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ECO
ECO
Edgars Consolidated Stores Limited - Trading update for the quarter ended
December 2005
Edgars Consolidated Stores Limited
"Edcon"
(Reg. No. 1946/022751/06)
(Incorporated in the Republic of South Africa)
ISIN Code : ZAE000068649
Share Codes
JSE : ECO
NSX : ECN
TRADING UPDATE FOR THE QUARTER ENDED DECEMBER 2005
Consumer spending remained buoyant during the quarter under review, boosted by
sustained high levels of consumer confidence, resulting from low interest rates
and real wage increases. Against this background, the Edcon Board is pleased to
report healthy sales growth of 21% for the quarter, when compared with the same
13 week period last year.
By chain, sales growth rates were as follows:
Sales increase Contribution to Average retail
for quarter sales space increase
ended
31 December % %
2005
%
Edgars 21 52 10
CNA 25 7 1
Jet 17 37 8
Jet Mart 53 4 16
Edcon Group 21 100 11
These results were achieved with inflation at only 3% in Edgars and deflation of
18% in Jet. Pleasingly, all major merchandise categories recorded strong growth
with sales of cellular products exceeding expectations. As the margin earned on
these products is lower than the average margin for clothing and footwear, this
contributed to the slower rate of growth in gross profit of 17% for the quarter.
Inventory levels, at only 4% above last year, are current and well positioned in
relation to projected future sales. The Group"s moving annual stockturn
improved from 5,9 to 6,0 times, reflecting further improvements in logistics
management.
Collections for the quarter were ahead of budget and the quality of the debtors"
book continues to be sound. At the December 2005 billing date, as anticipated,
87% of the debtors" book was current and able to buy, compared with 89% in 2004.
Moving annual bad debt ratios were within targeted levels.
As sales and earnings for the quarter were in line with management expectations,
the Edcon Board believes that the earnings guidance provided in November 2005
for the financial year to March 2006 remains appropriate, namely that the Group
"should deliver another meaningful rise in attributable earnings, along the
lines of the growth in sales, for the year as a whole."
This update has not been reviewed and reported on by Edcon"s external auditors.
Johannesburg
12 January 2006
Sponsor :
Merrill Lynch South Africa (Pty) Ltd
Namibian Sponsor :
Irwin Jacobs Greene (Pty) Limited
Date: 12/01/2006 09:00:13 AM Produced by the JSE SENS Department
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