Wrap Text
Business update for the 52-week period ended 2 July 2023
Truworths International Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1944/017491/06)
JSE Code: TRU
A2X Code: TRU
NSX Code: TRW
ISIN: ZAE000028296
LEI: 37890099AFD770037522
(‘Truworths International’ or the ‘Group’)
BUSINESS UPDATE FOR THE 52-WEEK PERIOD ENDED 2 JULY 2023
Group retail sales for the 52-week period ended 2 July 2023 (the ‘current period’) increased
by 11.4% to R20.6 billion relative to the R18.5 billion reported for the 53-week prior period
ended 3 July 2022 (the ‘prior period’ or ‘2022’). Due to the inclusion of a 53rd week in the
prior period, the sales performance of the current and prior period is not comparable.
Compared to the corresponding 52 weeks of the 2022 financial period (the ‘corresponding
prior period‡’), Group retail sales for the current period increased by 13.2%.
This growth was achieved despite the challenging macro environment in the Group’s main
markets, South Africa and the United Kingdom. Guided by its Business Philosophy and backed
by a strong balance sheet, the Group managed costs and margins effectively, rolled out new
store formats and managed inventory and trade receivables consistently to ensure growth in
the business.
Account sales comprised 51% (2022: 52%) of Group retail sales for the current period, with
cash and account sales increasing by 14.8% and 8.2%, respectively, relative to the 53-week
prior period.
Retail sales growth for the current period by business segment was as follows:
Increase Increase on
on prior corresponding
Retail sales period prior period‡
52 weeks to 52 on 53 52 on 52
2 July 2023 weeks weeks
Truworths Africa R15.0bn 7.3% 9.1%
Office £262.1m 16.9% 18.8%
Total R20.6bn 11.4% 13.2%
Group retail sales performance in the first and second half of the current period was as follows:
Increase Increase on
on prior corresponding
Retail sales period~ prior period^
First half – 26 weeks to 1 January 2023* R11.3bn 13.7% 13.0%
Second half – 26 weeks to 2 July 2023** R9.3bn 8.7% 13.4%
Total – 52 weeks to 2 July 2023 R20.6bn 11.4% 13.2%
Truworths Africa
Retail sales performance for the Truworths Africa segment (comprising mainly of the
Truworths businesses in South Africa) was as follows:
Increase Increase on
on prior corresponding
Retail sales period~ prior period^
First half – 26 weeks to 1 January 2023* R8.4bn 13.8% 13.4%
Second half – 26 weeks to 2 July 2023** R6.6bn 0.0% 4.0%
Total – 52 weeks to 2 July 2023 R15.0bn 7.3% 9.1%
Account and cash sales increased by 8.2% and 5.2% (10.1% and 6.8% relative to the
corresponding prior period‡), respectively.
Trading continued to be impacted by pressure on consumer disposable income and
discretionary spending in the current low growth, high inflationary environment. The
challenging macro environment was further affected by the energy crisis in South Africa, with
significantly higher levels of electricity load shedding observed from September 2022
onwards. The consequences of electricity load shedding on the economy and retail trade in
general are far reaching, impacting economic growth and job creation. During the current
period the Group spent approximately R40 million on backup power solutions for its stores in
South Africa, and incurred additional operating costs in respect of diesel for backup generators
for distribution centres and stores. At the current period-end, stores covering 87% of the
segment’s South African sales were equipped with alternative power sources. The remaining
stores have historically not required alternative power sources, either because they do not
experience load shedding or they have sufficient natural and artificial lighting and can
therefore continue to trade manually.
Account sales comprised 70% of the segment’s retail sales (2022: 69%) for the current
period. Truworths Africa’s like-for-like store retail sales increased by 4.4% (increased by 6.1%
relative to the corresponding prior period‡) and trading space increased by 1.4% relative to
the prior period-end (2022: 0.2% decrease). Product inflation averaged 12.6% for the current
period (2022: 0.6% deflation) mainly due to the depreciation of the Rand.
Gross trade receivables (relating to the Truworths, Identity and YDE businesses) increased
by 11.7% to R6.6 billion (2022: R5.9 billion) and the number of active accounts increased by
5.7% to approximately 2.8 million relative to the prior period-end. Active account holders
able to purchase were at 80% (2022: 82%) and overdue balances as a percentage of gross
trade receivables at 16% (2022: 14%).
Office
Retail sales performance for the Office segment (comprising mainly of the Office businesses
in the United Kingdom) was as follows:
Increase Increase on
on prior corresponding
Retail sales period~ prior period^
First half – 26 weeks to 1 January 2023* £140.2m 13.6% 12.3%
Second half – 26 weeks to 2 July 2023** £121.9m 20.9% 27.1%
Total – 52 weeks to 2 July 2023 £262.1m 16.9% 18.8%
In Rand terms, retail sales for the Office segment increased by 23.9% to R5.6 billion
(increased by 25.9% relative to the corresponding prior period‡).
Trading conditions in the United Kingdom were much improved in the current period as
tourism rebounded and workers had returned to their offices after all COVID-19 related
restrictions were abolished in the prior period. However, consumer spending remained under
pressure as a result of the fall in real disposable income that the UK has experienced since
late 2021. Despite the macro challenges, demand for Office’s merchandise offering remained
robust and the business traded well throughout the current period.
Office continues to benefit from its strong online presence, with online sales contribution
unchanged at approximately 45% of retail sales for the current period.
The Office segment’s trading space decreased by 12.6% relative to the prior period (2022:
reduction of 4.4%).
Earnings
The Group is currently finalising its financial results for the current period which are subject
to external audit. The Group will provide an update on earnings for the current period in due
course.
Results release
The Group’s audited results for the 52-week period ended 2 July 2023 are scheduled for
release on or about Thursday, 31 August 2023.
Shareholders are advised that the financial information provided in this business update is
the responsibility of the directors and that such information has neither been reviewed nor
reported on by the Group’s external auditors. The pro forma financial information has been
prepared in accordance with International Financial Reporting Standards, is provided for
illustrative purposes only and, because of its nature, may not fairly represent the
financial performance of the Group.
‡ The 52-week period from 5 July 2021 to 3 July 2022, being the prior period, excluding the
1st week from 28 June 2021 to 4 July 2021.
* The corresponding first half of the prior period is the 26-week period from 5 July 2021 to 2
January 2022, being the first half of the prior period, excluding the week of 28 June 2021 to
4 July 2021.
** The corresponding second half of the prior period is the 26-week period from
3 January 2022 to 3 July 2022, being the second half of the prior period, excluding the week
of 27 December 2021 to 2 January 2022.
~ Increase on prior period means the increase on the reported prior period retail sales. In the
case of the first half it represents 26 on 26 weeks, in the case of the second half, 26 on 27
weeks and for the full year 52 on 53 weeks. The weeks are not corresponding due to the
inclusion of a 53rd week in the prior period.
^ Increase on corresponding prior period means the increase on the corresponding prior
26-week retail sales.
20 July 2023
Cape Town
Sponsor in South Africa
One Capital
Sponsor in Namibia
Merchantec Capital
Date: 20-07-2023 05:15:00
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