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RTO RTOP RTN
RTO
RTO/RTN/RTOP - Rex Trueform Clothing Company Limited - Unaudited interim
group results for the six months ended 31 December 2009
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 2009
HIGHLIGHTS:
- OPERATING PROFIT UP 19.9%
- HEADLINE EARNINGS UP 11.8%
- STRONG CASH FLOW
- STRONG BALANCE SHEET
COMMENTARY
In the difficult economic environment revenue declined by 3.8% largely as a
result of lower turnover in the manufacturing division.
Operating profit increased by 19.9% as a result of an improved performance by
the Queenspark retail segment. Earnings per share amounted to 73.1 cents,
compared to 66.2 cents last year, an improvement of 10.4%. Headline earnings
per share improved by 11.8% to 73.0 cents compared with 65.3 cents per share
last year.
Retail
Consumers remained under pressure and turnover growth was limited to 0.4%. In
the challenging retail environment same store sales declined by 1.9%. Four
new stores were opened during the period, which together with improved
margins and operating efficiencies resulted in an increase of 33.8% in
Queenspark`s operating profit compared to the same period of last year.
Manufacturing
A reduction in orders at the Atlantis manufacturing plant and the subsequent
reorganisation of this factory resulted in an increased operating loss.
Prospects
Retail performance remains affected by the depressed incomes, rising costs
and low confidence levels of consumers. The costs associated with running the
business, particularly energy costs also continue to rise. The manufacturing
segment will also continue to present a challenge.
Past performance benefited materially from the Duty Credit Certificate Scheme
which is to be completely phased out in the near future.
Current strategy is directed at strengthening Queenspark`s position in the
market-place through growth of the store base, store upgrades and a renewed
focus on the product offering.
The depressed economic conditions are expected to continue well into 2010 and
the achievement of sales and profit targets will remain challenging.
Signed on behalf of the board
ML Krawitz (Chairman) CEA Radowsky (Chief Executive Officer)
Cape Town
5 March 2010
Statement of comprehensive income
Consolidated (R`000)
Six months ended Year ended
31 December 30 June
2009 2008 2009
(Unaudited) (Unaudited) (Audited)
Revenue 246 523 256 182 502 759
Turnover 241 687 249 565 491 023
Cost of sales (117 708) (138 387) (274 748)
Gross profit 123 979 111 178 216 275
Employment costs (38 785) (35 438) (71 449)
Occupancy costs (31 106) (24 739) (53 325)
Depreciation and amortisation (6 547) (6 088) (12 248)
Other operating costs (30 342) (31 694) (53 599)
Rental income 17 1 003 408
Royalties 503 561 1 118
Operating profit 17 719 14 783 27 180
Dividends received 16 23 23
Finance income 4 300 5 030 10 187
Finance expenses (182) (125) (365)
Profit before taxation 21 853 19 711 37 025
Income tax expense (6 976) (6 233) (11 414)
Total comprehensive income
for the period 14 877 13 478 25 611
Total comprehensive income
attributable to:
Ordinary and `N` ordinary
shareholders 14 869 13 470 25 594
Preference shareholders 8 8 17
Total comprehensive income
for the period 14 877 13 478 25 611
Reconciliation of headline
earnings
Attributable earnings 14 869 13 470 25 594
Profit on disposal of plant
and equipment (17) (186) (346)
Headline earnings 14 852 13 284 25 248
Headline earnings per
share (cents) 73.0 65.3 124.1
Earnings per share (cents) 73.1 66.2 125.8
Diluted headline earnings
per share (cents) 72.6 64.8 123.2
Diluted earnings per
share (cents) 72.7 65.7 124.9
Weighted average number of
equity shares on which
earnings per share is
based (000) 20 352 20 352 20 352
Weighted average number of
equity shares used for
diluted earnings per share (000) 20 462 20 505 20 490
Statement of financial position
Consolidated (R`000)
At At
31 December 30 June
2009 2008 2009
(Unaudited) (Unaudited) (Audited)
Assets
Non-current assets 65 590 58 086 60 484
Property, plant and equipment 53 883 41 045 47 058
Investment property 3 511 3 511 3 511
Intangible assets 2 065 3 120 2 720
Investments (unlisted) 722 722 722
Deferred taxation 5 409 9 688 6 473
Current assets 195 531 198 428 201 724
Inventories 50 202 81 683 68 484
Accounts receivable from
holding company 24 124 27
Trade and other receivables 16 891 29 879 19 205
Income tax 378 - -
