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Edcon - Trading update for the first quarter ended 2 July 2005
EDGARS CONSOLIDATED STORES LIMITED
`Edcon`
(Reg. No. 1946/022751/06)
(Incorporated in the Republic of South Africa)
ISIN Code: ZAE000018388
Share Code: ECO
TRADING UPDATE FOR THE FIRST QUARTER ENDED 2 JULY 2005
At Edcon`s 59th Annual General Meeting today, Chief Executive Steve Ross updated
the meeting on trading for the past three months as follows:
Consumer spending remained buoyant during the quarter under review as consumer
confidence continued to benefit from low interest rates and real wage growth.
Against this background, Edcon, with its offerings of well-priced merchandise
and appropriate fashion, continued to record exceptional sales growth for the
first thirteen weeks of this financial year. Total sales exceeded internal
targets and rose by 25% when compared with the same period last year.
By chain, sales growth rates were as follows:
Sales increase Average retail
for quarter ended space change
2 July 2005
% %
Edgars (incl. Boardmans) 19 11
CNA 27 1
Jet 31 6
Jet Mart 85 20
Edcon Group 25 10
These sales were achieved with 3% price inflation in Edgars while Jet`s
deflation was 23%.
Inventory levels are appropriate in relation to projected future sales and
winter seasonal merchandise is at lower levels than at the same time last year.
The debtors` book remains in a sound condition. Collections for the quarter
were ahead of budget and at billing in June 2005, 86% of the total debtors` book
was current and able to buy, versus 87% in June last year.
As earnings for the first three months are in line with budget, the Edcon Board
believes that the earnings guidance provided in May 2005 for the forthcoming
year remains appropriate, namely that: `shareowners should expect another
meaningful rise in earnings, above that of the sales growth`. National
clothing, footwear and textile sales are expected to grow in real terms in the
year ahead, albeit at a slower pace than last year, but Edcon sales will be
boosted by the opening of an estimated additional 12% average retail space
(including the Topic acquisition). It should also be noted that this financial
year contains one less trading week than last. This contributed 2% of sales and
4% of earnings in the year to March 2005.
Johannesburg
13 July 2005
Sponsor:
JP Morgan Equities Limited
Namibian Sponsor
Irwin Jacobs Greene (Pty) Limited
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