Wrap Text
Preliminary report on the audited group annual results for the 52 weeks ended 28 June 2015
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 28 JUNE 2015
HIGHLIGHTS
Sale of merchandise up 8%
Gross margin at 55.2%
Operating margin at 30.5%
Headline earnings per share up 3%
Fully diluted headline earnings per share up 4%
Annual dividend per share up 5%
GROUP PROFILE
Truworths International Ltd (the company) 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 (YDE), are engaged
either directly or through subsidiaries, agencies, or franchises, in the retailing
of fashion clothing and footwear apparel and related merchandise. The company and
its subsidiaries (the Group) operate primarily in South Africa, and have an emerging
presence in other sub-Saharan African countries.
TRADING AND FINANCIAL PERFORMANCE
Group retail sales for the 52-week period ended 28 June 2015 (the period) increased
by 8.2% to R11.6 billion compared to the 52-week prior reporting period
(the prior period), with cash sales growth of 9.4% and credit sales growth of 7.7%.
Retail sales in the second half of the period increased by 12.0% compared to the first
half increase of 5.2%. Excluding the retail sales reported by the recently acquired
Earthchild and Naartjie businesses (the acquisitions), Group retail sales for the
period increased by 7.2% to R11.5 billion, comprising a second half increase of 9.8%
and a first half increase of 5.2%. Credit sales accounted for 70% of retail sales
during the period (2014: 71%) and increased by 10.6% in the second half after
increasing by 5.4% in the first half.
Comparable store retail sales for the period increased by 1.3%. Second half
comparable sales recorded positive growth of 4.2% against a reduction of 0.8% in the
first half.
Group sale of merchandise, which comprises Group retail and franchise sales less
accounting adjustments, grew by 8.0% and product inflation averaged 6% (2014: 9%) for
the period.
Trading space increased by 7.7% (6.1% excluding space attributable to the acquisitions)
as the Group added a net 106 new locations to the store network. This follows the
opening of 57 stores, the addition of 62 stores through the acquisitions, and the
closure of 13 stores. Outside of South Africa the Group now has 44 stores (2014: 38)
as four stores were added in Namibia (including one Earthchild and one Earthaddict)
and two stores each in Ghana and Zambia, while two stores were closed in Nigeria.
Divisional sales 28 June 29 June % change
2015 2014 on prior
Rm Rm period
Truworths ladieswear 4 387 4 258 3
Truworths menswear 2 386 2 168 10
Identity 1 951 1 719 13
Truworths designer emporium* 1 464 1 417 3
Truworths kids emporium** 457 289 58
Other*** 999 911 10
Group retail sales 11 644 10 762 8
Franchise sales 9 8 13
Accounting adjustments (363) (312) 16
Sale of merchandise 11 290 10 458 8
YDE agency sales 297 305 (3)
* Daniel Hechter, LTD and Earthaddict.
** LTD Kids, Earthchild and Naartjie.
*** Cellular, Truworths Jewellery and Cosmetics.
The Group's gross margin decreased to 55.2% (2014: 55.9%) as a result of increased
sales promotion activity resulting in higher markdowns, although the margin remains
within the Group's target range of 54% to 57%. Trading expenses increased 12.2% to
R4.1 billion (2014: R3.7 billion), mainly as a result of a 15.8% increase in employment
costs and a 15.5% increase in occupancy costs. Utility costs increased by 17% and is
12.5% of total occupancy costs (2014: 12.4%). Included in the other operating costs
is R5 million of foreign exchange gains (2014: R36 million loss), resulting from
mark-to-market adjustments on forward exchange contracts as well as revaluations of
inter-company loans to certain non-South African subsidiaries. Trading expenses as a
percentage of sale of merchandise increased to 36.5% (2014: 35.1%) and interest
received increased 15.9% to R1.1 billion (2014: R917 million).
Operating profit (profit before finance costs and tax) increased by 2.6% to R3.4 billion,
and the operating margin declined to 30.5% from 32.1% owing to the reduction in the
gross margin and the increase in trading expenses.
Excluding the inventory of Earthchild and Naartjie, strategic fabric held and work in
progress, gross inventory increased 15.5%. The Group's net inventory increased by 24.4%
to R1.1 billion at the end of the period, leading to a reduction in inventory turn from
5.3 times in the prior period to 4.7 times.
