TRUWORTHS INTERNATIONAL LIMITED - Preliminary report on the audited group annual results for the 52 weeks ended 1 July 2018

Release Date: 16/08/2018 15:20
Code(s): TRU
 
Wrap Text
Preliminary report on the audited group annual results for the 52 weeks ended 1 July 2018

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 1 July 2018


KEY FEATURES          
Comparable sale of merchandise#                  down 0.2% to R17.5 billion
Sale of merchandise                                               down 2.9%
Gross margin                                                          52.4%
Operating margin                                                      22.5%
Comparable diluted headline earnings per share#                   down 1.3%
Diluted headline earnings per share                               down 7.3%
Net asset value per share                                          up 10.0%
Cash generated from operations                      up 3.3% to R3.1 billion
Net borrowings repaid                                          R2.2 billion
Net debt to equity                                                     9.3%
Cash realisation rate                                                  109%
Annual dividend per share                            down 7.1% to 420 cents
          
# Relative to the pro forma comparable 52-week prior period (refer to note 15).


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 Office 
Holdings Ltd, are engaged either directly or through subsidiaries, concessions, agencies or 
franchises, in the cash and account retailing of fashion clothing, footwear, related merchandise 
and homeware. The company and its subsidiaries (the Group) operate primarily in South Africa and 
the United Kingdom, and have an emerging presence in Germany, the Republic of Ireland and other 
sub-Saharan African countries.

TRADING AND FINANCIAL PERFORMANCE 
In a tough economic environment in South Africa and in the UK, Group retail sales for the 52-week 
period ended 1 July 2018 (the period) were unchanged at R18.0 billion, compared to the pro forma 
comparable 52-week period (i.e. 4 July 2016 to 2 July 2017) (the comparable prior period*). 
Relative to the 53-week prior reporting period ended 2 July 2017 (the 53-week prior period), 
Group retail sales decreased by 2.7% from R18.5 billion to R18.0 billion. 

Retail sales for the Truworths Africa segment increased by 0.8% relative to the comparable prior 
period*, with cash sales increasing by 2.6% and account sales being unchanged. Relative to the 
53-week prior period, Truworths' retail sales decreased by 2.1% from R13.4 billion to R13.1 billion, 
with cash sales unchanged and account sales decreasing by 3.0%. Account sales comprised 69% 
(2017: 70%) of Truworths' retail sales. Comparable product deflation (i.e. excluding the new Office 
London footwear chain launched in South Africa and Loads of Living acquired during the period) 
averaged 1.4%.

Retail sales for the Group's UK-based Office segment decreased by 2.5% in Pound Sterling relative 
to the comparable prior period*. Relative to the 53-week prior period, Office's retail sales decreased 
by 4.5% from £294 million (R5.1 billion) to £281 million (R4.8 billion). Product inflation averaged 3.6%.

Group sale of merchandise, which comprises Group retail sales, together with wholesale and franchise 
sales and delivery fee income, less accounting adjustments, declined 0.2% relative to the comparable 
prior period*. Relative to the 53-week prior period, Group sale of merchandise decreased by 2.9% 
from R18.1 billion to R17.5 billion. 

A net 32 stores were added across all brands during the period, resulting in an increase in trading 
space of 3.2% (Truworths 3.3% increase and Office 0.9% increase). Loads of Living accounted for 13 
of the new stores. Excluding Loads of Living, trading space increased by 2.1%. At the end of the period 
the Group had 969 stores (including 40 concession outlets) (2017: 937 including 38 concession outlets).

* Refer to note 15 for the pro forma comparable 52-week prior period statement of comprehensive income. 


Divisional sales**
                                                               Change on                  Change on 
                                                Comparable  prior period               prior period
                                  52 weeks to  52 weeks to         52 on  53 weeks to         52 on
                                   1 Jul 2018   2 Jul 2017*     52 weeks   2 Jul 2017      53 weeks
                                           Rm           Rm             %           Rm             %
Truworths ladieswear                    3 753        3 860            (3)       3 988            (6)
Truworths designer emporium‡            1 383        1 396            (1)       1 436            (4)
Total Truworths ladieswear              5 136        5 256            (2)       5 424            (5)
Office                                  4 848        4 980            (3)       5 081            (5)
Truworths menswear~                     3 663        3 656             -        3 759            (3)
Identity                                2 082        2 067             1        2 129            (2)
Truworths kids emporium#                  925          872             6          896             3
Other^                                  1 309        1 159            13        1 183            11
Group retail sales                     17 963       17 990             -       18 472            (3)
Delivery fee income                        51           52            (2)          53            (4)
Wholesale sales                            46           50            (8)          50            (8)
Franchise sales                             5            8           (38)           8           (38)
Accounting adjustments                   (518)        (518)            -         (518)            -
Sale of merchandise                    17 547       17 582             -       18 065            (3)
YDE agency sales                          254          271            (6)         278            (9)
                                                                                
**  The 53 weeks to 2 July 2017 has been restated based on Truworths' new internal department structure. 
    The restatement did not affect total reported retail sales for the said period.
‡   Daniel Hechter Ladies, Ginger Mary, Glamour, LTD Ladies and Earthaddict.
~   Truworths Man, Uzzi, Daniel Hechter Mens and LTD Mens.
#   LTD Kids, Earthchild and Naartjie.
^   Cellular, Truworths Jewellery, Cosmetics, Office London and Loads of Living.


The Group's gross margin was stable at 52.4% (2017: 52.6%). Truworths' gross margin increased to 
55.5% (2017: 55.2%). 

Trading expenses decreased by 1.9% to R7.0 billion (2017: R7.1 billion) and constituted 39.6% 
(2017: 39.2%) of sale of merchandise. Excluding foreign exchange gains in 2018 (R29 million) and 
losses in 2017 (R93 million), trading expenses decreased by 0.1%, reflecting management's continued 
focus on efficiency and cost containment. An increase in occupancy costs (3.9%) was off-set by a 
decrease in trade receivable costs (9.1%), while depreciation and amortisation, employment costs 
and other operating costs (excluding foreign exchange gains and losses) were largely unchanged. 
Refer to Account Management below for further details on trade receivable costs. 

Relative to the comparable prior period* trading profit increased by 2.2% to R2.5 billion. Despite 
the tough South African consumer environment, Truworths' trading profit increased by 9.0% relative 
to the comparable prior period* (2.9% excluding foreign exchange gains and losses). The difficult 
trading conditions affecting retailers in the UK is also evident in the Office segment where trading 
profit has decreased by 32.3% in Pound Sterling relative to the comparable prior period*. 

Interest received decreased 3.9% to R1.4 billion (2017: R1.5 billion), mainly due to decreases 
totalling 50 basis points in the South African repo rate since the beginning of the reporting period 
and a decrease in trade receivables. Operating profit decreased 6.3% to R3.9 billion, while the 
operating margin declined to 22.5% from 23.3% in the 53-week prior period. This decline is 
attributable to the decrease in gross profit, compounded by a relatively smaller decrease in trading 
expenses, as well as a decrease in interest received. Truworths' operating margin decreased to 
29.1% (2017: 29.2%).

Finance costs have decreased by 15.3% to R250 million (2017: R295 million) mainly as a result of 
the settlement of a portion of the Group's long-term borrowings and decreases in the South African 
repo rate referred to above. 

