| Thu 28 Apr 2005, 16:08 | | Back In The Black After Three Years |
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Tradehold Back In The Black After Three Years
Tradehold Limited
(Registration number 1970/009054/06)
JSE share code: TDH ISIN: ZAE000026902
After three successive years of operational losses while restructuring and re-
aligning its retail operations in the UK, Tradehold has returned to
profitability in the year to end February 2005. It has declared a profit before
tax and exceptional items of GBP16,35m (2004: a loss of GBP7,93m) on turnover
that was marginally lower at GBP276,09m (2004: GBP280,28m).
To conserve capital for the continued rebuilding of the business the board is
not recommending the payment of a dividend.
During the past three years Tradehold has shed a number of retail businesses in
the UK, and it is now invested only in the listed UK retail group Brown &
Jackson plc (B&J), in which it holds a controlling 54,5% interest, and in
Tradegro UK, a wholly-owned subsidiary owning a portfolio of retail properties.
Representing by far its biggest investment, Tradehold and its fortunes are
closely linked to those of B&J which has also returned to profitability after
two years of a five-year turnaround programme under an experienced team of
retailers who took charge of the business at the end of 2002.
Tradehold has now been able to produce a clean set of financials with no
hangovers from previous years. It ended the year with positive cash flow from
operations, substantially reduced liabilities - from GBP78,58m to GBP61,16m -
and GBP29,21m in cash and cash equivalents. It declared a net profit of GBP9,20m
(2004: a net loss of GBP7,43m). Earnings per share before exceptional items were
2,4p (2004: a loss of 1,5p).
Chairman Dr Christo Wiese said he was optimistic about the outlook for the new
financial year. `I believe solid foundations are now in place for sustainable
future growth. The fact that B&J has turned the corner after only two years into
a five-year recovery programme is most encouraging. The business has been
extensively remodelled and is unrecognisable from what it was when the new team
took over. It is taking enormous operational strides and its trading and
financial performance is much improved.`
During the review period B&J formally launched a new brand, `...instore`, which
in time is set to overtake its present major brand, Poundstretcher, and position
B&J as a formidable player in the UK`s value discount market. After testing the
concept thoroughly the previous year, 78 of the more than 300 Poundstretcher
stores were converted to `...instore` with a further 50 conversions and ten new
outlets planned for the 2006 financial year.
An equally important development during the year has been the construction of a
state-of-the art distribution centre replacing the group`s four outdated smaller
facilities.
Wiese said the new distribution centre, which also incorporates B&J`s head
office, formed a key component of the turnaround programme. `Its much enlarged
capacity enables management to introduce and expand merchandise ranges and add a
substantial number of new stores to the present estate. Its sophisticated
systems will also ensure tighter control of operating costs.`
Ends
Note to editors: As the operations of Tradehold`s subsidiaries are conducted in
pound sterling and because of the distortion caused by the fluctuating value of
rand, the company reports its results in the former currency. However, in the
financial statements rand equivalents are provided to comply with regulatory
requirements.