Cash and cash equivalents 128 036 86 742 114 008
Total assets 261 121 256 514 262 208
Equity and liabilities
Capital and reserves 220 296 200 354 212 514
Share capital 1 777 1 777 1 777
Share premium 23 631 23 631 23 631
Other reserves 991 919 954
Retained earnings 193 897 174 027 186 152
Non-current liabilities 11 606 11 099 10 863
Post-retirement liability 3 338 3 445 3 332
Accrued operating lease
liability 8 268 7 654 7 531
Current liabilities 29 219 45 061 38 831
Provisions 578 837 669
Trade and other payables 27 701 39 389 32 393
Forward exchange contracts 940 1 131 5 642
Income tax payable - 3 704 127
Total equity and liabilities 261 121 256 514 262 208
Abridged statement of cash flows
Consolidated (R`000)
Six months ended Year ended
31 December 30 June
2009 2008 2009
(Unaudited) (Unaudited) (Audited)
Cash generated by operations 26 113 22 145 46 189
Working capital changes 10 180 (18 269) (2 707)
Finance income 4 300 5 030 10 187
Finance expenses (182) (125) (365)
Taxation paid (6 417) (4 161) (9 704)
Dividends received 16 23 23
Dividends paid (7 132) (7 132) (7 140)
Net cash inflow/(outflow)
from operations 26 878 (2 489) 36 483
Additions to property,
plant and equipment (12 874) (9 836) (22 090)
Proceeds on disposal of
property, plant and
equipment 24 311 859
Net cash outflows from
investing activities (12 850) (9 525) (21 231)
Net increase/(decrease) in
cash and cash equivalents 14 028 (12 014) 15 252
Cash and cash equivalents
at beginning of period 114 008 98 756 98 756
Cash and cash equivalents
at end of period 128 036 86 742 114 008
Statement of changes in equity
Consolidated (R`000)
Six months ended Year ended
31 December 30 June
2009 2008 2009
(Unaudited) (Unaudited) (Audited)
Share capital 1 777 1 777 1 777
Share premium 23 631 23 631 23 631
Other reserves
Opening balance 954 883 883
Share-based payments 37 36 71
Closing balance 991 919 954
Retained earnings
Opening balance 186 152 167 681 167 681
Total comprehensive income
for the period 14 877 13 478 25 611
Dividends (7 132) (7 132) (7 140)
Closing balance 193 897 174 027 186 152
Total capital and reserves 220 296 200 354 212 514
Segmental reporting
Consolidated (R`000)
Six months ended Year ended
31 December 30 June
2009 2008 2009
(Unaudited) (Unaudited) (Audited)
Segment revenue
Retail 234 461 233 608 467 318
Manufacturing 7 729 16 518 24 823
Manufacturing total 8 815 18 017 27 192
Less: intersegment sales (1 086) (1 499) (2 369)
Property 17 1 003 408
Total segment revenue 242 207 251 129 492 549
Other 4 316 5 053 10 210
Total revenue 246 523 256 182 502 759
Segment profit/(loss)
Retail 23 162 17 312 32 035
Property (348) 137 507
Manufacturing (3 116) (766) (2 095)
Segment profit 19 698 16 683 30 447
Group Services* (1 979) (1 900) (3 267)
Total operating profit 17 719 14 783 27 180
Segment assets
Retail 180 388 194 003 180 248
Property 8 695 8 784 8 725
Manufacturing 10 288 19 094 11 348
Total segment assets 199 371 221 881 200 321
Group Services* 61 750 34 633 61 887
Total assets 261 121 256 514 262 208
* Group Services includes corporate costs.
Other information
Consolidated (R`000)
Six months ended Year ended
31 December 30 June
2009 2008 2009
(Unaudited) (Unaudited) (Audited)
Capital expenditure 12 874 9 836 22 090
Capital commitments (authorised -
not contracted for) 11 050 11 574 16 168
Current ratio 6.7 4.4 5.2
Notes
1. Basis of preparation
These interim financial statements have been prepared in accordance with
International Accounting Standard IAS 34: 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 2009.
3. Preference dividend
A dividend on the 6% cumulative preference shares for the six months ended
31 December 2009 in the amount of R8 400 was declared on 1 December 2009 and
paid on 28 December 2009.
Directors: ML Krawitz+ (Chairman), CEA Radowsky (Chief Executive Officer),
PM Naylor*, JC O`Brien, RV Orlin*, DS Johnson and PE Shub (alt ML Krawitz +)
* Independent non-executive + Non-executive
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
Registered office: Rex Buildings, 263 Victoria Road, Salt River, Cape Town,
7925
Secretary: African & Overseas Enterprises Limited
Transfer secretaries: Computershare Investor Services (Pty) Limited,
70 Marshall Street, Johannesburg, 2001
Sponsor: Java Capital (Pty) Limited
Websites:
www.queenspark.com
www.rextrueform.com
8 March 2010
Date: 08/03/2010 12:30:01 Produced by the JSE SENS Department.
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