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RTO RTN RTOP
RTO
RTO / RTN / RTOP - Rex Trueform Clothing Company - Unaudited Interim Group
Results for the six months ended 31 December 2007
Rex Trueform Clothing Company Limited
(Incorporated in the Republic of South Africa - Reg No. 1937/009839/06)
Share codes: RTO - RTN - RTOP
ISIN: ZAE000006144 - ZAE000009700 - ZAE000006151
UNAUDITED INTERIM GROUP RESULTS
for the six months ended 31 December 2007
HIGHLIGHTS
- Revenue up by 16,6%
- Operating profit up by 180%
- Earnings per share up by 234%
- Headline earnings per share up by 207%
INCOME STATEMENT
Consolidated (R`000)
Six months ended Year ended
December 31 June 30
2007 2006 2007
Note (Unaudited) (Unaudited) (Audited)
Revenue 221 291 189 834 397 220
Turnover 215 565 186 557 390 594
Cost of sales 5 (117 403) (106 059) (218 423)
Gross profit 98 162 80 498 172 171
Other income 1 386 1 031 2 358
Selling, distribution and
administration expenses 5 (86 317) (76 803) (155 500)
Operating profit 13 231 4 726 19 029
Dividends received 21 19 19
Interest received 3 085 1 744 4 237
Profit on disposal of
associate 4 1 234 - -
(Loss)/profit from
associate (59) 93 (348)
Profit before tax 17 512 6 582 22 937
Income tax expense (5 539) (3 044) (7 709)
Profit 11 973 3 538 15 228
Profit attributable to:
Ordinary and `N`
ordinary shareholders 11 965 3 530 15 211
Preference shareholders 8 8 17
Profit 11 973 3 538 15 228
Reconciliation of
headline earnings
Attributable earnings 11 965 3 530 15 211
Profit on disposal of
associate (965) - -
Headline earnings 11 000 3 530 15 211
Earnings per share (cents)
Basic 58,8 17,6 75,3
Headline 54,0 17,6 75,3
Diluted basic 58,4 17,4 74,9
Diluted headline 53,7 17,4 74,9
Weighted average number of
equity shares on which earnings
per share is based (000) 20 352 20 113 20 193
Number of equity shares
in issue (000) 20 352 20 272 20 352
Weighted average number
of equity shares used
for diluted earnings
per share (000) 20 497 20 235 20 312
BALANCE SHEET
Consolidated (R`000)
At At
December 31 June 30
2007 2006 2007
(Unaudited) (Unaudited) (Audited)
Assets
Non-current assets 51 740 60 323 54 571
Property, plant and equipment 39 466 44 891 39 962
Investment property 3 511 3 511 3 511
Investments (unlisted) 629 2 515 2 130
Deferred taxation 8 134 9 406 8 968
Current assets 162 160 124 618 143 225
Inventories 70 359 65 348 45 599
Accounts receivable from holding
company 187 - 30
Trade and other receivables 21 748 17 363 19 560
Cash and cash equivalents 69 866 41 907 78 036
Total assets 213 900 184 941 197 796
Equity and liabilities
Capital and reserves 167 400 148 791 160 467
Share capital 1 777 1 777 1 777
Share premium 23 646 23 719 23 646
Other reserves 756 507 1 034
Retained earnings 141 221 122 788 134 010
Non-current liabilities 10 238 9 195 9 745
Provision for post-retirement
obligation 5 724 5 543 5 890
Operating lease liability 4 514 3 652 3 855
Current liabilities 36 262 26 955 27 584
Trade and other payables 34 919 26 898 25 984
Income tax payable 1 343 57 1 600
Total equity and liabilities 213 900 184 941 197 796
ABRIDGED CASH FLOW STATEMENT
Consolidated (R`000)
Six months ended Year ended
December 31 June 30
2007 2006 2007
(Unaudited) (Unaudited) (Audited)
Cash generated by operations 20 618 12 101 33 967
Working capital changes (17 677) (28 511) (12 263)
Interest received 3 085 1 744 4 237
Taxation paid (4 963) (4 175) (7 405)
Dividends paid (5 096) (5 075) (5 085)
Net cash (outflow)/inflow from
operations (4 033) (23 916) 13 451
Additions to property, plant and
equipment (6 813) (9 080) (10 638)
Proceeds on disposal of
property, plant and equipment - 69 105
Proceeds on disposal of
investment in associate 2 676 - -
Other - 580 864
Net cash outflows from investing
activities (4 137) (8 431) (9 669)
Net (decrease)/increase in cash (8 170) (32 347) 3 782
Cash and cash equivalents at
beginning of period 78 036 74 254 74 254
Cash and cash equivalents at
end of period 69 866 41 907 78 036
STATEMENT OF CHANGES IN EQUITY
Share capital 1 777 1 777 1 777
Share premium 23 646 23 719 23 646
Other reserves
Opening balance 1 034 566 434
Share-based payments 56 (142) (120)
Fair value revaluation reserve - - 524
Foreign exchange translation (334) 83 196
Closing balance 756 507 1 034
Retained earnings
Opening balance 134 010 124 325 123 867
Profit after taxation 11 973 3 538 15 228
Foreign exchange translation gain
realised 334 - -
Dividends (5 096) (5 075) (5 085)
Closing balance 141 221 122 788 134 010
Total capital and reserves 167 400 148 791 160 467
SEGMENTAL REPORTING
Turnover
Manufacturing 28 850 25 347 52 682
Less: intersegment sales (6 043) (9 520) (16 276)
External sales 22 807 15 827 36 406
Retail 192 758 170 730 354 188
Total 215 565 186 557 390 594
Operating profit/(loss)
Manufacturing (458) (774) (866)
Retail 15 344 7 484 22 727
Property 179 (289) 313
Group Services* (1 834) (1 695) (3 145)
Total 13 231 4 726 19 029
Depreciation included in
operating profit
Manufacturing 653 658 1 251
Retail 6 657 6 368 12 694
Total 7 310 7 026 13 945
Segment assets
Manufacturing 22 045 20 508 22 054
Retail 158 064 133 789 130 619
Property 8 299 8 344 8 299
Group Services 25 492 22 300 36 825
Total 213 900 184 941 197 797
Segment liabilities
Manufacturing (7 362) (5 273) (7 074)
Retail (33 541) (25 433) (24 331)
Group Services (5 597) (5 444) (5 924)
Total (46 500) (36 150) (37 329)
Capital expenditure
Manufacturing - 672 781
Retail 6 813 8 408 9 857
Total 6 813 9 080 10 638
- Group Services includes corporate costs and consolidation adjustments.