Headline earnings per share (HEPS) and diluted HEPS decreased by 1.0% to 615.7 cents and 1.3% to 
612.7 cents respectively relative to the comparable prior period*. Relative to the 53-week prior 
period, HEPS and diluted HEPS decreased by 7.0% and 7.3% respectively.

A final cash dividend of 159 cents per share has been declared (2017: 182 cents per share), bringing 
the annual dividend to 420 cents per share (2017: 452 cents per share).

* Refer to note 15 for the pro forma comparable 52-week prior period statement of comprehensive income.

FINANCIAL POSITION 
The Group's financial position remains strong, with net asset value per share increasing by 10.0% to 
2 421 cents (2017: 2 201 cents) since the prior period-end.

Inventories increased by 8.1% to R2.1 billion at the end of the period. Gross inventory increased 
8.8% and inventory turn decreased to 4.0 times (2017: 4.5 times). Truworths' gross inventory 
increased 7.1% and inventory turn decreased to 4.8 times (2017: 5.2 times), mainly as a result of 
the timing of the Truworths end-of-season sale, which commenced in the 53rd week of the prior period. 
The inventory of the Office segment increased from £47 million at the prior period-end to £50 million 
mainly due to weaker trading.

Interest-bearing borrowings at the period-end decreased to R1.7 billion from R3.8 billion at the 
prior period-end as a consequence of scheduled and additional loan repayments, as well as a 
restructuring of the funding arrangements in South Africa to achieve an efficient and more 
cost-effective capital structure. The cost benefits of this funding restructure will only be realised 
from the 2019 reporting period onwards. Refer to note 10 for further details.

Included in non-current liabilities is a liability of R389 million (2017: R400 million) in relation 
to put options granted to the non-controlling management shareholders in Office, while derivative 
financial assets of R10 million (2017: R11 million) represent the call options of the Group over the 
shares in question.

Trade and other payables increased 10.2% to R1.8 billion (2017: R1.6 billion), due to the timing 
of capital and operational expenditure.

CASH AND CAPITAL MANAGEMENT 
During the period, the Group generated R3.1 billion in cash from operations and this funded cash 
dividend payments of R1.9 billion, capital expenditure of R485 million and share buy-backs of 
R184 million. In addition, the Group utilised its available cash resources to fund net borrowing 
repayments of R2.2 billion due to scheduled and additional loan repayments, as well as the 
restructuring of its funding arrangements in South Africa. At the end of the period, the Group had 
net cash and cash equivalents of R719 million (2017: R2.1 billion). 

The cash realisation rate, which is a measure of how profits are converted into cash, was 109% for 
the period, compared to 91% in the 53-week prior period. The average cash realisation rate for the 
last five financial years is 93%.

The Group's net debt to equity ratio at the end of the period was 9.3% (2017: 18.3%) and net debt 
to EBITDA was 0.2 times (2017: 0.4 times). 

ACCOUNT MANAGEMENT 
Gross trade receivables in respect of the debtors book (Truworths, Identity and YDE) declined by 3% 
compared to the prior period-end, mainly as a result of the decline in credit sales. Active account 
holders able to purchase at the end of the period increased to 84% (2017: 82%). The ratio of opened 
accounts to account applications increased to 25% (2017: 24%). The Group's active accounts increased 
2% to 2.6 million compared to the prior period-end, growing for the first time since the 2016 
reporting period.

The doubtful debt allowance to gross trade receivables has decreased to 12.3% from 12.7% at the 
prior period-end. Trade receivable costs decreased by 9.1% to R1 099 million compared to 
R1 209 million in the 53-week prior period. This net decrease is as a result of the increase in 
collection and other trade receivable costs of 4.3%, off-set by the decrease in net bad debt of 
4.8% and the reduction in the allowance for doubtful debts. Net bad debt to gross trade receivables 
decreased to 14.7% (2017: 15.0%), while net bad debt to account sales decreased to 9.2% (2017: 9.4%).

During March 2018 the High Court found in favour of the Group and two other major JSE-listed 
retailers in the legal action taken against the National Credit Regulator (NCR) and the Minister of 
Trade and Industry to rescind the requirements for customers to provide documentary proof of income 
under the credit affordability assessment regulations. The NCR has subsequently issued draft 
guidelines dealing with documentation requirements which have been open for public comment.

During the period in which the documentation requirements were effective, the Group successfully 
implemented various account granting strategies, updated its information systems and made its 
processes more efficient in an attempt to mitigate the negative impact of the regulations. Given the 
relative success of these changes, the Group believes that the positive outcome of the court case 
will have limited upside for the Group.

The Group uses accounts as an enabler of sales to customers in the mainstream middle-income 
South African market, as opposed to operating a financial services business. No fees are charged to 
customers, such as initiation fees, club fees, collection fees or magazine fees, except for an 
annual account service fee of R28. Financial services income (refer to note 4 for further details) 
constitutes only 0.3% of revenue.

Refer to note 3.2 Accounting policies and methods of computation, for detail regarding the potential 
impact of IFRS 9.

DIRECTORATE
During the period Mr Hans Hawinkels and Ms Maya Makanjee were appointed as independent non-executive 
directors of the company.

EXECUTIVE
The board has resolved to appoint Mr David Pfaff (53), the Group's Chief Financial Officer and an 
executive director of the company, to the newly created role of Group Chief Operating Officer (COO) 
whilst continuing in the role of Group Chief Financial Officer (CFO). The appointment will take place 
with immediate effect. Mr Pfaff who was appointed as CFO in March 2013 will now be responsible for 
retail store operations in addition to his existing portfolio of credit risk, credit operations, 
information systems and finance.

OUTLOOK
South Africa: Truworths
Although sentiment improved after President Ramaphosa came into office, consumer spending remains 
under pressure due to low economic growth, high levels of unemployment and the continuously rising 
cost of living. A subsequent decline in consumer confidence and mounting pressure on emerging markets 
remain obstacles for growth.

Several strategic initiatives recently undertaken by management aim to mitigate the effects of this 
challenging external environment. These include the launch of a sophisticated new e-commerce site 
to enhance the online offering, the testing and soon-to-be-implemented lay-by facility which will 
be available at all stores, the expansion of the recently acquired Loads of Living business and 
the roll-out of a new store concept. 

Management will continue its operational cost containment efforts, whilst investing appropriately 
in infrastructure for the long term.

The improved metrics of the debtors book, as evidenced by growth in active accounts, reduced 
provisioning and higher percentages of account customers able to shop because they are not in arrears, 
are positive indicators for future sales. 

Product inflation for the period July to December 2018 is expected to be flat following the 1.4% 
deflation achieved for the past reporting period.

Truworths' retail sales for the first six weeks of the 2019 reporting period compared to the first 
six weeks of the prior period are up 11.1%. However, the end-of-season sale commenced in week 1 of 
the 2019 reporting period, which was not the case in the prior period when the end-of-season sale 
commenced one week earlier in week 53 of the 2017 reporting period. Accordingly, the first six weeks 
of the 2019 reporting period are not directly comparable to the first six weeks of the 2018 
reporting period.

United Kingdom: Office
Political uncertainty relating to the outcome of the Brexit negotiations continues to have a negative 
impact on the trading environment. However, stable inflation, better employment growth and wage 
inflation are expected to have a small, but positive impact on UK household disposable income.

Management's initiatives aimed at addressing margin decline through improved merchandise ranges and 
product mix are expected to arrest the profitability decline experienced in the 2018 reporting period. 