Headline earnings per share (HEPS) increased by 3% to 593.8 cents (2014: 576.8 cents)
and fully diluted HEPS increased 4% to 592.1 cents (2014: 569.3 cents). A final
dividend of 169 cents per share has been declared, bringing the total dividend for the
period to 405 cents, an increase of 5.2% over the prior period. Dividend cover has been
maintained at 1.5 times.
Net asset value per share increased by 11.6% to 1 790.9 cents from the prior period's
1 605.1 cents. The return on equity and the return on assets, while outside of
management's target range, were high at 35% (2014: 37%) and 38% (2014: 42%)
respectively. Asset turnover reduced to 1.2 times (2014: 1.3 times).
CREDIT MANAGEMENT
Gross trade receivables at R5.2 billion increased by 10.8% as a result of the increase
in credit sales, and a continuing shift from the six months interest-free plan to the
longer-term interest-bearing payment plans. Both the percentage of active account
holders able to purchase and the percentage of delinquent accounts remained unchanged
at 83% and 14% of trade receivables respectively. New account acceptance rates
have increased to 30% (2014: 26%) and the Group's active account base has grown by 3%
to 2.7 million.
Trade receivable costs increased by 4.8% to R960 million against the R916 million in
the prior period. Net bad debt to trade receivables improved to 12.5% (2014: 12.9%) and
net bad debt to credit sales improved to 7.9% (2014: 8.0%). The doubtful debt allowance
to trade receivables has been maintained at 12.5% (2014: 12.5%) and down from 13.0%
disclosed in the interim results of December 2014. It is encouraging to note that,
for the first time since the period ended June 2012, interest earned on trade receivables
(including notional interest) of R969 million exceeds net bad debt and associated costs
of R960 million.
CAPITAL MANAGEMENT
At the end of the period the Group had cash and cash equivalents of R1.5 billion
(2014: R1.6 billion). Cash of R2.1 billion was generated through operations and this
was utilised to fund dividend payments of R1.7 billion, capital expenditure of
R380 million and acquisitions of R270 million.
ACQUISITIONS
As previously advised to shareholders, the Competition Commission granted approval
for the Group to acquire 100% of the Earthchild Clothing (Waterfront) (Pty) Ltd shares
and to acquire the SA Naartjie business as a going concern, together with certain
trademarks from their owners. These businesses were incorporated into the Group with
effect from 1 March 2015 (Earthchild) and 1 April 2015 (Naartjie), and now function
as divisions of Truworths Ltd.
DIRECTORATE
The board has resolved to appoint Jean-Christophe Garbino, CEO designate, as an executive
director of the company with effect from 21 August 2015.
At the request of the board, Michael Mark will remain as CEO on a month to month basis
until the transition period has been suitably completed.
OUTLOOK
Management feels that the credit environment is steadily improving despite the current
tough economic environment, and are optimistic that the Group's merchandise ranges for
the upcoming summer season are appealing to customers. The Group's business model
has withstood the downturn in the credit cycle well.
Retail sales (excluding Earthchild and Naartjie) for the first seven weeks of the
2016 financial period reflect an encouraging increase of 15% over the corresponding
seven weeks in the prior period. This increase has been underpinned by very good sales
growth on current season merchandise with gross profit increasing 18%, whilst markdowns
on prior season merchandise have decreased by 0.2% over the corresponding seven-week period.
Capital expenditure of R767 million has been committed for the 2016 financial period.
Product inflation is anticipated to average between 8% and 10% in the 2016 financial period
and trading space is planned to grow by approximately 4% (including Earthchild and Naartjie).
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 28 June 2015 in the amount
of 169 South African cents (2014: 169 cents) per ordinary share to shareholders
reflected in the company's register on the record date, being Friday, 11 September 2015.
The last day to trade in the company's shares cum dividend is Friday, 4 September 2015.
Consequently no dematerialisation or rematerialisation of the company's shares may
take place over the period from Monday, 7 September 2015 to Friday, 11 September 2015,
both days inclusive. Trading in the company's shares ex dividend will commence on
Monday, 7 September 2015. The dividend is scheduled to be payable in South African
currency (ZAR) on Monday, 14 September 2015.
