| Wed 14 Jul 2004, 9:33 | | TRADING STATEMENT FOR THE FIRST QUARTER |
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EDGARS CONSOLIDATED STORES LIMITED - TRADING STATEMENT FOR THE FIRST QUARTER
ENDED 3 JULY 2004
EDGARS CONSOLIDATED STORES LIMITED
`Edcon`
(Reg. No. 1946/022751/06)
(Incorporated in the Republic of South Africa)
Share Code : ECO ISIN Code : ZAE000018388
TRADING STATEMENT FOR THE FIRST QUARTER ENDED 3 JULY 2004
At Edcon`s 58th Annual General Meeting held earlier today Chief Executive Steve
Ross, updated the meeting on trading for the past three months as follows:
`The environment of low interest rates, real wage increases and improved
consumer confidence, was positive for all retailers during the quarter under
review. Against this background, Edcon, with its offerings of well-priced
merchandise and appropriate fashion, continued to gain market share during this
period.
Total sales for the first fourteen weeks of this financial year have exceeded
internal targets and rose by 25% when compared with the same period last year.
Edgars` sales increased by 24% while Jet`s sales were up 28%, with these chains
representing 90% of group sales. The growth in average retail trading space was
just under 2% in both chains. Sales in CNA improved steadily over the period,
and it reported a 16% sales increase, while Super Mart recorded a turnover
decline of 20%, as new systems were introduced and merchandise receipts frozen.
Boardmans was only acquired on 1 April 2004 and consequently its first three
months have been used to integrate it onto Edcon`s IT platforms and retail
methodologies.
As anticipated, economies of scale and efficiencies throughout the business
continued to boost profitability, resulting in headline earnings per share for
the first three months running well ahead of budget. Encouragingly, collections
are above those incorporated in internal plans, and, as a result, the debtors
books are in a better condition than at the same time last year. After the
particularly robust winter turnover, seasonal merchandise has been cleared.
Looking forward, the Board is confident that Group sales will continue to show
meaningful growth. On this strong performance, headline earnings per share for
the half year to September 2004 are expected to be between 60 and 80% higher
than those reported for the first six months of the previous year. The effect
of the scheduled inclusion of a non-comparable additional trading week has been
to boost these percentage growth numbers by approximately 20 percentage points.`
In terms of the JSE Securities Exchange South Africa listing requirements this
trading statement has been examined by the external auditors. Consequently,
Ernst and Young has reported that this trading statement has been properly
completed on the basis of reasonable assumptions and is consistent with Group
Accounting Policies. Their full report is available for inspection at the
Registered Office of the Company.
Regarding the recent disposal by SABMiller plc of its 21% equity interest in
Edcon, Mr Ross advised that `he was particularly pleased with the outcome of the
accelerated bookbuild exercise, in terms of which the offering was covered over
four times. This sizeable holding was sold at R144 per share, representing a
discount of only 2.7% to the closing price of Edcon shares prior to the
announcement of the disposal. The Edcon share price closed yesterday at R152.50,
recovering not only the dividend of 521 cents, paid out on 5 July 2004, but also
the discount arising on the sale by SABMiller plc.
The transfer of 11,2 million Edcon shares away from the single shareowner
SABMiller has broadened the shareowner base, with 51% of the purchasers in South
Africa, 24% in the United Kingdom, 19% in the United States and 6% to the rest
of the world. The removal of this overhang is expected to reduce volatility in
the share and increase tradeability.
14 July 2004
Johannesburg
Sponsor
Cazenove
Date: 14/07/2004 09:10:05 AM Produced by the JSE SENS Department
