Wrap Text
Reviewed condensed consolidated preliminary financial statements results for the year ended 30 June 2014
REX TRUEFORM CLOTHING COMPANY LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1937/009839/06)
JSE SHARE CODES: RTO - RTN - RTOP
ISIN: ZAE000006144 - ZAE000009700 - ZAE000006151
("the company" or "the group" or "Rex Trueform")
REVIEWED CONDENSED CONSOLIDATED PRELIMINARY FINANCIAL STATEMENTS RESULTS FOR THE YEAR ENDED 30 JUNE 2014
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
2014 2013
(Reviewed) (Audited)
R'000 R'000
ASSETS
Non-current assets 142 159 114 458
Property, plant and equipment 108 762 89 631
Investment property 5 440 5 551
Intangible assets 13 920 8 010
Other investments 524 524
Deferred tax asset 13 513 10 742
Current assets 151 717 203 416
Inventories 82 124 88 231
Amounts receivable from holding company 43 -
Trade and other receivables 13 671 11 187
Forward exchange contracts - 3 660
Income tax receivable 215 1 656
Cash and cash equivalents 55 664 98 682
Total assets 293 876 317 874
EQUITY AND LIABILITIES
Capital and reserves 237 313 259 753
Share capital 1 777 1 777
Share premium 25 836 25 836
Treasury shares (1 133) (1 190)
Other reserves 1 081 980
Retained earnings 209 752 232 350
Non-current liabilities 15 110 15 508
Post-retirement liability 1 988 2 161
Accrued operating lease liability 12 833 11 168
Deferred tax liability 289 2 179
Current liabilities 41 453 42 613
Provisions - 3 077
Trade and other payables 40 436 39 473
Forward exchange contracts 927 -
Income tax payable 90 63
Total equity and liabilities 293 876 317 874
OTHER INFORMATION
Capital commitments
Authorised - not contracted for 36 362 32 361
Authorised - contracted for 11 989 3 048
Gross profit margin 49.2% 51.3%
Operating loss margin (3.5%) (4.0%)
Retail segment operating loss margin (2.8%) (3.1%)
Net asset value - R 11.52 12.61
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
% 2014 2013
change (Reviewed) (Audited)
R'000 R'000
Revenue 3.6% 501 207 483 957
Turnover 3.7% 492 079 474 438
Cost of sales (249 774) (231 176)
Gross profit (0.4%) 242 305 243 262
Other income 81.4% 5 585 3 079
Other operating costs (0.1%) (265 192) (265 479)
Operating loss (9.6%) (17 302) (19 138)
Dividend income 16 13
Finance income 3 527 6 427
Finance costs (201) (189)
Loss before tax 8.3% (13 960) (12 887)
Income tax expense 3 929 3 389
Loss for the year 5.6% (10 031) (9 498)
Other comprehensive income:
Actuarial gains on post-retirement defined benefit plan 93 -
Total comprehensive income for the year (9 938) (9 498)
Loss attributable to:
Ordinary and "N" ordinary shareholders (10 048) (9 515)
Preference shareholders 17 17
Loss for the year (10 031) (9 498)
Total comprehensive income attributable to:
Ordinary and "N" ordinary shareholders (9 955) (9 515)
Preference shareholders 17 17
Total comprehensive income for the year (9 938) (9 498)
Reconciliation of headline loss
Loss attributable to equity holders (10 048) (9 515)
Adjusted for:
(Profit)/loss from disposal of property, plant
and equipment (826) 79
Impairment loss/(reversal) on equipment and shopfittings 2 447 (310)
Headline loss (8 427) (9 746)
Basic loss per ordinary share (cents) 5.4% (48.8) (46.3)
Headline loss per ordinary share (cents) (13.5%) (41.0) (47.4)
Diluted basic loss per ordinary share (cents) 5.6% (48.8) (46.2)
Diluted headline loss per ordinary share (cents) (13.5%) (40.9) (47.3)
Dividend cover (based on headline loss) - (0.8)
Weighted average number of equity shares on which
loss per share is based (000's) 20 574 20 555
Weighted average number of equity shares on which
diluted loss per share is based (000's) 20 603 20 594
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
2014 2013
(Reviewed) (Audited)
R'000 R'000
Share capital 1 777 1 777
Share premium 25 836 25 836
Treasury shares
Opening balance (1 190) (1 453)
Proceeds from delivery of employee share options 57 263
Closing balance (1 133) (1 190)
Other reserves
