Wrap Text
Unaudited interim condensed consolidated group results for the six months ended 31 December 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")
UNAUDITED INTERIM CONDENSED CONSOLIDATED GROUP RESULTS
for the six months ended 31 December 2014
HIGHLIGHTS
Revenue increased by 4.2% to R276.6 million (31 December 2013: R265.4 million)
Operating profit increased by 412.7% to R15.9 million
(31 December 2013: loss of R5.1 million)
Gross profit margin % increased to 54.8% (31 December 2013: 47%)
Headline earnings per share increased by 378% to 44.2 cents
(31 December 2013: loss of 15.9 cents)
Earnings per share increased by 608.5% to 60 cents
(31 December 2013: loss of 11.8 cents)
Net asset value per share increased by 1.9% to 1 211 cents
(31 December 2013: 1 189 cents)
No ordinary dividend per share was paid for the year ended 30 June 2014
(A dividend of 61 cents for the year ended June 2013 was paid in December 2013)
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at As at As at
31 December 31 December 30 June
2014 2013 2014
Unaudited Unaudited Audited
R'000 R'000 R'000
ASSETS
Non-current assets 148 689 135 549 142 159
Property, plant and equipment 118 207 108 819 108 762
Investment property 3 510 5 496 5 440
Intangible assets 16 039 9 263 13 920
Other investments 524 524 524
Deferred tax asset 10 409 11 447 13 513
Current assets 162 306 161 134 151 717
Inventories 68 334 77 039 82 124
Amounts receivable from holding company 52 48 43
Trade and other receivables 24 635 13 914 13 671
Forward exchange contracts 1 498 2 534 -
Income tax receivable 264 1 374 215
Cash and cash equivalents 67 523 66 225 55 664
Total assets 310 995 296 683 293 876
EQUITY AND LIABILITIES
Capital and reserves 249 654 244 790 237 313
Share capital 1 777 1 777 1 777
Share premium 25 836 25 836 25 836
Treasury shares (1 133) (1 190) (1 133)
Other reserves 1 081 988 1 081
Retained earnings 222 093 217 379 209 752
Non-current liabilities 19 157 16 639 15 110
Post-retirement liability 2 001 2 126 1 988
Accrued operating lease liability 15 533 12 608 12 833
Deferred tax liability 1 623 1 905 289
Current liabilities 42 184 35 254 41 453
Provisions - - -
Trade and other payables 42 152 35 147 40 436
Forward exchange contracts - - 927
Income tax payable 32 107 90
Total equity and liabilities 310 995 296 683 293 876
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Six months Six months Year
ended ended ended
31 December 31 December 30 June
2014 2013 2014
% Unaudited Unaudited Audited
change R'000 R'000 R'000
Revenue 4.2 276 578 265 360 501 207
Turnover 2.9 268 660 261 138 492 079
Cost of sales (121 537) (138 432) (249 774)
Gross profit 19.9 147 123 122 706 242 305
Other income 10 505 2 368 5 585
Other operating costs (141 735) (130 157) (265 192)
Operating profit/(loss) 15 893 (5 083) (17 302)
Dividend income 18 16 16
Finance income 1 259 1 838 3 527
Finance costs (98) (111) (201)
Profit/(loss) before tax 17 072 (3 340) (13 960)
Income tax expense (4 723) 927 3 929
Profit/(loss) for the period 12 349 (2 413) (10 031)
Other comprehensive income
Actuarial gains on post-retirement defined
benefit plan - - 93
Total comprehensive income/(loss) for
the period 12 349 (2 413) (9 938)
Profit/(loss) attributable to:
Ordinary and 'N' ordinary shareholders 12 341 (2 421) (10 048)
Preference shareholders 8 8 17
Profit/(loss) for the period 12 349 (2 413) (10 031)
Total comprehensive income attributable to:
Ordinary and 'N' ordinary shareholders 12 341 (2 421) (9 955)
Preference shareholders 8 8 17
Total comprehensive income for the year 12 349 (2 413) (9 938)
Reconciliation of headline earnings/(loss)
Profit/(loss) attributable to equity holders 12 341 (2 421) (10 048)
Adjusted for:
Profit from disposal of property, plant and
equipment and investment property (3 236) (860) (826)
Impairment loss on equipment and shopfittings - - 2 447
Headline earnings/(loss) 9 105 (3 281) (8 427)
Basic earnings/(loss) per ordinary share (cents) 60.0 (11.8) (48.8)
Headline earnings/(loss) per ordinary share (cents) 44.2 (15.9) (41.0)
Diluted basic earnings/(loss) per ordinary share (cents) 59.9 (11.8) (48.8)
Diluted headline earnings/(loss) per ordinary
share (cents) 44.2 (15.9) (40.9)
Weighted average number of equity shares on which
earnings per share is based (000's) 20 582 20 574 20 574
Weighted average number of equity shares on which