The well-established and growing online and mobile retail presence positions Office for growth in a 
market with an increasing preference for online shopping. Improvements to the store concept are aimed 
at attracting customers through an enhanced in-store experience. These improvements over time should 
help off-set the sales pressure on stores. Marketing, customer engagement and loyalty initiatives 
are being implemented to retain customers, and improve customer experience and communication. 

Office's retail sales for the first six weeks of the 2019 reporting period compared to the first 
six weeks of the prior period are up 2.9% in Pound Sterling. These weeks are directly comparable 
in all material respects.

Group: Capital expenditure
Capital expenditure of R746 million (Truworths R626 million and Office £6.6 million) has been 
committed for the 2019 reporting period. 


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 1 July 2018 in the amount of 159 South African cents 
(2017: 182 South African cents) per ordinary share to shareholders reflected in the company's 
register on the record date, being Friday, 14 September 2018. 

The last day to trade in the company's shares cum dividend is Tuesday, 11 September 2018. 
Consequently no dematerialisation or rematerialisation of the company's shares may take place 
over the period from Wednesday, 12 September 2018 to Friday, 14 September 2018, both days inclusive. 
Trading in the company's shares ex dividend will commence on Wednesday, 12 September 2018. 
The dividend is scheduled to be paid in South African Rand (ZAR) on Monday, 17 September 2018. 

Dividends will be paid net of dividends tax (currently 20%), 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 20%, will result in a net cash dividend per share 
of 127.2 South African cents. The company has 442 589 686 ordinary shares in issue on 16 August 2018.

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. 

The directors have determined that gross dividends amounting to less than 2 000 South African 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
16 August 2018

One Capital
JSE Sponsor

Merchantec Capital Namibia
NSX Sponsor


SUMMARISED GROUP STATEMENTS OF FINANCIAL POSITION
                                                                       Note    At 1 Jul    At 2 Jul
                                                                                   2018        2017
                                                                                Audited     Audited
                                                                                     Rm          Rm
ASSETS                                        
Non-current assets                                                                6 904       6 559 
Property, plant and equipment                                                     1 726       1 637 
Goodwill                                                                  6       1 629       1 552 
Intangible assets                                                         7       3 227       3 037 
Derivative financial assets                                                          10          11 
Available-for-sale assets                                                            30          29 
Loans and receivables                                                               109          64 
Deferred tax                                                                        173         229 
                                        
Current assets                                                                    8 587       9 580 
Inventories                                                                       2 072       1 916 
Trade and other receivables                                                       5 110       5 256 
Derivative financial assets                                                          73           - 
Prepayments                                                                         350         338 
Cash and cash equivalents                                                           982       2 055 
Tax receivable                                                                        -          15 
Total assets                                                                     15 491      16 139 
                                        
EQUITY AND LIABILITIES                                        
Total equity                                                                     10 369       9 450 
Share capital and premium                                                 8         729         706 
Treasury shares                                                           9      (1 083)       (939)
Retained earnings                                                                10 932      10 212 
Non-distributable reserves                                                         (209)       (529)
                                        
Non-current liabilities                                                           2 363       4 709 
Interest-bearing borrowings                                              10       1 268       3 641 
Deferred tax                                                                        477         454 
Put option liability                                                                389         400 
Straight-line operating lease obligation                                            155         157 
Post-retirement medical benefit obligation                                           55          53 
Cash-settled compensation liability                                                  15           - 
Leave pay obligation                                                                  4           4 
                                        
Current liabilities                                                               2 759       1 980 
Trade and other payables                                                          1 800       1 634 
Interest-bearing borrowings                                              10         419         144 
Bank overdraft                                                                      263           - 
Provisions                                                                          140         111 
Contingent consideration obligation                                                   -          62 
Derivative financial liability                                                        -           6 
Tax payable                                                                         137          23 
Total liabilities                                                                 5 122       6 689 
Total equity and liabilities                                                     15 491      16 139 
                                        
Number of shares in issue (net of treasury shares)    (millions)                  428.3       429.4 
Net asset value per share                                (cents)                  2 421       2 201 
                                        
Key ratios                                        
Return on equity                                             (%)                     27          31 
Return on capital                                            (%)                     40          46 
Return on assets                                             (%)                     25          26 
Inventory turn                                           (times)                    4.0         4.5 
Asset turnover                                           (times)                    1.1         1.1 
Net debt to equity                                           (%)                    9.3        18.3 
Net debt to EBITDA                                       (times)                    0.2         0.4
                                                  


SUMMARISED GROUP STATEMENTS OF COMPREHENSIVE INCOME
                                                           Note    52 weeks                53 weeks
                                                                   to 1 Jul                to 2 Jul
                                                                       2018                    2017
                                                                    Audited           %     Audited
                                                                         Rm      change          Rm
Revenue                                                       4      19 254          (3)     19 858
                                                  
Sale of merchandise                                           4      17 547          (3)     18 065 
Cost of sales                                                        (8 354)                 (8 562)
Gross profit                                                          9 193          (3)      9 503 
Other income                                                  4         279                     291 
Trading expenses                                                     (6 954)         (2)     (7 086)
Depreciation and amortisation                                          (387)                   (389)
Employment costs                                                     (2 109)                 (2 094)
Occupancy costs                                                      (2 240)                 (2 155)
Trade receivable costs                                               (1 099)                 (1 209)
Other operating costs                                                (1 119)                 (1 239)
                                                  
Trading profit                                                        2 518          (7)      2 708 
Interest received                                             4       1 420          (4)      1 478 
Dividends received                                            4           8                      24 
Operating profit                                                      3 946          (6)      4 210 
Finance costs                                                          (250)                   (295)
Profit before tax                                                     3 696                   3 915 
Tax expense                                                          (1 031)                 (1 049)
Profit for the period                                                 2 665          (7)      2 866 
                                                  
Attributable to:                                                  
Equity holders of the company                                         2 643                   2 827 
Holders of the non-controlling interest                                  22                      39 
Profit for the period                                                 2 665                   2 866 
                                                  
Other comprehensive income/(losses) to be reclassified 
to profit or loss in subsequent periods                                 242                    (652)
Fair value adjustment on available-for-sale financial instruments        (2)                     (3)
Movement in foreign currency translation reserve                        244                    (649)
                                                  
Other comprehensive income not to be reclassified to profit or 
loss in subsequent periods                                                2                       9 
Re-measurement gains on defined benefit plans                             2                       9 
                                                  
Other comprehensive income/(losses) for the period, net of tax          244                    (643)
                                                  
Attributable to:                                                  
Equity holders of the company                                           218                    (569)
Holders of the non-controlling interest                                  26                     (74)
Other comprehensive income/(losses) for the period, net of tax          244                    (643)
                                                  
Total comprehensive income for the period                             2 909                   2 223
                                                  
Attributable to:                                                  
Equity holders of the company                                         2 861                   2 258 
Holders of the non-controlling interest                                  48                     (35)
Total comprehensive income for the period                             2 909                   2 223 
                                                  
Basic earnings per share                     (cents)                  614.8          (7)      659.9 
Headline earnings per share                  (cents)          5       615.7          (7)      662.0 
Diluted basic earnings per share             (cents)                  611.8          (7)      658.8 
Diluted headline earnings per share          (cents)          5       612.7          (7)      660.9 
Weighted average number of shares         (millions)                  429.9                   428.4 
Diluted weighted average number of shares (millions)                  432.0                   429.1 
                                                  