Opening balance 980 963
Share-based payment expense 8 17
Actuarial gains on post-retirement defined benefit plans 93 -
Closing balance 1 081 980
Retained earnings
Opening balance 232 350 254 415
Loss for the year (10 031) (9 498)
Preference dividends paid (17) (17)
Ordinary dividends paid (12 550) (12 550)
Closing balance 209 752 232 350
Total capital and reserves 237 313 259 753
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
2014 2013
(Reviewed) (Audited)
R'000 R'000
Operating profit/(loss) before working capital changes 3 091 (1 654)
Working capital changes 9 137 (18 206)
Interest income 3 527 6 427
Interest expense (201) (189)
Dividends paid (12 567) (12 567)
Dividends received 16 13
Income tax received/(paid) 736 (784)
Net cash inflows/(outflows) from operating activities 3 739 (26 960)
Additions to property, plant and equipment (42 704) (31 866)
Additions to intangible assets (5 170) (4 134)
Proceeds from disposal of property, plant and equipment 60 195
Proceeds from disposal of trademark 1 000 -
Net cash outflows from investing activities (46 814) (35 805)
Proceeds from delivery of shares by share trust 57 263
Net cash inflows from financing activities 57 263
Net decrease in cash and cash equivalents (43 018) (62 502)
Cash and cash equivalents at the beginning of the year 98 682 161 184
Cash and cash equivalents at the end of the year 55 664 98 682
GROUP SEGMENTAL REPORTING
2014 2013
(Reviewed) (Audited)
R'000 R'000
Revenue
Total external retail revenue 493 759 475 918
Retail segment revenue 497 405 478 705
Intersegment revenue earned (3 646) (2 787)
Total external property revenue 3 905 1 599
Property segment revenue 8 146 5 527
Intersegment revenue earned (4 241) (3 928)
Dividends received 16 13
Interest income 3 527 6 427
Total group revenue 501 207 483 957
Segment operating loss
Retail segment loss (14 046) (14 754)
Property segment profit/(loss) 22 (243)
Group services operating loss (3 278) (4 141)
Total group operating loss (17 302) (19 138)
Depreciation and amortisation
Retail 22 151 17 308
Property 751 277
Total group depreciation and amortisation 22 902 17 585
Segment assets
Retail 203 295 217 474
Property 60 622 32 672
Group services* 29 959 67 728
Total group segment assets 293 876 317 874
Segment liabilities
Retail 49 908 51 333
Property 3 373 2 606
Group services* 3 282 4 182
Total group segment liabilities 56 563 58 121
Capital expenditure
Retail 19 718 19 030
Property 28 156 16 970
Total group capital expenditure 47 874 36 000
* Group services include corporate costs.
NOTES
1 Review by auditors
The reviewed condensed consolidated preliminary financial statements of Rex Trueform
for the year ended 30 June 2014 have been reviewed by the company's auditors, KPMG Inc.
In their review report dated 8 September 2014, 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 financial information, and have expressed an
unmodified conclusion on the reviewed condensed consolidated preliminary financial
statements.
2 Basis of preparation
The reviewed 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 Practices 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 2013, except
for the adoption of new standards and interpretations effective as of 1 July 2013.
The new standards have no impact on the reviewed condensed consolidated preliminary
financial statements and are not expected to impact the annual consolidated financial
statements.
The integrated annual report containing a detailed review of the operations of the
company will be posted to shareholders towards the end of September 2014. The annual
financial statements will be posted on the company's website www.rextrueform.co.za at
the end of September 2014.
COMMENTARY
Group results
The group had a challenging year. The group's revenue increased by 3.6% to
R501.2 million (2013: R484.0 million). The gross profit which is generated from the
retail segment decreased marginally by 0.4% to R242.3 million (2013: R243.3 million).