diluted earnings per share is based (000's) 20 613 20 601 20 603
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Six months Six months Year
ended ended ended
31 December 31 December 30 June
2014 2013 2014
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 (1 133) (1 190) (1 190)
Proceeds from delivery of employee share options - - 57
Closing balance (1 133) (1 190) (1 133)
Other reserves
Opening balance 1 081 980 980
Share-based payment expense - 8 8
Actuarial gains on post-retirement defined
benefit plans - - 93
Closing balance 1 081 988 1 081
Retained earnings
Opening balance 209 752 232 350 232 350
Profit/(loss) for the period 12 349 (2 413) (10 031)
Preference dividends paid (8) (8) (17)
Ordinary dividends paid - (12 550) (12 550)
Closing balance 222 093 217 379 209 752
Total capital and reserves 249 654 244 790 237 313
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW
Six months Six months Year
ended ended ended
31 December 31 December 30 June
2014 2013 2014
Unaudited Unaudited Audited
R'000 R'000 R'000
Operating profit/(loss) before working
capital changes 23 849 (1 042) 3 091
Working capital changes* 9 406 7 743 9 137
Interest income 1 259 1 838 3 527
Interest expense (98) (111) (201)
Dividends paid - (12 550) (12 567)
Dividends received 18 16 16
Income tax (paid)/refunded (392) 274 736
Net cash inflows/(outflows) from operating
activities 34 042 (3 832) 3 739
Additions to property, plant and equipment (20 321) (28 119) (42 704)
Additions to intangible assets (2 295) (1 506) (5 170)
Proceeds from disposal of property, plant
and equipment 433 - 60
Proceeds from disposal of trademark - 1 000 1 000
Net cash outflows from investing activities (22 183) (28 625) (46 814)
Proceeds from delivery of shares by share trust - - 57
Net cash inflows from financing activities - - 57
Net increase/(decrease) in cash and cash equivalents 11 859 (32 457) (43 018)
Cash and cash equivalents at the beginning
of the period 55 664 98 682 98 682
Cash and cash equivalents at the end of the period 67 523 66 225 55 664
* Included in working capital changes is the outstanding amount receivable in respect
of the sale of the property.
GROUP SEGMENTAL REPORTING
Six months Six months Year
ended ended ended
31 December 31 December 30 June
2014 2013 2014
Unaudited Unaudited Audited
R'000 R'000 R'000
Revenue
Total external retail revenue 269 884 262 087 493 759
Retail segment revenue 272 994 263 922 497 405
Intersegment revenue earned (3 110) (1 835) (3 646)
Total external property revenue 5 417 1 419 3 905
Property segment revenue 7 585 3 540 8 146
Intersegment revenue earned (2 168) (2 121) (4 241)
Dividends received 18 16 16
Interest income 1 259 1 838 3 527
Total group revenue 276 578 265 360 501 207
Segment operating profit/(loss)
Retail segment profit/(loss) 13 912 (3 772) (14 046)
Property segment profit/(loss) 4 479 (169) 22
Group services operating loss (2 498) (1 142) (3 278)
Total group operating profit/(loss) 15 893 (5 083) (17 302)
Depreciation and amortisation
Retail 9 619 9 001 22 151
Property 1 251 238 751
Total group depreciation and amortisation 10 870 9 239 22 902
Segment assets
Retail 220 345 212 506 203 295
Property 78 001 49 382 60 622
Group services* 12 649 34 795 29 959
Total group segment assets 310 995 296 683 293 876
Segment liabilities
Retail 54 556 45 373 49 908
Property 4 039 3 634 3 373
Group services* 2 746 2 886 3 282
Total group segment liabilities 61 341 51 893 56 563
Capital expenditure
Retail 8 552 12 783 19 718
Property 14 064 16 842 28 156
Total group capital expenditure 22 616 29 625 47 874
* Group services include corporate costs.
OTHER INFORMATION
Six months Six months Year
ended ended ended
31 December 31 December 30 June
2014 2013 2014
Unaudited Unaudited Audited
Capital commitments
Authorised - not contracted for (R'000) 16 929 21 808 36 362
Authorised - contracted for (R'000) 18 193 8 613 11 989
Gross profit margin (%) 54.8 47.0 49.2
Operating profit/(loss) margin (%) 5.9 (1.9) (3.5)
Retail segment operating profit/(loss) margin (%) 5.2 (1.4) (2.8)
Net asset value (R) 12.11 11.89 11.52
NOTES
1 Basis of presentation of financial statements
These unaudited condensed consolidated interim financial statements for the six months
ended 31 December 2014 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, the 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 2014.
