| Thu 8 Nov 2007, 10:02 | | TRU - Truworths International Limited - Business u |
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TRU
TRU
TRU - Truworths International Limited - Business update
Truworths International Limited
(Incorporated in the Republic of South Africa)
(Registration number 1944/017491/06)
JSE Code: TRU
NSX Code: TRW
ISIN: ZAE000028296
BUSINESS UPDATE
Truworths International Limited (`the Group`) announces that sale of
merchandise for the first 19 weeks of the 2008 financial period increased to R
1 850 million, 15.7% above the corresponding period in 2006.
Group comparable store retail sales grew by 7% and product inflation was
approximately 6% during the period.
The Group opened 4 Identity, 5 Truworths, 3 Truworths Man, 2 YDE and 2 Uzzi
stores, relocated 3 stores, renovated and extended 7 stores and closed 1 store
during the period.
A further 11 new Identity, 8 new Truworths, 1 new Truworths Man and 6 new Uzzi
stores, as well as 12 store renovations and extensions, 2 relocations and 4
store closures, are planned for the remainder of the 2008 financial period,
resulting in an expected increase in overall trading space of 12%.
The Group`s strategy of meaningfully growing the active account base over the
last few years has as anticipated resulted in higher levels of delinquency and
net bad debt relative to those reported in prior periods. The increases in net
bad debt and the doubtful debt allowance, although at the upper end of
management expectations, are within acceptable parameters. These effects have
been partially offset by additional interest income arising from higher
interest rates and increased utilisation of interest-bearing plans.
A slowdown in the take-up of new accounts and a downturn in credit line
extension on existing accounts have been noted. These are attributable both to
the higher prevailing interest rates, which have reduced the disposable income
of consumers, and to the implementation of the National Credit Act.
Credit has been successfully launched within Uzzi, with the uptake thereof in
line with management expectations. The Group is likely to exercise its option
to acquire the remaining 49% of the business during the current financial
period.
While the past few years have yielded unprecedented growth, the economic
environment is now considerably tougher, and expectations are that store
retail sales growth will moderate accordingly.
The 2008 financial period will comprise 53 trading weeks, with the interim
results for the 27 week period to 30 December 2007 scheduled for release on or
about 21 February 2008.
8 November 2007
Cape Town
Lead Sponsor: Barnard Jacobs Mellet Corporate Finance (Pty) Ltd
Joint Sponsor: Standard Bank
Date: 08/11/2007 10:02:33 Produced by the JSE SENS Department.
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