Busby takes a bow with heavy boost in earnings
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CAPE TOWN Luggage and accessories retailer House of Busby ranked among the JSE Securities Exchange SA`s top performers on Friday as its shares surged 29c or 7,8% to 400c after it said forthcoming interim earnings would show strong growth over the previous period.
Management said the company`s earnings and headline earnings for the six months to December would be 70%- 90% higher than for the same period in 2003. The main reason is a substantial increase in revenue, although the company`s gross margins remain under pressure because of an `extremely competitive retail environment`, it said.
In the year to June the group grew headline earnings a share 7% to 32,5c compared with the same period in 2003 on a 4% increase in turnover. It attributed the slow growth in revenue partly to the deflationary environment for its products. The group`s operations are affected by sales to foreign tourists, whose numbers and spending power are reduced by the strong rand.
Early in the current financial year the group opened the first two outlets of a new chain of accessories stores called Claire`s Stores, under licence from the US .
It has also added more units to its distribution business, which it said should contribute to earnings in the medium to long term.
Busby shares hovered close to a 12-month peak of 420c last week.
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