| Wed 7 Jan 2004, 17:48 | | Trading Update and Cautionary Announcement |
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Tradehold Limited - Trading Update and Cautionary Announcement
Tradehold Limited
(Incorporated in the Republic of South Africa)
(Registration number 1970/009054/06)
Share code: TDH
ISIN: ZAE000026902
("Tradehold" or "the company")
UPDATED TRADEHOLD ANNOUNCEMENT
Shareholders" attention is drawn to a statement issued by Tradehold"s
subsidiary, Brown & Jackson plc, on 7 January 2004 and which appears below.
When announcing Tradehold"s interim results for the six months to 31 August
2003, the company"s board of directors expressed its confidence that, in the
light of the improved results for the review period, Tradehold would be in a
position to declare a profit for the full year. However, in the light of the
statement below by Brown & Jackson, which represents not only Tradehold"s
largest investment by far but also its biggest source of income, this
expectation for the financial year to 28 February 2004 will now not be realised.
"BROWN & JACKSON plc
TRADING UPDATE
Total sales for the 13 weeks ending 3 January 2004 were down 4,5% compared to
the same period last year. Like for like sales for the same period were down
6,3%. Margins were 1,4% higher than last year reflecting reduced markdowns in
the period.
December sales were significantly behind expectations with like-for-like sales
down 8,5%, aggravated by the poor performance of our High Street outlets, but
again, with stronger margins. We traded at full price in December. Stock levels
are higher than last year in the main because of a planned build in core
categories.
January sales to date are in line with expectations with significantly improved
margins, reflecting substantially lower markdowns than last year.
The new brand of "instore" achieved LFL sales growth of 13% over the same period
and 12% in December. Margins were also stronger than at Poundstretcher. We are
delighted with this performance and "instore" will be progressively rolled out
starting in spring 2004 with a three-year objective of replacing the
Poundstretcher fascia.
Overall, the difficult trading in December, in particular in our older High
Street estate, will mean the Group will fall significantly short of market
expectations for the full year. Trading in December represents a significant
proportion of Brown & Jackson"s sales and the larger part of its profitability
for the year. This factor, taken together with an indicated over-run on
distribution costs, means that the Board considers it unlikely that the company
will report a profit in this financial year. The Board believes that Brown &
Jackson"s recovery programme has been delayed by a year. However, we are more
optimistic that the benefits of the turnaround will start to be more fully
reflected in 2004/05.
Commenting on these developments, Chief Executive Angus Monro said: "Christmas
trading was disappointing, however, these are early days in the turnaround of
the business. We are continuing to make improvements to our stores processes and
products. The "instore" pilot stores have already shown a marked improvement
in sales growth compared to last year and the strategic direction for the
business is clear. Our commitment to building on our progress to date gives us
confidence in the long term prospects for the Group."
Shareholders are advised that the company"s results for the financial year ended
28 February 2004 will be published on or about 23 April 2004 and shareholders
are advised to exercise caution in the mean time when dealing in the company"s
securities on the JSE Securities Exchange South Africa.
For and on behalf of the Board
Dr C H Wiese
Chairman
7 January 2004
Sponsor
Barnard Jacobs Mellet Corporate Finance (Pty) Ltd
Date: 07/01/2004 05:37:03 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