Dividends will be paid net of dividends tax of 15%, to be withheld and paid 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 withholding tax, if applicable at the rate of 15%, will result in a net cash
dividend per share of 143.65 cents. The company has 429 327 350 ordinary shares in issue
on 20 August 2015.
In accordance with the company's memorandum of incorporation:
- the dividend will only be paid by electronic funds transfer, and no cheque payments
will be made. Accordingly, shareholders who have not yet provided their bank account
details should do so to 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
20 August 2015
SUMMARISED GROUP STATEMENTS OF FINANCIAL POSITION
Note at 28 June at 29 June
2015 2014
Audited Audited
Rm Rm
ASSETS
Non-current assets 1 876 1 360
Property, plant and equipment 1 053 934
Goodwill 346 90
Intangible assets 217 106
Derivative financial assets - 6
Available-for-sale assets 19 9
Loans and receivables 82 99
Deferred tax 159 116
Current assets 7 281 6 716
Inventories 1 074 863
Trade and other receivables 4 637 4 182
Derivative financial assets 13 5
Prepayments 95 78
Cash and cash equivalents 1 462 1 588
Total assets 9 157 8 076
EQUITY AND LIABILITIES
Total equity 7 504 6 642
Share capital and premium 551 368
Treasury shares (770) (652)
Retained earnings 7 533 6 774
Non-distributable reserves 190 152
Non-current liabilities 192 88
Post-retirement medical benefit obligation 57 51
Leave pay obligation 4 3
Cash-settled compensation obligation - 4
Straight-line operating lease obligation 36 30
Contingent consideration obligation 6.1 95 -
Current liabilities 1 461 1 346
Trade and other payables 1 302 1 134
Provisions 54 47
Derivative financial liability - 8
Tax payable 105 157
Total liabilities 1 653 1 434
Total equity and liabilities 9 157 8 076
Number of shares in issue
(net of treasury shares) (millions) 419.0 413.8
Net asset value per share (cents) 1 790.9 1 605.1
Key ratios
Return on equity (%) 35 37
Return on capital (%) 49 52
Return on assets (%) 38 42
Inventory turn (times) 4.7 5.3
Asset turnover (times) 1.2 1.3
SUMMARISED GROUP STATEMENTS OF COMPREHENSIVE INCOME
Note 52 weeks 52 weeks
to 28 June to 29 June
2015 2014
Audited % Audited
Rm change Rm
Revenue 4 12 619 8 11 642
Sale of merchandise 11 290 8 10 458
Cost of sales (5 060) (4 617)
Gross profit 6 230 7 5 841
Other income 4 259 235
Trading expenses (4 116) 12 (3 668)
Depreciation and amortisation (221) (184)
Employment costs (1 186) (1 024)
Occupancy costs (1 102) (954)
Trade receivable costs (960) (916)
Other operating costs (647) (590)
Trading profit 2 373 (1) 2 408
Interest received 4 1 063 917
Dividends received 4 7 32
Profit before finance costs and tax 3 443 3 3 357
Finance costs (6) -
Profit before tax 3 437 2 3 357
Tax expense (977) (951)
Profit for the period, fully attributable
to shareholders of the company 2 460 2 2 406
Other comprehensive income to be reclassified
to profit or loss in subsequent periods 10 (3)
Fair value adjustment on available-for-sale
financial instruments 1 1
Movement in effective cash flow hedge 1 (2)
Deferred tax on movement in effective cash flow hedge - (2)
Movement in foreign currency translation reserve 8 -
Other comprehensive income not to be reclassified
to profit or loss in subsequent periods (1) 3
Re-measurement (losses)/gains on defined benefit plans (1) 3
Other comprehensive income for the period,
net of tax 9 -
Total comprehensive income for the period, fully
attributable to shareholders of the company 2 469 2 406
Basic earnings per share (cents) 591.2 3 575.9
Headline earnings per share (cents) 5 593.8 3 576.8
Fully diluted basic earnings per share (cents) 589.5 4 568.4
Fully diluted headline earnings per share (cents) 592.1 4 569.3
Weighted average number of shares (millions) 416.1 417.8
Fully diluted weighted average number of
shares (millions) 417.3 423.3
Key ratios
Gross margin (%) 55.2 55.9
Trading expenses to sale of merchandise (%) 36.5 35.1
Trading margin (%) 21.0 23.0
Operating margin (%) 30.5 32.1
SUMMARISED 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
2015
Balance at the beginning of
the period 368 (652) 6 774 152 6 642
Profit and total comprehensive
income for the period - - 2 459 10 2 469
Profit for the period - - 2 460 - 2 460
Other comprehensive income
for the period - - (1) 10 9
Dividends - - (1 700) - (1 700)
Premium on shares issued 65 - - - 65
Premium on shares issued
in terms of the restricted