Key ratios                                                  
Gross margin                                     (%)                   52.4                    52.6 
Trading expenses to sale of merchandise          (%)                   39.6                    39.2 
Trading margin                                   (%)                   14.4                    15.0 
Operating margin                                 (%)                   22.5                    23.3


SUMMARISED GROUP STATEMENTS OF CHANGES IN EQUITY
                                                                                   Holders
                                    Share                          Non-   Equity    of the
                                  capital                    distribut-  holders  non-con-
                                      and  Treasury  Retained      able   of the  trolling    Total 
                                  premium    shares  earnings  reserves  company  interest   equity
                                       Rm        Rm        Rm        Rm       Rm        Rm       Rm
2018                                                                                          
Balance at the beginning 
of the period                         706      (939)   10 212      (529)   9 450         -    9 450 
Total comprehensive income 
for the period                          -         -     2 645       216    2 861        48    2 909 
Profit for the period                   -         -     2 643         -    2 643        22    2 665 
Other comprehensive income 
for the period                          -         -         2       216      218        26      244 
Cash dividends                          -         -    (1 925)        -   (1 925)        -   (1 925)
Shares repurchased                      -      (184)        -         -     (184)        -     (184)
Cost of shares vested and 
transferred to participants 
in terms of the 2012 restricted 
share scheme                            -        40         -       (40)       -         -        - 
Premium on shares issued in terms 
of the 1998 share option scheme        23         -         -         -       23         -       23 
Share-based payments                    -         -         -        87       87         -       87 
Acquisition of non-controlling 
interest                                -         -         -         -        -        (2)      (2)
Movement in put option liability        -         -         -        57       57       (46)      11 
Balance at 1 July 2018                729    (1 083)   10 932      (209)  10 369         -   10 369 
                                                                                          
                                                                                          
2017                                                                                          
Balance at the beginning 
of the period                         706      (882)    8 903      (102)   8 625         -    8 625 
Total comprehensive income 
for the period                          -         -     2 836      (578)   2 258       (35)   2 223 
Profit for the period                   -         -     2 827         -    2 827        39    2 866 
Other comprehensive income/
(losses) for the period                 -         -         9      (578)    (569)      (74)    (643)
Cash dividends                          -         -    (1 527)        -   (1 527)        -   (1 527)
Shares repurchased                      -      (101)        -         -     (101)        -     (101)
Cost of shares vested and 
transferred to participants 
in terms of the 2012 restricted 
share scheme                            -        29         -       (29)       -         -        - 
Utilisation of treasury shares in 
respect of the exercise of options in 
terms of the 1998 share option scheme   -        15         -        (7)       8         -        8 
Share-based payments                    -         -         -        61       61         -       61 
Acquisition of non-controlling 
interest                                -         -         -         -        -        (1)      (1)
Movement in put option liability        -         -         -       126      126        36      162 
Balance at 2 July 2017                706      (939)   10 212      (529)   9 450         -    9 450

Dividends (cents per share)                                                        2018        2017
Cash final - payable/paid September                                                 159         182
Cash interim - paid March                                                           261         270
Total                                                                               420         452


SUMMARISED GROUP STATEMENTS OF CASH FLOWS
                                                                               52 weeks    53 weeks
                                                                               to 1 Jul    to 2 Jul
                                                                                   2018        2017
                                                                                Audited     Audited
                                                                                     Rm          Rm
CASH FLOWS FROM OPERATING ACTIVITIES                                        
Cash flow from trading and cash EBITDA*                                           2 965       3 189 
Working capital movements                                                           172        (151)
Cash generated from operations                                                    3 137       3 038 
Interest received                                                                 1 425       1 473 
Dividends received                                                                    8          24 
Finance costs                                                                      (244)       (292)
Tax paid                                                                           (855)     (1 256)
Cash inflow from operations                                                       3 471       2 987 
Cash dividends paid                                                              (1 925)     (1 527)
Net cash from operating activities                                                1 546       1 460 
                                        
CASH FLOWS FROM INVESTING ACTIVITIES                                        
Acquisition of plant and equipment to expand operations                            (344)       (341)
Acquisition of plant and equipment to maintain operations                           (86)        (90)
Acquisition of computer software                                                    (55)        (37)
Proceeds on disposal of shares                                                        -           8 
Net acquisition of business                                                          (8)          - 
Premiums paid to insurance cell                                                      (9)        (12)
Amounts received from insurance cell                                                  5           3 
Loans and receivables repaid                                                          2          14 
Loans advanced                                                                      (47)          - 
Disposal of mutual fund units                                                         1           - 
Payment of contingent consideration obligation                                      (62)        (42)
Net cash used in investing activities                                              (603)       (497)
                                        
CASH FLOWS FROM FINANCING ACTIVITIES                                        
Proceeds on shares issued                                                            23           - 
Shares repurchased by subsidiaries                                                 (184)       (101)
Borrowings repaid                                                                (2 979)       (324)
Borrowings incurred                                                                 800           - 
Contributions to post-retirement medical benefit plan asset                          (3)         (3)
Acquisition of non-controlling interest                                              (2)          - 
Net cash used in financing activities                                            (2 345)       (428)
                                        
Net (decrease)/increase in cash and cash equivalents                             (1 402)        535 
Cash and cash equivalents at the beginning of the period                          2 055       1 592 
Net foreign exchange difference                                                      66         (72)
CASH AND CASH EQUIVALENTS AT THE REPORTING DATE                                     719       2 055 
                                        
Key ratios                                         
Cash flow per share                          (cents)                              807.4       697.2 
Cash equivalent earnings per share           (cents)                              738.3       766.3 
Cash realisation rate                            (%)                                109          91 
                                        
* Earnings before interest received, finance costs, tax, depreciation and amortisation.


SELECTED EXPLANATORY NOTES
1   STATEMENT OF COMPLIANCE
    The information in these summarised consolidated financial statements has been extracted from the 
    Group's 2018 annual financial statements, except for the information disclosed in note 15 
    (refer to note 15 for further detail). The summarised consolidated 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. Any forward-looking statement in this announcement has neither been reviewed nor 
    reported on by the company's external auditor, Ernst & Young Inc.

    The preliminary report and these summarised consolidated financial statements have been prepared 
    under the supervision of Mr DB Pfaff CA(SA), the Chief Financial Officer of the Group.

    These summarised consolidated financial statements for the year ended 1 July 2018 have been 
    audited by Ernst & Young Inc., who expressed an unmodified opinion thereon. The auditor also 
    expressed an unmodified opinion on the annual consolidated financial statements from which these 
    summarised consolidated financial statements were derived.

    A copy of the auditor's report on the summarised consolidated financial statements and of the 
    auditor's report on the annual consolidated financial statements are available for inspection at 
    the company's registered office, together with the financial statements identified in the respective 
    auditor's reports.

    The audit report on the summarised annual financial statements does not necessarily report on 
    all of the information contained in this preliminary report. 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 summarised financial statements.

2   BASIS OF PREPARATION
    The Group's annual financial statements for the period ended 1 July 2018 have been 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 or Rand) and all amounts are rounded to the nearest million, 
    except where otherwise indicated.

3   ACCOUNTING POLICIES AND METHODS OF COMPUTATION
    3.1  The accounting policies and methods of computation applied in the preparation of the Group's 
         2018 annual financial statements comply with IFRS and are consistent with those applied in 
         the preparation of the Group's annual financial statements for the prior period ended 
         2 July 2017, with the exception of the amendment to IAS 7: Statement of Cash Flows - 
         Disclosure, which is effective from the current reporting period and requires disclosures 
         that enable investors to evaluate changes in liabilities arising from financing activities, 
         including changes arising from cash flows and non-cash changes.