OTHER INFORMATION
Capital expenditure 6 813 9 080 10 638
Capital commitments
Contracted for 5 165 813 2 370
Authorised - not contracted for 3 110 2 772 6 412
Current ratio 4,5 4,6 5,2
NOTES
1. Basis of preparation
The condensed financial statements have been prepared in accordance with
International Accounting Standard IAS34: Interim Financial Reporting. They are
also compliant with International Financial Reporting Standards (IFRS). These
results have not been audited or reviewed by the company`s auditors, KPMG Inc.
2. Accounting policies
The accounting policies applied in these interim statements are consistent with
those applied in the preparation of the group`s annual financial statements
for the year ended 30 June 2007.
3. Preference dividend
A dividend on the 6% cumulative preference shares for the six months ended 31
December 2007 in the amount of R8 400 was declared on 23 November 2007 and paid
on 24 December 2007.
4. Sale of investment in associate
The group sold its 20,1% investment in Queenspark Australia Pty Limited during
this period. The profit on the realisation of this investment amounted to R1
234 000.
5. Prior year reclassification
A prior year reclassification of expenses, from cost of sales to selling,
distribution and administration expenses, in the amount of R63,3 million has
been recorded. The main items reclassified were occupancy and store employee
expenses that are not considered to be cost of sales.
COMMENTARY
The results of the group for the six months ended December 2007 reflect a
substantial improvement in performance over last year.
Revenue increased by 16,6% to R221,3 million. All segments of the group
produced better results aggregating in a profit after tax of R11 973 000 which
is an improvement of 238% over the corresponding period of last year. The
resultant headline earnings for the half-year amount to 54,0 cents per share
compared with 17,6 cents per share last year, an increase of 207%. Earnings
amount to 58,8 cents per share compared to 17,6 cents per share last year, an
increase of 234%.
The major contributor to the improved performance was the Queenspark retail
division which increased sales by 12,9%. Four new Queenspark stores were opened
during the half-year. Sales growth in comparable stores was 6,2% over the
corresponding period of last year whilst inflation applicable was 9,4% over the
same period. Operating profit of the retail segment increased by 105% to
R15,3 million. Operating profit margin improved to 8,0% from 4,4% last year.
Manufacturing activities remain centred in the Atlantis factory. Some progress
has been made in improving the performance of this plant and as a result the
operating loss has been reduced from previous levels.
Prospects
The second half of the financial year is expected to present a challenge as
higher interest rates and inflationary pressures should result in a slowdown in
consumer demand.
Queenspark`s seasonal ranges currently in stores have been well received by
customers and sales performance to date represents a pleasing improvement on
last year. Any decline in retail spending during the next few months should be
offset by additional sales generated by new stores.
The rate of increase in profit achieved during the first half of the financial
year is not expected to continue during the second half. The profit for the
full year ending June 2008 is expected to exceed that of the previous year.
Signed on behalf of the Board
ML Krawitz (Chairman) CEA Radowsky (Chief Executive Officer)
Cape Town
6 March 2008
Transfer Secretaries: Computershare Investor Services (Pty) Ltd, 70 Marshall
Street, Johannesburg 2001
Registered Office:
Rex Buildings, 263 Victoria Road, Salt River, Cape Town 7925
Sponsor:
Nedbank Capital
Rex Trueform Clothing Company Limited (Incorporated in the Republic of South
Africa - Reg No. 1937/009839/06)
Share codes: RTO - RTN - RTOP
ISIN: ZAE000006144 - ZAE000009700 - ZAE000006151
Directors: ML Krawitz (Chairman), CEA Radowsky (Chief Executive Officer),
PM Naylor, JC O`Brien and PE Shub (alt ML Krawitz)
Secretary: African & Overseas Enterprises Limited
Websites: www.queenspark.com ? www.rextrueform.com
Date: 06/03/2008 13:39:24 Produced by the JSE SENS Department.
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