share scheme 118 (118) - - -
Share-based payments - - - 28 28
Balance at 28 June 2015 551 (770) 7 533 190 7 504
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) - -
Premium on 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
Dividends (cents per share): 2015 2014
Final - payable/paid September 169 169
Interim - paid March 236 216
Total 405 385
SUMMARISED GROUP STATEMENTS OF CASH FLOWS
52 weeks 52 weeks
to 28 June to 29 June
2015 2014
Audited Audited
Rm Rm
CASH FLOWS FROM OPERATING ACTIVITIES
Cash flow from trading and cash EBITDA* 2 654 2 682
Working capital movements (476) (105)
Cash generated from operations 2 178 2 577
Interest received 1 063 917
Dividends received 7 32
Finance costs (4) -
Tax paid (1 099) (984)
Cash inflow from operations 2 145 2 542
Dividends paid (1 698) (1 566)
Net cash from operating activities 447 976
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property, plant and equipment to expand operations (266) (221)
Acquisition of plant and equipment to maintain operations (61) (54)
Acquisition of computer software (53) (14)
Proceeds on disposal of plant and equipment 1 2
Net acquisition of businesses (270) -
Premiums paid to insurance cell (12) -
Loans repaid 19 21
Acquisition of mutual fund units (2) (1)
Net cash used in investing activities (644) (267)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds on shares issued 65 44
Shares repurchased by subsidiaries - (490)
Contributions to post-retirement medical benefit plan asset (2) -
Net cash used in financing activities 63 (446)
Net (decrease)/increase in cash and cash equivalents (134) 263
Cash and cash equivalents at the beginning of the reporting date 1 588 1 325
Net foreign exchange difference 8 -
CASH AND CASH EQUIVALENTS AT THE REPORTING DATE 1 462 1 588
Key ratios
Cash flow per share (cents) 515.5 608.4
Cash equivalent earnings per share (cents) 642.9 634.8
Cash realisation rate (%) 80 96
* Earnings before interest received, finance costs, tax, depreciation and amortisation.
SELECTED EXPLANATORY NOTES
1 STATEMENT OF COMPLIANCE
The information in these summarised financial statements have been extracted from the
Group's 2015 annual financial statements. The summarised financial statements have 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.
This preliminary report has been prepared under the supervision of DB Pfaff CA(SA),
the Chief Financial Officer of the Group.
The Group's 2015 annual financial statements and the summarised annual financial
statements have been audited by the Group's external auditors, Ernst & Young Inc.,
and their unqualified audit opinion on both the annual financial statements and
summarised annual financial statements is available for inspection at the
company's registered office.
The audit report on these summarised financial statements does not necessarily report
on all of the information contained in these summarised financial statements.
Shareholders are therefore advised that in order to obtain a full understanding of the
nature of the auditor's engagement they should obtain a copy of the auditor's report
on the preliminary report.
2 BASIS OF PREPARATION
The annual financial statements for the period ended 28 June 2015 are prepared in
accordance with the going concern and historical cost bases, except where otherwise
indicated. The accounting policies are applied consistently throughout the Group.
The presentation and functional currency used in the preparation of the Group and
company financial statements is the South African Rand [ZAR] (Rand) and all amounts
are rounded to the nearest million, except where otherwise indicated.
3 ACCOUNTING POLICIES
The accounting policies and methods of computation applied in the preparation of
the Group's 2015 annual financial statements are in terms of IFRS and consistent with
those applied in the preparation of the Group's annual financial statements for the
period ended 29 June 2014, except for the changes resulting from the adoption of the
new and amended statements that came into force during the period as described below:
IFRS 3: Business Combinations
The amendment is applied prospectively and clarifies that all contingent consideration
arrangements classified as liabilities (or assets) arising from a business combination
should be subsequently measured at fair value through profit or loss whether or not
they fall within the scope of IFRS 9 (or IAS 39, as applicable).
