154 (3 008) 7 271
Segment liabilities* 1 149 1 (103) 1 047
Capital expenditure 268 2 - 270
Gross margin (%) 56.6 - - 56.6
Trading margin (%) 25.6 39.7 - 26.1
Operating margin (%) 33.9 40.8 - 34.5
Inventory turn (times) 5.4 - - 5.4
Credit:cash sales mix (%) 72:28 25:75 - 72:28
* Resulting from the adoption of new IFRS (refer to note 2).
Contribution to revenue Contribution to revenue
2014 2014 2013 2013
Rm % Rm %
Third party revenue
South Africa 11 219 96.4 10 460 96.8
Namibia 201 1.7 171 1.6
Swaziland 70 0.6 52 0.5
Botswana 63 0.5 49 0.5
Zambia 20 0.2 16 0.1
Nigeria 19 0.2 16 0.1
Ghana 17 0.1 14 0.1
Lesotho 15 0.1 13 0.1
Mauritius 10 0.1 9 0.1
Franchise sales 8 0.1 9 0.1
Kenya 8 0.1 8 0.1
Lesotho - - 1 -
Total third party revenue 11 642 100 10 809 100
29 June 30 June
2014 2013
Audited Audited
Rm Rm
6 CAPITAL COMMITMENTS
Capital expenditure authorised but not contracted:
Store renovation and development 356 259
Computer infrastructure 65 59
Distribution facilities 17 60
Head office refurbishment 7 4
Motor vehicles 3 6
Total capital commitments 448 388
The capital commitments will be financed from cash generated from operations and
available cash resources and are expected to be incurred in the 2015 reporting period.
7 EVENTS AFTER THE REPORTING DATE
No event, material to the understanding of this preliminary report, has occurred
between the reporting date and the date of approval of the report.
CORPORATE INFORMATION
Truworths International Ltd: Registration number: 1944/017491/06
Tax reference number: 9875/145/71/7
JSE code: TRU
NSX code: TRW
ISIN: ZAE000028296
Registered office: No. 1 Mostert Street, Cape Town, 8001, South Africa;
PO Box 600, Cape Town, 8000, South Africa
Sponsor in South Africa: One Capital
Sponsor in Namibia: Old Mutual Investment Services (Namibia) (Pty) Ltd
Auditors: Ernst & Young Inc.
Transfer secretaries: Computershare Investor Services (Pty) Ltd,
70 Marshall Street, Johannesburg, 2001, South Africa;
PO Box 61051, Marshalltown, 2107, South Africa;
or Transfer Secretaries (Pty) Ltd, Robert Mugabe Avenue No. 4 Windhoek, Namibia;
PO Box 2401, Windhoek, Namibia
Company Secretary: C Durham
Directors: H Saven (Chairman)§‡, MS Mark (CEO)*, DB Pfaff (CFO)*, RG Dow§‡,
KI Mampeule§‡, CT Ndlovu§‡, RJA Sparks§‡, AJ Taylor§‡ and MA Thompson§‡
* Executive § Non-executive ‡ Independent
Website: www.truworths.co.za
Date: 21/08/2014 03:22:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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