2 Unaudited results
These results have not been reviewed or reported on by the group's auditors. The
unaudited condensed consolidated interim financial statements have been prepared
under the supervision of Damian Johnson CA(SA) and were approved by the board of
directors on 10 March 2015.
3 Preference dividend
A dividend on the 6% cumulative preference shares for the six months ended
31 December 2014 in the amount of R8 400 was declared by the board of directors on
15 December 2014 and paid on 12 January 2015.
COMMENTARY
GROUP RESULTS
The group had a pleasing first half performance mainly due to the performance of
the retail segment. The group's revenue increased by 4.2% to R276.6 million
(2013: R265.4 million). The gross profit increased to R147.1 million
(2013: R122.7 million). Other income, which includes rental income, increased
from R2.4 million to R10.5 million. Operating costs increased by 8.9% during the
period and were negatively impacted by additional depreciation on properties and
once-off operating costs.
The above resulted in the group returning to profitability. The operating profit
amounted to R15.9 million (2013: loss of R5.1 million) and included an amount of
R3.9 million in respect of the profit on sale of the Atlantis property. The group's
operating profit excluding the profit on sale of the property amounts to R12.0 million.
The group's profit (after tax) for the period amounts to R12.3 million
(2013: loss of R2.4 million), resulting in a basic earnings per share of 60 cents
(2013: loss of 11.8 cents). Headline earnings amounted to R9.1 million, resulting in
headline earnings per share of 44.2 cents (2013: loss of 15.9 cents).
RETAIL
The retail segment reflected a modest increase in the turnover of 2.9% and was impacted
by the closure of three unprofitable stores and the opening of two new stores. Due to
the introduction of certain initiatives the gross profit margin increased to 54.8%
compared to 47% in 2013, resulting in a 19.9% increase in gross profit. The segment's
operating costs increased by 5.7% as this segment continues to focus on cost
containment.
The above resulted in a segment operating profit of R13.9 million (2013: loss of
R3.8 million).
PROPERTY
The main focus of this segment has been the development of the Rex Trueform Office Park
("RTOP") in Salt River which is near completion.
The property segment revenue showed an improvement during the year, increasing to
R7.6 million from R3.5 million in 2013 mainly due to the additional rental income
received from the RTOP.
The operating profit of this segment amounted to R4.5 million and was negatively
impacted by once-off operating costs of R1.5 million and positively impacted by the
profit on the sale of the Atlantis property to the amount of R3.9 million.
PROSPECTS
Retail segment
Retail sales in the second half of the year are traditionally lower than the first half.
This, together with electricity loadshedding and increased competition, is expected
to constrain profit growth during the six months ending June 2015.
In order to grow turnover in the 2016 year and beyond the company is to introduce
initiatives to increase the turnover of the existing store base, and increase the
Queenspark footprint within South Africa by the roll-out of further stores.
The implementation of the enterprise resource planning ("ERP") software, once complete,
will also provide future benefits to the business.
Property segment
The RTOP is located in a vibrant area within Salt River (Cape Town). In close proximity
to this building are two other group-owned properties, which have development potential.
Feasibilities in respect of these properties are to be prepared in due course. The one
property is classified as an important Heritage site, which limits the development
opportunities, and will cause a delay in the development process.
Signed on behalf of the board
ML Krawitz CEA Radowsky
(Chairman) (Chief Executive Officer)
Cape Town
10 March 2015
Directors: ML Krawitz+ (Chairman), CEA Radowsky (Chief Executive Officer),
DS Johnson (FD), PE Shub+, PM Naylor*, RV Orlin* and HJ Borkum*
+ Non-executive *Independent non-executive
M Segal resigned as an independent non-executive director on 24 November 2014 and
HJ Borkum was appointed as an independent non-executive director in his stead on
12 January 2015. PE Shub ceased to be an executive director with effect from
1 March 2015, but will remain on the board of directors as a non-executive director.
Registered office: Rex Buildings, 263 Victoria Road, Salt River, Cape Town, 7925
Secretary: AT Snitcher
Transfer secretaries: Computershare Investor Services (Pty) Ltd, 70 Marshall Street,
Johannesburg, 2001
Sponsor: Java Capital
Date: 10/03/2015 03:20:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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