         Other IFRS, amendments and International Financial Reporting Interpretations Committee 
         (IFRIC) interpretations not applicable to Group activities
         Various other new and amended IFRS and IFRIC interpretations have been issued and are 
         effective in the reporting period but they are not applicable to the Group's activities.

    3.2  IFRS, amendments and IFRIC interpretations issued but not yet effective
         The following IFRS and amendments, that are relevant to the Group, have been issued but 
         are not effective for the period under review. The Group will adopt these no later than 
         their effective dates, to the extent that they are applicable to its activities:

         Amendments to IFRS 2: Share-based Payments - Classification and Measurement
         Effective for annual periods beginning on or after 1 January 2018
         The amendments contain requirements regarding the accounting for cash-settled share-based 
         payment transactions that include a performance condition, the classification of share-based 
         payment transactions with net settlement features and the accounting for modifications of 
         share-based payment transactions from cash-settled to equity-settled. 

         These amendments are not expected to impact the Group, as the principles required by the 
         amendments are either already applied by the Group, in the case of the amendments related 
         to the accounting for cash-settled share-based payment transactions that include a 
         performance condition, or they are not applicable to the Group, in the case of the 
         amendments related to the classification of share-based payment transactions with net 
         settlement features and the accounting for modifications of share-based payment transactions 
         from cash-settled to equity-settled.

         IFRS 9: Financial Instruments - Recognition and Measurement 
         Effective for annual periods beginning on or after 1 January 2018
         IFRS 9 will replace IAS 39 and it addresses the classification, measurement and derecognition 
         of financial assets and financial liabilities, and introduces new rules for hedge accounting 
         and a new impairment model for financial assets. 

         Under the new standard the Group is required to recognise either 12-month or lifetime 
         expected credit losses in respect of its trade receivables, depending on whether there has 
         been a significant increase in credit risk since initial recognition. The measurement of 
         expected credit losses would reflect a probability-weighted outcome, the time value of money, 
         and reasonable and supportable information. 

         Impairment losses are expected to be recognised earlier and will likely result in a higher 
         doubtful debt allowance than is currently determined under IAS 39 due to the incorporation 
         of forward-looking information, the application of a default rate to all debtors and the 
         recognition of lifetime expected credit losses.

         Based on the assessments undertaken to date, management will be adopting the general 
         impairment approach as the Group's accounting policy for trade receivables. 

         The Group will adopt the new standard by using the modified retrospective approach with 
         effect from 2 July 2018, applying the practical methods permitted under the standard. 
         Comparative amounts for the 2018 reporting period will not be restated.

         IFRS 15: Revenue Recognition
         Effective for annual periods beginning on or after 1 January 2018
         The Group has reviewed the new standard and the only impact relates to the recognition of 
         the sales returns provision. IFRS 15 requires revenue and cost of sales to be adjusted for 
         the selling and cost prices of the expected returns of merchandise against the sales 
         return provision and inventory respectively. 

         The impact of the above will result in reclassifications between sales and cost of sales in 
         the statement of comprehensive income and inventory and provisions in the statement of 
         financial position. As the Group currently provides for the net effect of the above against 
         sale of merchandise and the returns provision, the impact on profit or loss is not expected 
         to be material. 

         The Group will adopt the new standard with effect from 2 July 2018 and apply it on the 
         modified retrospective basis. Comparative amounts for 2018 will not be restated.

         IFRS 16: Leases - Recognition and Measurement
         Effective for annual periods beginning on or after 1 January 2019
         The standard will replace IAS 17 and requires most leases of lessees to be recognised in 
         the statement of financial position, as the distinction between finance and operating leases 
         has been removed.

         It is anticipated that leases relating to retail stores will result in the recognition of 
         a lease liability and a corresponding right of use asset. While the Group's EBITDA and 
         EBITDA margin will improve, depreciation and finance charges will increase and occupancy 
         costs will decrease. Return on assets will also be negatively impacted. Recognising a 
         lease liability will also impact net debt and the net debt to EBITDA ratio. 

         The Group will adopt the standard with effect from 1 July 2019 and apply it on either a 
         full or a modified retrospective basis.

    3.3  Basis of consolidation of financial results
         The Group consolidated annual financial statements comprise the annual financial statements 
         of the company and its consolidated subsidiaries and are prepared using uniform accounting 
         policies for like transactions and other events in similar circumstances.

                                                                   52 weeks                53 weeks
                                                                   to 1 Jul                to 2 Jul
                                                                       2018                    2017
                                                                    Audited           %     Audited
                                                                         Rm      change          Rm
4   REVENUE                                                  
    Sale of merchandise                                              17 547          (3)     18 065 
    Retail sales                                                     17 963                  18 472 
    Accounting adjustments*                                            (518)                   (518)
    Delivery fee income                                                  51                      53 
    Wholesale sales                                                      46                      50 
    Franchise sales                                                       5                       8 
    Interest received                                                 1 420          (4)      1 478 
    Trade receivables interest                                        1 286                   1 366 
    Investment interest                                                 134                     112 
    Other income                                                        279          (4)        291 
    Commission                                                          128                     137 
    Display fees                                                         56                      63 
    Financial services income                                            58                      54 
    Lease rental income                                                  26                      27 
    Other                                                                 7                       6 
    Insurance recoveries                                                  3                       2 
    Royalties                                                             1                       2 
    Dividends received from insurance business arrangements               8                      24 
    Total revenue                                                    19 254          (3)     19 858 
                                                            
    * Accounting adjustments made in terms of IFRS and generally accepted accounting practice relating 
      to promotional vouchers, staff discounts on merchandise purchased, cellular retail sales, 
      notional interest on non-interest-bearing trade receivables and the sales returns provision.

                                                                               52 weeks    53 weeks
                                                                               to 1 Jul    to 2 Jul
                                                                                   2018        2017
                                                                                Audited     Audited
                                                                                     Rm          Rm
5   RECONCILIATION OF PROFIT FOR THE PERIOD TO HEADLINE EARNINGS
    Profit for the period, attributable to equity holders of the company          2 643       2 827 
    Adjusted for:                                        
    Impairment of fixed and financial assets                                          1           9 
    Loss on write-off of plant and equipment                                          3           - 
    Headline earnings                                                             2 647       2 836
                   
6   GOODWILL                                        
    Balance at the beginning of the reporting period                              1 552       1 805 
    Movement in exchange rate through other comprehensive income                     77        (253)
    Balance at the reporting date                                                 1 629       1 552
                                                  
    Goodwill acquired through business combinations is allocated to the 
    Truworths Ltd and Office Retail Group Ltd cash-generating units and 
    tested for impairment biannually at each reporting date.                                        
                                                  
7   INTANGIBLE ASSETS                                        
    Balance at the beginning of the reporting period                              3 037       3 631 
    Additions                                                                        55          37 
    Additions arising on acquisition of Loads of Living                               2           - 
    Disposals                                                                         -           - 
    Cost                                                                            (42)         (6)
    Accumulated amortisation                                                         42           6 
    Amortisation                                                                    (46)        (41)
    Movement in exchange rate through other comprehensive income                    179        (590)
    Balance at the reporting date                                                 3 227       3 037 
                                                  
    The trademarks have been allocated to the Truworths Ltd and Office Retail 
    Group Ltd cash-generating units, are considered to have an indefinite useful 
    life and are tested for impairment biannually at each reporting date.

