| Fri 5 Sep 2008, 16:01 | | RTO / RTN / RTOP - Rex Trueform Clothing Company - Reviewed results for the year |
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RTO / RTN / RTOP - Rex Trueform Clothing Company - Reviewed results for the year
ended 30 June 2008
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
REVIEWED RESULTS FOR THE YEAR ENDED 30 JUNE 2008
Revenue up by 17,2%
Headline earnings per share up by 148%
Dividends increased by 40%
INCOME STATEMENT
Consolidated (R`000)
2008 2007
(Reviewed) (Audited)
Revenue 465 557 397 220
Turnover 454 126 390 594
Cost of sales (246 895) (220 287)
Gross profit 207 231 170 307
Employment costs (64 962) (56 876)
Occupancy costs (40 901) (32 634)
Depreciation and amortisation (14 749) (13 945)
Other operating costs (52 920) (50 181)
Rental income 2 567 1 519
Royalties 944 839
Operating profit 37 210 19 029
Dividends received 22 19
Interest received 7 898 4 249
Interest paid - (12)
Profit on disposal of associate 671 -
Share of losses of associated company (59) (348)
Profit before taxation 45 742 22 937
Taxation (6 966) (7 709)
Profit for the year 38 776 15 228
Profit attributable to:
Ordinary and `N` ordinary shareholders 38 759 15 211
Preference shareholders 17 17
Profit for the year 38 776 15 228
Reconciliation of headline earnings
Attributable earnings 38 759 15 211
Profit on disposal of plant and equipment (130) -
Profit on disposal of associate (662) -
Headline earnings 37 967 15 211
Headline earnings per share (cents) 186,5 75,3
Earnings per share (cents) 190,4 75,3
Diluted headline earnings per share (cents) 185,7 74,9
Diluted earnings per share (cents) 189,6 74,9
Proposed dividend per share (cents) 35,0 25,0
Dividend cover (based on headline earnings) 5,3 3,0
Weighted average number of equity shares on which
earnings per share is based (000) 20 352 20 193
Weighted average number of equity
shares used for diluted earnings
per share (000) 20 447 20 311
BALANCE SHEET
Assets
Non-current assets 56 153 54 571
Property, plant and equipment 40 630 39 962
Investment property 3 511 3 511
Investments (unlisted) 722 2 130
Deferred taxation 11 290 8 968
Current assets 185 143 143 225
Inventories 64 096 45 599
Accounts receivable from holding company - 30
Trade and other receivables 22 291 19 560
Cash and cash equivalents 98 756 78 036
Total assets 241 296 197 796
Equity and liabilities
Capital and reserves 193 972 160 467
Share capital 1 777 1 777
Share premium 23 631 23 646
Other reserves 883 1 034
Distributable reserves 167 681 134 010
Non-current liabilities 9 817 9 745
Post-retirement liability 3 499 5 890
Accrued operating lease liability 6 318 3 855
Current liabilities 37 507 27 584
Provisions 897 -
Trade and other payables 33 350 25 667
Forward exchange contracts 13 317
Amounts owed to holding company 13 -
Income tax payable 3 234 1 600
Total equity and liabilities 241 296 197 796
ABRIDGED CASH FLOW STATEMENT
Cash generated by operations 54 347 33 949
Working capital changes (16 209) (12 263)
Interest received 7 898 4 249
Interest paid - (12)
Taxation paid (7 654) (7 405)
Dividends received 22 19
Dividends paid (5 105) (5 085)
Net cash inflow from operations 33 299 13 452
Additions to property, plant & equipment (15 520) (10 639)
Proceeds on disposal of property, plant & equipment 280 105
Proceeds on disposal of investment in associate 2 676 -
Proceeds on delivery of shares by share trust (15) 864
Net cash outflows from investing activities (12 579) (9 670)
Net increase in cash 20 720 3 782
Cash at the beginning of the period 78 036 74 254
Cash at the end of the period 98 756 78 036
STATEMENT OF CHANGES IN EQUITY
Share capital 1 777 1 777
Share premium 23 631 23 646
Other reserves
Opening balance 1 034 434
Share-based payments 90 (120)
Fair value revaluation reserve 93 524
Foreign exchange translation (334) 196
Closing balance 883 1 034
Distributable reserves
Opening balance 134 010 123 867
Profit after taxation 38 776 15 228
Dividends (5 105) (5 085)
Closing balance 167 681 134 010
Total capital and reserves 193 972 160 467
SEGMENTAL REPORTING
Turnover
Manufacturing 46 795 45 641
less: intersegment sales (8 172) (16 276)
External sales 38 623 29 365
Retail 415 503 361 229
Total 454 126 390 594
Operating profit/(loss)
Manufacturing 417 (866)
Retail 36 624 22 727
Property 1 350 313
Group services + (1 181) (3 145)
Total 37 210 19 029
Depreciation included in operating profit
Manufacturing 1 533 1 251
Retail 13 216 12 694
Total 14 749 13 945
Total segment assets
Manufacturing 19 906 22 054
Retail 173 029 130 619
Property 8 784 8 299
Group Services 39 577 36 824
Total 241 296 197 796
Total segment liabilities
Manufacturing (7 483) (7 074)
Retail (36 329) (24 330)
Group Services (3 512) (5 925)
Total (47 324) (37 329)
Capital expenditure
Manufacturing - 781
Retail 14 933 9 858
Property 587 -
Total 15 520 10 639
+ Group services include corporate costs.