Other income, which includes rental income, increased from R3.1 million to
R5.6 million. Trading expenditure reduced by 0.1%, positively impacted by business
initiatives introduced. The above resulted in the operating loss decreasing by 9.6%
to R17.3 million (2013: loss of R19.1 million).
As a result of the capital costs incurred during the year the cash on hand reduced
substantially which negatively impacted on the interest earned. The after-tax loss
increased by 5.6% to R10.03 million (2013: R9.5 million). The basic loss per ordinary
share increased by 5.4%, whereas the headline loss per ordinary share reduced by
13.5% from 47.4 cents to 41 cents.
Retail
The retail segment reflected a modest increase in the turnover of 3.7%, but the gross
profit margin reduced to 49.2% compared to 51.3% in 2013 as a result of extreme
competitive pressure.
This segment managed to contain costs which were mainly influenced by the reduction in
employments costs during the year. Included in the trading expenditure is a once-off
impairment cost to the amount of R3.4 million relating to the likely closure of
unprofitable stores in the 2015 financial year. Four new stores were opened during the
year in outlying areas which were previously not serviced by the business.
The above resulted in a reduction in the segment operating loss from R14.8 million in
2013 to R14 million for the period, an improvement of 4.8%. The segment operating
loss excluding the once-off impairment (noted above) amounts to R10.6 million.
Property
The property segment revenue showed an improvement during the year, increasing to
R8.1 million from R5.5 million in 2013. The operating profit in the current year was
negatively impacted by once-off costs relating to the negotiation of leases which
were finalised towards the end of the financial year. The segment operating profit
amounted to R0.02 million compared to a loss of R0.2 million in 2013.
The main focus of this segment has been the development of the Rex Trueform Office Park
("RTOP") in Salt River of which the core construction activities were mostly completed
by June 2014. As at June 2014 leases for a substantial portion of the premises had
been concluded.
Prospects
Retail segment
The group has plans to roll out further stores to capture new markets and improve
returns. Initiatives introduced will improve the gross margin, which has been evidenced
by the first nine weeks of the new trading year. The planned closure of the impaired
unprofitable stores, and further cost management initiatives, will also add to the
improved performance of the segment.
Another initiative to positively impact the business will be the implementation of the
enterprise resource planning ("ERP") software in the 2015 financial year. The benefits
to be gained therefrom will commence in the 2015 financial year, however the major
benefits will be realised in the years thereafter.
The business is looking to increase its footprint in Africa in the medium to long term
and has recently opened its first franchise store in Kenya.
The segment is expected to perform better going forward and the objective is to return
the segment to profitability in the 2015 financial year.
Property segment
The value of the group's property portfolio will increase in the future in light of
the fact that the RTOP development will be completed during the 2015 financial year.
The group holds other properties which have future development potential.
The RTOP is located in a vibrant area within Salt River (Cape Town) and provides
approximately 11 700 square metres of office space. As at June 2014 agreements had been
entered into to let approximately 90% of the office space, inclusive of space let to
Queenspark. The remaining unlet office space is expected to be let during the 2015
financial year. Management is pleased with the progress made on the project.
The group is to prepare development feasibilities during the forthcoming year in
respect of other properties owned by the group.
Dividend
The board is not proposing dividends in respect of the ordinary and "N" ordinary shares
in the 2014 financial year.
Directors: ML Krawitz+ (Chairman), CEA Radowsky (Chief Executive Officer),
DS Johnson, PE Shub, PM Naylor*, RV Orlin* and M Segal*
+ Non-executive *Independent Non-executive
We note the passing of RW Rees on 11 June 2014. M Segal was appointed as an independent
non-executive director on 2 September 2014.
Registered office: Rex Buildings, 263 Victoria Road, Salt River, Cape Town, 7925
Secretary: AT Snitcher
Transfer secretaries: Computershare Investor Services Proprietary Limited
70 Marshall Street, Johannesburg, 2001
Sponsor: Java Capital
Websites: www.queenspark.com - www.rextrueform.com
Date: 08/09/2014 04:03:00 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.
Sharenet Sites 