                                                                               52 weeks    53 weeks
                                                                               to 1 Jul    to 2 Jul
                                                                                   2018        2017
                                                                                Audited     Audited
                                                                                  R'000       R'000
8   SHARE CAPITAL                                        
    Ordinary share capital                                        
    Authorised                                        
    650 000 000 (2017: 650 000 000) ordinary shares of 0.015 cent each               98          98
                                                  
    Issued and fully paid                                        
    442 589 686 (2017: 442 059 551) ordinary shares of 0.015 cent each               66          66
                                                  
    The company has one class of ordinary shares which carry no rights to fixed income. 

    The holders of ordinary shares are entitled to receive dividends as declared from time to time 
    and are entitled to one vote per share at meetings of the company's shareholders.
                                                  
                                                                              Number of   Number of
                                                                                 shares      shares
                                                                                  000's       000's
    Reconciliation of movement in issued shares                                        
    Balance at the beginning of the reporting period                            442 059     436 183 
    Shares issued during the period                                                 530           -
    Capitalisation award                                                              -       5 876 
    Balance at the reporting date                                               442 589     442 059 
    Treasury shares held by subsidiaries                                        (14 329)    (12 649)
    Number of shares in issue (net of treasury shares)                          428 260     429 410 
                                                  
    Treasury shares as a % of the issued shares at the reporting date               3.2         2.9
                                                  
    Shares issued during the period were allotted for an aggregate nominal value of R79.54 and an 
    aggregate premium of R22 809 072. Shares issued during the prior period pursuant to the 
    capitalisation award were allotted for an aggregate nominal value of R881 with a corresponding 
    reduction in share premium.

                                                                               52 weeks    53 weeks
                                                                               to 1 Jul    to 2 Jul
                                                                                   2018        2017
                                                                                Audited     Audited
                                                                                     Rm          Rm
9   TREASURY SHARES                                                  
    Balance at the beginning of the reporting period                                939         882 
    Shares repurchased in respect of the 2012 restricted share scheme               184           -
    Shares repurchased in accordance with the general repurchase programme            -         101 
    Utilisation of treasury shares in respect of the exercise of options 
    in terms of the 1998 share option scheme                                          -         (15)
    Cost of shares vested and transferred to participants in terms of the 
    2012 restricted share scheme                                                    (40)        (29)
    Balance at the reporting date                                                 1 083         939 
                                                            
10  INTEREST-BEARING BORROWINGS                                                  
    Balance at the beginning of the reporting period, comprising:                 3 785       4 408 
    Non-current portion of interest-bearing borrowings                            3 641       4 042 
    Current portion of interest-bearing borrowings                                  144         366 
    Borrowings repaid                                                            (2 979)       (324)
    Borrowings incurred                                                             800           -
    Movement in exchange rate through other comprehensive income                     75        (314)
    Amortisation of arrangement fees                                                 18          12 
    Net finance charges accrued                                                     (12)          3 
    Balance at the reporting date, comprising:                                    1 687       3 785 
                                                            
    Non-current portion of interest-bearing borrowings                            1 268       3 641 
    Current portion of interest-bearing borrowings                                  419         144

    The R2.6 billion variable-rate long-term loans comprising South African Rand-based debt in the 
    form of three separate unsecured facilities advanced to the Group's main operating subsidiary, 
    Truworths Ltd, were repaid during the reporting period and refinanced with an unsecured term loan 
    of R500 million repayable in June 2021 and an unsecured revolving credit facility of 
    R1.2 billion. These facilities bear variable interest at margins of 1.35 and 1.29 percentage 
    points respectively above the three-month Johannesburg Interbank Agreed Rate (JIBAR).

11  BUSINESS COMBINATIONS
    Acquisition of Loads of Living
    With effect from 31 October 2017 the Group acquired Loads of Living, a linen and homeware 
    retailer with 13 stores in South Africa, as a going concern. From this date Loads of Living 
    became a trading department of the Group's main operating subsidiary Truworths Ltd. The total 
    purchase consideration payable was R4.8 million of which R1.3 million was placed in escrow. 

    The purchase consideration has been allocated to the identifiable assets and liabilities at the 
    acquisition date. Additional identifiable assets (including trademarks) and liabilities have been 
    recognised on completion of the purchase price allocation, with a corresponding reduction in 
    goodwill. A gain (i.e. a bargain purchase) of R64 000 has been recognised in profit and loss.

12  SEGMENT REPORTING
    The Group's reportable segments have been identified as the Truworths and Office business units.
    The Truworths business unit comprises all the retailing activities conducted by the Group in 
    Africa through which the Group retails fashion apparel comprising clothing, footwear and other 
    fashion products as well as homeware. Included in the Truworths business unit is the YDE business 
    unit which comprises the agency activities through which the Group retails clothing, footwear 
    and related products on behalf of emerging South African designers, as well as the Loads of 
    Living business unit which retails homeware. The Office business unit comprises the footwear 
    retail activities conducted by the Group through stores, concession outlets and an e-commerce 
    channel in the United Kingdom, Germany and the Republic of Ireland.

    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      Office      entries       Group
                                                            Rm          Rm           Rm          Rm
    2018                                                                      
    Total third party revenue                           14 328       4 940          (14)     19 254
    Third party                                         14 318       4 936            -      19 254
    Inter-segment                                           10           4          (14)          -
    Trading expenses                                     5 044       1 920          (10)      6 954
    Depreciation and amortisation                          289          98            -         387
    Employment costs                                     1 474         639           (4)      2 109
    Occupancy costs                                      1 462         778            -       2 240
    Trade receivable costs                               1 099           -            -       1 099
    Other operating costs                                  720         405           (6)      1 119
    Interest received                                    1 419           1            -       1 420
    Finance costs                                          222          28            -         250
                                                                                
    Profit for the period                                2 465         200            -       2 665
    Profit before tax                                    3 445         251            -       3 696
    Tax expense                                           (980)        (51)           -      (1 031)
                                                                                
    EBITDA                                               3 956         377            -       4 333
                                                                                
    Segment assets                                      12 734       6 222       (3 465)*    15 491
    Segment liabilities                                  2 477       2 650           (5)*     5 122
                                                                                
    Capital expenditure                                    419          66            -         485
                                                                                
    Other segmental information                                                                      
    Gross margin                                (%)       55.5        44.4            -        52.4
    Trading margin                              (%)       17.8         5.6            -        14.4
    Operating margin                            (%)       29.1         5.6            -        22.5
    Inventory turn                          (times)        4.8         3.1            -         4.0
    Account:cash sales mix                      (%)      69:31       0:100            -       50:50
                                                                                
    * Elimination of investment in Office as well as inter-segment assets and liabilities.

