Trading update for the 26-week period ended 31 December 2017
Truworths International Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1944/017491/06)
JSE Code: TRU
NSX Code: TRW
TRADING UPDATE FOR THE 26-WEEK PERIOD ENDED 31 DECEMBER 2017
Truworths International Limited (the ‘Group’) announces that Group retail sales for
the 26-week period ended 31 December 2017 (‘the current period’) increased to
R10.3 billion relative to the R10.2 billion reported for the 26-week period ended
25 December 2016 (‘the prior period’).
However, due to the inclusion of a 53rd week in the full 2017 financial period, the 26
weeks of the current period (i.e. 3 July 2017 to 31 December 2017) do not
correspond with the 26 weeks of the prior period (i.e. 27 June 2016 to 25
December 2016). Compared to the directly corresponding 26-week period of the full
2017 financial period (i.e. 4 July 2016 to 1 January 2017) (‘the comparable prior
period’*), retail sales for the current period increased by 1%.
Account sales comprised 50% (2016: 50%) of Group retail sales for the current
period, with cash sales growing by 1% and account sales remaining unchanged.
Retail sales for Truworths (being the Group, excluding the UK-based Office
segment) increased by 1% to R7.4 billion, with cash sales growing by 3% and
account sales remaining unchanged relative to the prior period. Account sales
comprised 69% of these retail sales (2016: 69%). Relative to the comparable prior
period, Truworths retail sales for the current period increased by 2%. Trading space
increased by 5% on the prior period (including the trading space of the recently
acquired Loads of Living business). Like-for-like store retail sales decreased by 3%,
while product deflation averaged 2% (2016: 16% inflation).
Retail sales for the UK-based Office segment increased in Sterling terms by 1% to
£162 million relative to the prior period’s £159 million, but on translation decreased
to R2.8 billion from the prior period’s R2.9 billion because of Rand strengthening.
Relative to the comparable prior period, Office retail sales for the current period
decreased by 1% in Sterling terms. Trading space increased by 1% on the prior
period, while product inflation averaged 4% (2016: 2%).
Gross trade receivables in respect of the debtors book (Truworths, Identity and
YDE) declined to R6.3 billion from R6.4 billion at the prior period-end. The decline in
the book is mainly attributable to the improved collections experience since the
prior period-end. The percentage of active account holders able to purchase at the
end of the current period increased to 87% compared to 85% at the prior period-
end and 82% at June 2017, while overdue balances as a percentage of gross trade
receivables improved to 10% from 11% at the prior period-end.
The Group’s diluted headline earnings per share (‘HEPS’) for the current period are
expected to decrease by between 3% and 5% to between 372 cents and 380 cents
relative to the diluted HEPS of 391.9 cents reported for the prior period.
Relative to the comparable prior period’s diluted HEPS of 385.3 cents, diluted HEPS
are expected to decrease between 1% and 3%.
These results are inclusive of the non-comparable results of Loads of Living, the
homeware business acquired by the Group with effect from 31 October 2017. The
inclusion of the Loads of Living results has had no material impact on the Group
results. The retail sales of Loads of Living for the current period included in the
Truworths retail sales comprise cash sales of R21 million.
Shareholders are advised that this trading update does not constitute an earnings
forecast, that the financial information provided herein is the responsibility of the
directors, and that such information has neither been reviewed nor reported on by
the Group’s external auditors. The Group’s interim results for the 26-week period
ended 31 December 2017 are scheduled for release on or about Thursday, 22
* The comparable prior period retail sales and HEPS were calculated by deducting
the relevant amounts in respect of the one-week period from 27 June 2016 to 3
July 2016 from, and adding the relevant amounts in respect of the one-week period
from 26 December 2016 to 1 January 2017 to, the respective prior period amounts.
The relevant amounts were extracted from the Group’s unaudited accounting
records, and in the opinion of the directors, fairly reflect the comparable prior
period retail sales and HEPS. A complete reconciliation of the comparable prior
period results will be provided in the Group’s interim results announcement.
17 January 2018
JSE Sponsor: One Capital Sponsor Services (Pty) Ltd
NSX Sponsor: Merchantec Capital Namibia (Pty) Ltd
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