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RTO RTOP RTN
RTO
RTO/RTN/RTOP - Rex Trueform Clothing Company Limited - Unaudited Interim Group
Results for the half-year ended 31 December 2011
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 half-year ended 31 December 2011
REVENUE UP 4.9%
OPERATING PROFIT DOWN 16.0%
HEADLINE EARNINGS PER SHARE DOWN 24.6%
Commentary
Group results
The withdrawal of Duty Credit Certificate benefits which were utilised by the
group in the previous period had a materially negative impact on profit during
the half-year under review.
Furthermore the percentage increase in operating costs exceeded the 4.9%
increase in turnover.
The above factors have had a negative effect on net margin. The operating
profit from continuing operations accordingly reduced by 16% on the
comparative period.
Headline earnings for the half-year amounted to 80.5 cents per share from
continuing operations (97.7 cents in 2010).
Retail
The Queenspark retail segment grew sales by 4.9% during a period in which
trading was disrupted by the refurbishment of a number of stores and also
building alterations in some major shopping malls. In addition trading
conditions remained challenging. Retail sales were further impacted by the
closure of three non-performing stores during the past 12 months.
Property segment
The strategy of the group is to redevelop certain of the group`s properties
where viable.
Prospects
We anticipate that there will be further deterioration in margins and
profitability in the second half of the financial year due to escalating
expenses and difficult trading conditions.
Any reference to future financial performance included in this statement has
not been reviewed and reported on by the company`s external auditors and does
not constitute an earnings forecast.
Signed on behalf of the board
ML Krawitz
(Chairman)
CEA Radowsky
(Chief Executive Officer)
Cape Town
9 March 2012
STATEMENT OF CHANGES IN EQUITY
Consolidated (R`000)
As at As at
31 December 30 June
2011 2010 2011
(Unaudited) (Unaudited) (Audited)
Share capital 1 777 1 777 1 777
Share premium
Opening balance 25 836 25 847 25 847
Shares repurchased - (11) (11)
Closing balance 25 836 25 836 25 836
Treasury shares
Opening balance (1 762) (2 216) (2 216)
Proceeds from delivery of employee
share options - 371 454
Closing balance (1 762) (1 845) (1 762)
Other reserves
Opening balance 968 900 900
Share-based payment expense - 29 68
Closing balance 968 929 968
Retained earnings
Opening balance 241 294 209 558 209 558
Profit for the period 16 564 21 749 39 930
Preference dividends paid (8) (8) (17)
Ordinary dividends paid (10 643) (8 178) (8 177)
Closing balance 247 207 223 121 241 294
Total capital and reserves 274 026 249 818 268 113
ABRIDGED STATEMENT OF CASH FLOWS
Consolidated (R`000)
Six months ended Year ended
31 December 30 June
2011 2010 2011
(Unaudited) (Unaudited) (Audited)
Operating profit before
working capital changes 26 844 36 701 66 317
Working capital changes (6 195) (2 249) (11 509)
Interest received 3 957 4 450 8 798
Interest paid (126) (122) (302)
Dividends paid (10 651) (8 186) (8 194)
Dividends received 13 12 12
Normal tax paid (3 107) (7 836) (17 002)
Secondary tax on companies paid (1 073) (826) (826)
Net cash inflows from operations 9 662 21 944 37 294
Additions to property, plant
and equipment (14 958) (14 726) (31 191)
Proceeds from disposal of
property, plant and equipment 119 198 672
Proceeds on disposal of
discontinued operations 5 412 - -
Net cash outflows from
investing activities (9 427) (14 528) (30 519)
Proceeds from delivery of
shares by share trust - 371 454
Repurchase of own shares - (11) (11)
Net cash inflows from
financing activities - 360 443
Net increase in cash and
cash equivalents 235 7 776 7 218
Cash and cash equivalents at
the beginning of the period 148 849 141 631 141 631
Cash and cash equivalents at
the end of the period 149 084 149 407 148 849
OTHER INFORMATION
Capital commitments
(Authorised - not contracted for) 34 075 6 011 53 436
Gross profit margin from
continuing operations 54.5% 54.4% 56.3%
Operating profit margin from