OTHER INFORMATION
Capital expenditure 15 520 10 639
Capital commitments
Authorised - not contracted for 19 818 8 782
Current ratio 4,9 5,2
Operating profit margin 8,2% 4,9%
NOTES
1 Basis of preparation
These annual financial statements have been prepared in terms of the South
African Companies Act of 1973 (as amended), IFRS and IAS 34 Interim Financial
Reporting.
2 Accounting policies
The accounting policies applied are consistent with those applied in the
preparation of the group`s annual financial statements for the year ended 30
June 2007, except for the adoption of IFRS 7 Financial Instruments: Disclosure
that became effective during the current year and had no impact on the reported
results.
3 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
R671 000.
4 Review by auditors
The financial information has been reviewed by KPMG Inc., whose unqualified
review opinion is available for inspection at the company`s registered office.
It is anticipated that an unqualified audit opinion will be issued once the
detailed financial statements have been finalised.
The annual report containing a detailed review of the operations of the company
together with the audited financial statements will be posted to shareholders
towards the end of September 2008.
COMMENTARY
The board is pleased to advise that the substantial improvement in the group`s
performance which was achieved during the first half-year was maintained
during the second half resulting in record levels of turnover and profit for
the year.
Revenue increased by 17,2% to R465,5 million and the gross margin improved from
43,6% to 45,6%. All segments of the group produced better results aggregating
in an after-tax profit of R38,8 million which is an improvement of 154,6% on
last year.
Earnings were further boosted by the curtailment of provisions, higher interest
earnings, profit on the realisation of our interest in the Australian associate
and a lower taxation charge. The latter is the result of an increase in the
deferred tax asset during the year, due to previously assessed losses which are
now expected to be utilised in full in future years.
Headline earnings improved by 147,7% to 186,5 cents per share. Earnings have
increased by 152,8% to 190,4 cents per share.
Retail
Queenspark`s turnover increased by 15,0% to R415,5 million and operating profit
increased by 61,1% to R36,6 million notwithstanding the challenging trading
conditions which prevailed for most of the year. Turnover was particularly
pleasing in the second half where an increase of 17,2% was achieved over last
year following the first-half improvement of 12,9%.
Same-store growth in turnover was 8,2% with average product inflation at 8,4%.
Seven new stores were opened during the year and there were no closures. The
new stores added 1 970 m2 of trading space, an increase of 13%.
Manufacturing
Clothing manufacturing activities remain centred at the Atlantis factory.
Manufacturing remains difficult and it is not expected that a profit will be
generated in the coming year.
Prospects
Queenspark`s Spring/Summer range, presently in stores, has been well received
by customers. The economic cycle will inevitably continue to slow down and the
remainder of the current period is likely to be challenging with high interest
rates, increased energy costs and food inflation having a dampening effect on
consumer spending.
We continue to invest selectively in new stores and take a conservative view of
growth prospects for the 2009 financial year.
Dividend
The board is recommending to shareholders that the dividend on the ordinary and
`N` ordinary shares be increased to 35,0 cents per share. This will result in a
dividend cover of 5,3 times.
Shareholders will be asked to consider, and if deemed fit, approve the
directors` dividend recommendation at the annual general meeting of the company
to be held on 12 November 2008.
An announcement detailing the terms of the dividend declaration will be made
immediately following the annual general meeting.
Signed on behalf of the board
ML Krawitz (Chairman) CEA Radowsky (Chief Executive Officer)
Cape Town
5 September 2008
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
Transfer Secretaries: Computershare Investor Services (Pty) Ltd, 70 Marshall
Street, Johannesburg 2001
Sponsor: Java Capital (Pty) Ltd
Registered Office: Rex Buildings, 263 Victoria Road, Salt River, Cape Town 7925
Date: 05/09/2008 16:01:01 Produced by the JSE SENS Department.
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