                                                                          Consolidation
                                                     Truworths      Office      entries       Group
                                                            Rm          Rm           Rm          Rm
    2017                                                                      
    Total third party revenue                           14 699       5 163           (4)     19 858
    Third party                                         14 695       5 163            -      19 858
    Inter-segment                                            4           -           (4)          -
    Trading expenses                                     5 158       1 932           (4)      7 086
    Depreciation and amortisation                          277         112            -         389
    Employment costs                                     1 438         656            -       2 094
    Occupancy costs                                      1 361         794            -       2 155
    Trade receivable costs                               1 207           2            -       1 209
    Other operating costs                                  875         368           (4)      1 239
    Interest received                                    1 477           1            -       1 478
    Finance costs                                          253          42            -         295
                                                                                
    Profit for the period                                2 514         352            -       2 866
    Profit before tax                                    3 510         405            -       3 915
    Tax expense                                           (996)        (53)           -      (1 049)
                                                                                
    EBITDA                                               4 040         559            -       4 599
                                                                                
    Segment assets                                      13 633       5 966       (3 460)*    16 139
    Segment liabilities                                  3 852       2 837            -       6 689
                                                                                
    Capital expenditure                                    407          60            -         467
                                                                                
    Other segmental information
    Gross margin                                (%)       55.2        46.0            -        52.6
    Trading margin                              (%)       17.5         8.6            -        15.0
    Operating margin                            (%)       29.2         8.7            -        23.3
    Inventory turn                          (times)        5.2         3.5            -         4.5
    Account:cash sales mix                      (%)      70:30       0:100            -       50:50
                                                                                
    * Elimination of investment in Office as well as inter-segment assets and liabilities.

                                                              2018                  2017          
                                                            Contribution               Contribution
                                                              to revenue                 to revenue
                                                         Rm            %            Rm            %
    Third party revenue                                                             
    South Africa                                     13 812         71.7        14 158         71.3 
    United Kingdom                                    4 425         23.0         4 618         23.3 
    Germany                                             252          1.3           272          1.4 
    Namibia                                             213          1.1           228          1.1 
    Republic of Ireland                                 206          1.1           185          0.9 
    Botswana                                            104          0.6            98          0.5 
    Swaziland                                            98          0.5            99          0.5 
    Zambia                                               30          0.2            32          0.2 
    Rest of Europe                                       28          0.2            31          0.2 
    Lesotho                                              23          0.1            20          0.1 
    Mauritius                                            21          0.1            21          0.1 
    United States                                        16          0.1            28          0.1 
    Kenya                                                 9            -*           17          0.1 
    Ghana                                                 8            -*           22          0.1 
    Middle East and Asia                                  5            -*           17          0.1 
    Australia                                             4            -*           12          0.1 
    Total third party revenue                        19 254          100        19 858          100 
                                                                      
    * Zero due to rounding.

                                                                                 1 Jul        2 Jul
                                                                                  2018         2017
                                                                               Audited      Audited
                                                                                    Rm           Rm
13  CAPITAL COMMITMENTS                                        
    Capital expenditure authorised but not contracted:                                        
    Store renovation and development                                               415          431
    Computer software and infrastructure                                           160          132
    Buildings                                                                        -           39
    Head office refurbishment                                                       10           23
    Motor vehicles                                                                   7            5
    Distribution facilities                                                         14            6
                                                                                   606          636

    Capital expenditure authorised and contracted:                                        
    Head office refurbishments                                                       5            -
    Buildings                                                                      135            -
    Total                                                                          746          636
                                                  
    The capital commitments will be financed through cash generated from operations, available cash 
    resources and financing facilities and are expected to be incurred in the 2019 reporting period.

14  EVENTS AFTER THE REPORTING DATE
    No event, material to the understanding of these summarised financial statements, has occurred 
    between the reporting date and the date of approval.

15  IMPACT OF THE 53rd WEEK IN 2017 ON 2018 YEAR-END FINANCIAL REPORTING
    In line with the practice generally prevailing in the South African retail industry, the Group 
    manages its internal accounting and retail operations in accordance with a retail calendar, 
    which treats each financial year as an exact 52-week period. This treatment effectively results 
    in the "loss" of a day (or two in a leap year) per calendar year. These days are brought to 
    account every four to seven years by including a 53rd week in the financial reporting calendar.

    Due to the inclusion of a 53rd week in the 2017 financial period, the 52 weeks of the current period 
    are not comparable to the 53 weeks of the prior period in terms of number of weeks and dates.

    Although the Group has reported comparative financial results for the 53 weeks to 2 July 2017, 
    it is useful and good governance to also report information for the directly corresponding 
    52-week prior period from 4 July 2016 to 2 July 2017, in order to facilitate comparisons of 
    the current period's results against such comparable prior period results. These adjustments 
    are not expected to have a continuing effect as they will only occur in every 53-week period.

    The preparation of the unaudited pro forma comparable 52-week prior period financial information
    is the responsibility of the directors. The tables below illustrate how the current period's 
    results compare to the directly corresponding 52-week prior period (i.e. 4 July 2016 to 
    2 July 2017), by excluding the results of week 1 of the prior period. 

    The unaudited pro forma comparable 52-week prior period information for the period ended 
    2 July 2017 has been prepared for illustrative purposes only, to indicate how the actual 
    audited results of the Group for the current period compare to such information and, because 
    of its nature, may not fairly represent the Group's financial position, changes in equity, 
    results of operations or cash flows of the prior period.

    The estimated financial impact of the 53rd week on the 2017 results is shown below.

    Statements of comprehensive income
                                                                                  52 weeks to
                                                                                   2 Jul 2017
                                                      53 weeks to                   Unaudited     Change on     Change on
                                        52 weeks to    2 Jul 2017                   pro forma  prior period  prior period
                                         1 Jul 2018       Audited      1st week    comparable      reported    comparable
                                            Audited  (As reported)  adjustments         weeks      53 weeks      52 weeks
                                                 Rm            Rm            Rm            Rm             %             %
    Sale of merchandise                      17 547        18 065          (483)       17 582            (3)            - 
    Retail sales (refer to the table below)  17 963        18 472          (482)       17 990            (3)            - 
    Accounting adjustments/other sales         (416)         (407)           (1)         (408)            2             2 
    Cost of sales                            (8 354)       (8 562)          226        (8 336)           (2)            - 
    Gross profit                              9 193         9 503          (257)        9 246            (3)           (1)
    Other income                                279           291             -           291            (4)           (4)
    Trading expenses                         (6 954)       (7 086)           13        (7 073)           (2)           (2)
    Depreciation and amortisation              (387)         (389)            -          (389)           (1)           (1)
    Employment costs                         (2 109)       (2 094)            7        (2 087)            1             1 
    Occupancy costs                          (2 240)       (2 155)            3        (2 152)            4             4 
    Trade receivable costs                   (1 099)       (1 209)            -        (1 209)           (9)           (9)
    Other operating costs                    (1 119)       (1 239)            3        (1 236)          (10)           (9)
                                                                                          
    Trading profit                            2 518         2 708          (244)        2 464            (7)            2 
    Interest received                         1 420         1 478            (1)        1 477            (4)           (4)
    Dividends received                            8            24             -            24           (67)          (67)
    Operating profit                          3 946         4 210          (245)        3 965            (6)            -
    Finance costs                              (250)         (295)            6          (289)          (15)          (13)
    Profit before tax                         3 696         3 915          (239)        3 676            (6)            1
    Tax expense                              (1 031)       (1 049)           64          (985)           (2)            5 
    Profit for the period                     2 665         2 866          (175)        2 691            (7)           (1)
                                                                                          
    Attributable to:                                                                                          
    Equity holders of the company             2 643         2 827          (172)        2 655            (7)            -
    Holders of the non-controlling interest      22            39            (3)           36           (44)          (39)
    Profit for the period                     2 665         2 866          (175)        2 691            (7)           (1)
                                                                                          