continuing operations 7.4% 9.3% 8.7%
Retail segment operating
profit margin from continuing operations 7.9% 10.0% 9.2%
STATEMENT OF COMPREHENSIVE INCOME
Consolidated (R`000)
Six months ended Year ended
31 December 30 June
% 2011 2010 2011
change (Unaudited) (Unaudited) (Audited)
Continuing
operations
Revenue 4.9% 286 439 273 050 518 796
Turnover 4.9% 280 940 267 697 508 078
Cost of sales (127 770) (122 039) (221 987)
Gross profit 5.2% 153 170 145 658 286 091
Employment costs (49 193) (45 775) (91 672)
Occupancy costs (37 090) (34 209) (70 729)
Depreciation and amortisation (9 568) (7 437) (15 595)
Other operating costs (38 016) (34 341) (65 600)
Rental income 733 249 605
Royalties 602 503 1 009
Management fee income 194 139 294
Operating profit (16.0%) 20 832 24 787 44 403
Dividends received 13 12 12
Interest received 3 957 4 450 8 798
Interest paid (126) (122) (302)
Profit before tax (15.3%) 24 676 29 127 52 911
Income tax expense (8 112) (9 208) (16 116)
Profit for the period
from continuing
operations (16.8%) 16 564 19 919 36 795
Profit from discontinued
operations (net of income tax) - 1 830 3 135
Profit for the period (23.8%) 16 564 21 749 39 930
Other comprehensive income
Total comprehensive
income for the period 16 564 21 749 39 930
Profit attributable to:
Ordinary and `N`
ordinary shareholders 16 556 21 741 39 913
Preference shareholders 8 8 17
Profit for the period 16 564 21 749 39 930
Total comprehensive
income attributable to:
Ordinary and `N`
ordinary shareholders 16 556 21 741 39 913
Preference shareholders 8 8 17
Total comprehensive
income for the period 16 564 21 749 39 930
Reconciliation of
headline earnings
Profit attributable to equity holders 16 556 21 741 39 913
Continuing operations 16 556 19 911 36 778
Discontinued operations - 1 830 3 135
Adjusted for:
(Profit)/loss on
disposal of property,
plant and equipment (80) (4) 673
Profit on sale of
discontinued operations - - (122)
Headline earnings 16 476 21 737 40 464
Continuing operations 16 476 19 907 37 451
Discontinued operations - 1 830 3 013
Basic earnings per
ordinary share (cents) (24.2%) 80.9 106.7 195.6
Continuing operations 80.9 97.7 180.2
Discontinued operations - 9.0 15.4
Headline earnings per
ordinary share (cents) (24.6%) 80.5 106.7 198.3
Continuing operations 80.5 97.7 183.5
Discontinued operations - 9.0 14.8
Diluted basic earnings per
ordinary share (cents) (24.3%) 80.5 106.3 194.8
Continuing operations 80.5 97.3 179.5
Discontinued operations - 9.0 15.3
Diluted headline earnings
per ordinary share (cents)(24.7%) 80.1 106.3 197.5
Continuing operations 80.1 97.3 182.8
Discontinued operations - 9.0 14.7
Weighted average number
of equity shares on
which earnings per share
is based (000) 20 466 20 371 20 410
Weighted average number
of equity shares on which
diluted earnings per share
is based (000) 20 575 20 449 20 487
STATEMENT OF FINANCIAL POSITION
Consolidated (R`000)
As at As at
31 December 30 June
2011 2010 2011
(Unaudited) (Unaudited) (Audited)
Assets
Non-current assets 86 243 75 471 83 855
Property, plant and equipment 75 161 65 157 69 328
Investment property 5 718 3 511 5 776
Intangible assets 1 061 1 317 1 455
Other investments 576 576 576
Deferred taxation 3 727 4 910 6 720
Current assets 237 266 226 001 243 827
Inventories 75 590 62 349 71 099
Amounts receivable from holding company 36 661 282
Trade and other receivables 11 642 13 584 21 562
Forward exchange contracts 910 - -
Income tax receivable 4 - 2 035
Cash and cash equivalents 149 084 149 407 148 849
Total assets 323 509 301 472 327 682
Equity and liabilities
Capital and reserves 274 026 249 818 268 113
Share capital 1 777 1 777 1 777
Share premium 25 836 25 836 25 836
Treasury shares (1 762) (1 845) (1 762)
Other reserves 968 929 968
Retained earnings 247 207 223 121 241 294
Non-current liabilities 11 530 12 041 16 099
Post-retirement liability 3 197 3 292 3 251
Accrued operating lease liability 7 143 8 749 9 577
Deferred taxation 1 190 - 3 271
Current liabilities 37 953 39 613 43 470
Provisions 420 514 467
Trade and other payables 36 426 35 625 42 283
Forward exchange contracts - 2 180 602
Income tax payable 1 107 1 294 118