The amendment has resulted in the contingent consideration liability that arose as
a result of the Earthchild acquisition in the current period being classified at fair
value through profit or loss.
Other IFRS, amendments and International Financial Reporting Interpretations Committee
(IFRIC) interpretations
Various new and amended IFRS and IFRIC have been issued and are effective, however,
they are not applicable to the Group's activities.
52 weeks 52 weeks
to 28 June to 29 June
2015 2014
Audited % Audited
Rm change Rm
4 REVENUE
Sale of merchandise 11 290 8 10 458
Retail sales 11 644 10 762
Accounting adjustments* (363) (312)
Franchise sales 9 8
Interest received 1 063 16 917
Trade receivables interest 969 828
Investment interest 94 89
Other income 259 10 235
Commission 119 118
Display fees 61 53
Financial services income 61 50
Lease rental income 7 7
Insurance recoveries 6 3
Other 3 3
Royalties 2 1
Dividends received 7 (78) 32
Dividends received from insurance
business arrangements 7 3
Dividends received from dissolution of an
insurance cell captive - 29
Total revenue 12 619 8 11 642
* 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.
5 RECONCILIATION OF PROFIT FOR THE PERIOD
TO HEADLINE EARNINGS
Profit for the period, fully attributable to
shareholders of the company 2 460 2 406
Adjusted for:
Loss on disposal of plant and equipment 6 4
Impairment of insurance cell captive 5 -
Headline earnings 2 471 3 2 410
6 BUSINESS COMBINATIONS
6.1 Acquisition of Earthchild Clothing (Waterfront) (Pty) Ltd
With effect from 1 March 2015 the company acquired 100% of the share
capital of Earthchild Clothing (Waterfront) Pty Ltd (Earthchild) and, therefore,
gained control over Earthchild and its wholly-owned subsidiary Earthchild
Clothing (Namibia) (Pty) Ltd. Earthchild specialises in the retail sale of
upper-end kids' and women's apparel.
The purchase consideration payable at the acquisition date was R330 million of
which R226 million was payable immediately (cash consideration) and the remaining
balance of R104 million will be payable during the 2017 (R42 million) and 2018
(R62 million) reporting periods (contingent consideration).
The fair value of the contingent consideration obligation at the acquisition
date was determined using the discounted cash flow method.
The fair value of the purchase consideration at acquisition date was as follows:
Fair value
Rm
Cash consideration 226
Contingent consideration obligation 93
Purchase consideration 319
Contingent consideration obligation at acquisition date 93
Fair value adjustment recognised through profit or loss 2
Contingent consideration obligation at fair value 95
The fair value and carrying amount of the identifiable assets
and liabilities of the Earthchild business, at and immediately
before acquisition date respectively, were as follows:
Plant and equipment 12
Inventories 45
Trade and other receivables 12
Deferred tax asset 2
Cash and cash equivalents (13)
Trade and other payables (35)
Net asset value 23
Trademarks 73
Deferred tax on the fair value adjustment of the trademarks (20)
Total fair value 76
Purchase consideration (319)
Goodwill arising on the acquisition (243)
Trade and other receivables are carried at the gross contractual amount
receivable and there are no contractual cash flows expected not to be recovered.
The goodwill of R243 million arising on the acquisition is attributable to the
Earthchild business' superior store locations, long-term supplier relationships,
good profitability and cash flow generation, and loyal customer base. These
intangible assets were not separately recognised as it was not possible to
measure their fair values reliably.
6.2 Pooling of interest: Truworths Ltd and Earthchild Clothing (Waterfront) (Pty) Ltd
On 28 June 2015 the company's wholly-owned major retailing subsidiary,
Truworths Ltd, acquired the Earthchild business as a going concern from
Earthchild Clothing (Waterfront) (Pty) Ltd at the net asset value on this
effective date. The acquisition was accounted for using the pooling of interest
method. This transaction had no financial impact on the consolidated results of
the Group. From this date Earthchild and Earthaddict have become trading
departments within Truworths Ltd.