                                                                                          
    Statements of comprehensive income  
                                                                                  52 weeks to
                                                                                   2 Jul 2017
                                                      53 weeks to                   Unaudited     Change on     Change on
                                        52 weeks to    2 Jul 2017                   pro forma  prior period  prior period
                                         1 Jul 2018       Audited      1st week    comparable      reported    comparable
                                            Audited  (As reported)  adjustments         weeks      53 weeks      52 weeks
                                                 Rm            Rm            Rm            Rm             %             %
    Basic earnings per share (cents)          614.8         659.9         (40.2)        619.7            (7)           (1)
    Headline earnings per share (cents)       615.7         662.0         (40.2)        621.8            (7)           (1)
    Diluted basic earnings per share 
    (cents)                                   611.8         658.8         (40.1)        618.7            (7)           (1)
    Diluted headline earnings per share 
    (cents)                                   612.7         660.9         (40.1)        620.8            (7)           (1)
    Weighted average number of shares 
    in issue (millions)                       429.9         428.4                       428.4                     
    Diluted weighted average number of 
    shares in issue (millions)                432.0         429.1                       429.1                     
                                                                                          
    Key ratios                                                                                          
    Gross margin (%)                           52.4          52.6                        52.6                     
    Trading expenses to sale of 
    merchandise (%)                            39.6          39.2                        40.2                     
    Trading margin (%)                         14.4          15.0                        14.0                     
    Operating margin (%)                       22.5          23.3                        22.6                     
                                                                                          
    Retail sales                                                                                          
    Truworths ladieswear (Rm)                 3 753         3 988          (128)        3 860            (6)           (3)
    Truworths designer emporium (Rm)          1 383         1 436           (40)        1 396            (4)           (1)
    Total Truworths ladieswear (Rm)           5 136         5 424          (168)        5 256            (5)           (2)
    Truworths menswear (Rm)                   3 663         3 759          (103)        3 656            (3)            -
    Identity (Rm)                             2 082         2 129           (62)        2 067            (2)            1 
    Truworths kids emporium (Rm)                925           896           (24)          872             3             6 
    Other (Rm)                                1 309         1 183           (24)        1 159            11            13 
    Truworths* (Rm)                          13 115        13 391          (381)       13 010            (2)            1 
    Office (Rm)                               4 848         5 081          (101)        4 980            (5)           (3)
    Group retail sales (Rm)                  17 963        18 472          (482)       17 990            (3)            -
                                                                                          
    Office (£m)                                 281           294            (6)          288            (4)           (2)
                                                                                          
    * The 53 weeks to 2 July 2017 has been restated based on Truworths' new internal department 
      structure. The restatement did not affect total reported retail sales for the said period.

Notes:                                                                                
1  The accounting policies and methods of computations applied in the 2017 audited annual financial 
   statements, which have been prepared in accordance with IFRS, have been used in preparing the 
   unaudited pro forma comparable 52-weeks information. 

2  The information contained in the "52 weeks to 1 Jul 2018" and "53 weeks to 2 Jul 2017" columns have 
   been extracted without adjustment from the published, audited results for the respective periods.

3  The amounts in the "1st week adjustments" column relate to sale of merchandise, the related cost 
   of sales (calculated with reference to the gross profit margin for the 53-week prior period), weekly 
   payroll expense, concession rent, direct e-commerce costs, interest received, finance costs and tax 
   expense (calculated with reference to the applicable statutory tax rate) for the one-week period 
   from 27 June 2016 to 3 July 2016, together with the resultant gross profit, trading profit, operating 
   profit, profit before tax and profit for the said one-week period. 

4  The trading expenses, interest received and finance costs for the one-week periods from 27 June 2016 
   to 3 July 2016 and 26 December 2016 to 1 January 2017 respectively were not adjusted when preparing 
   the information for the comparable 26 weeks ended 1 January 2017, which information was disclosed 
   as note 14 in the unaudited group interim report for the period to December 2017, as it was 
   assumed that these line items for both these one-week periods were similar and should therefore 
   cancel out in all material respects, notwithstanding that these periods were six months apart. 
   As only one week is required to be adjusted in order to prepare the results for the unaudited 
   pro forma comparable 52-week prior period ended 2 July 2017, the trading expenses, interest 
   received and finance costs for the one-week period from 27 June 2016 to 3 July 2016 have been 
   adjusted from the results for the 53 weeks to 2 July 2017. The other numbers in the "1st week 
   adjustments" column also do not correlate with what was disclosed in note 14 of the unaudited 
   Group interim report for the period to December 2017 due to the difference in the average 
   exchange rate used to translate the results of Office over these respective periods. 

5  The relevant amounts for the one-week periods from 27 June 2016 to 3 July 2016 have been 
   extracted from the Group's accounting records with the exception of interest received which 
   has been recalculated based on the daily investment balances and prevailing interest rates.

6  The "1st week adjustments" column, in the opinion of the directors, fairly reflects the results 
   of the one-week period from 27 June 2016 to 3 July 2016.

7  The calculation of earnings per share and headline earnings per share for the unaudited pro 
   forma comparable 52-week period is based on the weighted average number of shares in issue 
   over that period. 

8  The Group's external auditor has issued an assurance report on the unaudited pro forma 
   comparable 52-weeks information. A copy of the said report is available at the Group's 
   registered office.


ADMINISTATION
Truworths International Ltd
Registration number 1944/017491/06

Tax reference number 9875/145/71/7
JSE code: TRU
NSX code: TRW
ISIN: ZAE000028296

Company secretary
Chris Durham, FCIS, PG Dip. Adv. Co Law (UCT)

Registered office
No. 1 Mostert Street, Cape Town, 8001, South Africa

Postal address
PO Box 600, Cape Town, 8000, South Africa

Contact details
Tel: +27 (21) 460 7911    Telefax: +27 (21) 460 7132

www.truworths.co.za
www.office.co.uk

Principal bankers
The Standard Bank of South Africa Ltd
Lloyds Bank plc

Auditors
Ernst & Young Inc. 

Attorneys
Bernadt Vukic Potash and Getz
Edward Nathan Sonnenbergs
Spoor & Fisher
Webber Wentzel
Bowman Gilfillan
Shoosmiths 

Sponsor in South Africa
One Capital Sponsor Services (Pty) Ltd

Sponsor in Namibia
Merchantec Capital Namibia (Pty) Ltd

Transfer secretaries
In South Africa
Computershare Investor Services (Pty) Ltd
Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196, South Africa
PO Box 61051, Marshalltown, 2107, South Africa
Tel: +27 (11) 370 5000    Telefax: +27 (11) 688 5248
www.computershare.com

In Namibia
Transfer Secretaries (Pty) Ltd
Robert Mugabe Avenue No. 4
Windhoek, Namibia
PO Box 2401, Windhoek, Namibia
Tel: +264 (61) 22 7647    Telefax: +264 (61) 24 8531 

Investor relations
David Pfaff (CFO)
Tel: +27 (21) 460 7956

Graeme Lillie (Tier 1 Investor Relations)
Tel: +27 (21) 702 3102

Directors
H Saven (Chairman)§‡, MS Mark (CEO)*, DB Pfaff (CFO)*, DN Dare*, RG Dow§‡, JHW Hawinkels§‡, 
M Makanjee§‡, CT Ndlovu§‡, RJA Sparks§‡, AJ Taylor§‡ and MA Thompson§‡
* Executive    § Non-executive    ‡ Independent


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