Total equity and liabilities 323 509 301 472 327 682
SEGMENTAL REPORTING
Consolidated (R`000)
Six months ended Year ended
31 December 30 June
2011 2010 2011
(Unaudited) (Unaudited) (Audited)
Revenue
Total external retail revenue 281 736 268 339 509 381
Retail segment revenue 282 727 269 435 511 601
Intersegment revenue earned
from continuing operations (991) (605) (1 548)
Intersegment revenue earned
from discontinued operations - (491) (672)
Total external property revenue 733 249 605
Property segment revenue 2 695 2 318 4 758
Intersegment revenue earned
from continuing operations (1 962) (1 810) (3 635)
Intersegment revenue earned
from discontinued operations - (259) (518)
Dividends received 13 12 12
Interest received 3 957 4 450 8 798
Segment revenue from
continuing operations 286 439 273 050 518 796
Total external manufacturing revenue - 17 214 34 990
Manufacturing segment revenue - 17 291 35 067
Less: intersegment revenue - (77) (77)
Segment revenue from
discontinued operations - 17 214 34 990
Total group revenue 286 439 290 264 553 786
Segment operating profit/(loss)
Retail segment profit -
continuing operations 22 069 26 749 46 906
Property segment profit -
continuing operations 869 192 1 331
Group Services operating loss
- continuing operations* (2 106) (2 154) (3 834)
Group profit from continuing operations 20 832 24 787 44 403
Manufacturing operating profit
- discontinued operations - 2 541 4 354
Total group operating profit 20 832 27 328 48 757
Depreciation and amortisation
Retail 9 469 7 359 15 416
Property 99 65 179
Segment depreciation and amortisation
from continuing operations 9 568 7 424 15 595
Manufacturing - discontinued operation - 138 259
Total depreciation and amortisation 9 568 7 562 15 854
Segment assets
Retail 217 312 178 051 202 446
Property 13 156 10 412 11 751
Group Services* 93 041 99 892 102 113
Segment assets from
continuing operations 323 509 288 355 316 310
Manufacturing - discontinued operation - 13 117 11 372
Total segment assets 323 509 301 472 327 682
Segment liabilities
Retail 44 956 41 691 50 330
Property 2 184 30 1 931
Group Services* 2 343 4 903 4 196
Segment liabilities from
continuing operations 49 483 46 624 56 457
Manufacturing - discontinued operation - 5 030 3 112
Total segment liabilities 49 483 51 654 59 569
Capital expenditure
Retail 13 867 14 396 30 559
Property 1 091 330 602
Capital expenditure from
continuing operations 14 958 14 726 31 161
Manufacturing - discontinued operation - - 30
Total capital expenditure 14 958 14 726 31 191
* Group Services include corporate costs.
NOTES
1 Basis of preparation
These interim financial statements have been prepared in terms of the South
African Companies Act (71 of 2008 as amended), IFRS, IAS 34: Interim Financial
Reporting, the JSE Listings Requirements and the AC 500 Standards as issued by
the Accounting Practices Board or its successor. These interim financial
statements have been prepared under the supervision of the group financial
director, Damian Johnson CA(SA). These results have not been reviewed or
reported on by the company`s auditors, KPMG Inc.
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 2011.
3 Reclassification
The group presented the sale of its manufacturing division as a discontinued
operation in the previous year, and where applicable, certain comparative
information has been reclassified.
4 Preference dividend
A dividend on the 6% cumulative preference shares for the six months ended 31
December 2011 in the amount of R8 400 was declared on 10 December 2011 and
paid on 23 December 2011.
Directors: ML Krawitz+ (Chairman), CEA Radowsky (Chief Executive Officer),
DS Johnson, JC O`Brien, PM Naylor*, RV Orlin*, RW Rees (UK)*
+Non-executive *Independent non-executive
Registered office
Rex Buildings, 263 Victoria Road, Salt River, Cape Town, 7925
Secretary
A A Hodgkinson
Transfer secretaries
Computershare Investor Services (Pty) Limited,
70 Marshall Street, Johannesburg, 2001
Sponsor
Java Capital
Websites
www.queenspark.com
www.rextrueform.com
Date: 08/03/2012 15:19:01 Produced by the JSE SENS Department.
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