6.3 Naartjie
With effect from 1 April 2015 Truworths Ltd acquired the Naartjie business, which
specialises in the retail sale of upper-end kids' apparel, as a going concern
from ZA One (Pty) Ltd and Naartjie Custom Kids, Inc. From this date Naartjie
became a trading department within Truworths Ltd.
The total purchase consideration payable was US$2.7 million of which
US$0.27 million was paid as a deposit on 22 January 2015, and the remaining
US$2.43 million was paid on 31 March 2015. The total purchase consideration
paid was R33 million (calculated at the exchange rate of US$1:R12.23).
The fair value and carrying amount of the identifiable assets and liabilities
of the Naartjie business, at and immediately before acquisition date
respectively, were as follows:
Fair value
Rm
Plant and equipment 5
Intangible assets 1
Inventories 24
Trade and other receivables 3
Cash and cash equivalents 2
Trade and other payables (19)
Net asset value 16
Trademarks 6
Deferred tax on the fair value adjustment of the trademarks (2)
Total fair value 20
Purchase price (33)
Goodwill arising on the acquisition (13)
7 SEGMENT REPORTING
The Group's reportable segments have been identified as the Truworths and 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.
As discussed in note 6.1 to 6.3, Earthchild, Earthaddict and Naartjie are divisions
within the Truworths business unit and are therefore not reported on individually.
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
2015
Total third party revenue 12 489 130 - 12 619
Third party 12 481 130 8 12 619
Inter-segment 8 - (8) -
Depreciation and amortisation 217 4 - 221
Employment costs 1 180 14 (8) 1 186
Occupancy costs 1 064 38 - 1 102
Trade receivable costs 960 - - 960
Other costs 710 16 (79) 647
Interest received 1 078 3 (18) 1 063
Profit for the period 2 404 41 15 2 460
Profit before tax 3 365 57 15 3 437
Tax expense (961) (16) - (977)
Segment assets 12 598 192 (3 633) 9 157
Segment liabilities 1 731 10 (88) 1 653
Capital expenditure 378 2 - 380
Gross margin (%) 55.2 55.2
Trading margin (%) 20.5 42.8 21.0
Operating margin (%) 29.9 45.1 30.5
Inventory turn (times) 4.7 4.7
Credit:cash sales mix (%) 70:30 73:27 70:30
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
Contribution to revenue Contribution to revenue
2015 2015 2014 2014
Third party revenue Rm % Rm %
South Africa 12 141 96.2 11 219 96.4
Namibia 237 1.9 201 1.7
Swaziland 78 0.6 70 0.6
Botswana 75 0.6 63 0.5
Zambia 24 0.2 20 0.2
Ghana 22 0.2 17 0.1
Lesotho 15 0.1 15 0.1
Mauritius 12 0.1 10 0.1
Nigeria 6 0.0 19 0.2
Franchise sales - Kenya 9 0.1 8 0.1
Total third party revenue 12 619 100 11 642 100
28 June 29 June
2015 2014
Audited Audited
Rm Rm
8 CAPITAL COMMITMENTS
Capital expenditure authorised but not contracted
Store renovation and development 322 356
Buildings 170 -
Computer infrastructure 86 65
Distribution facilities 163 17
Head office refurbishment 21 7
Motor vehicles 5 3
Total capital commitments 767 448
The capital commitments will be financed from cash generated from operations and
available cash resources and are expected to be incurred in the 2016 reporting period.
9 EVENTS AFTER THE REPORTING DATE
No events material to the understanding of these financial statements have occurred
between the reporting date and the date of approval.
CORPORATE INFORMATION
TRUWORTHS INTERNATIONAL LTD:
(Incorporated in the Republic of South Africa)
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 Services (Pty) Ltd
SPONSOR IN NAMIBIA:
Old Mutual Investment Services (Namibia) (Pty) Ltd
AUDITORS:
Ernst & Young Inc.
TRANSFER SECRETARIES:
IN SOUTH AFRICA:
Computershare Investor Services (Pty) Ltd,
70 Marshall Street, Johannesburg, 2001, South Africa;
PO Box 61051, Marshalltown, 2107, South Africa
IN NAMIBIA:
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
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