| Fri 10 Mar 2006, 12:30 | | Rex Trueform - Interim group results for the six m |
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RTN RTO RTOP
RTO
Rex Trueform - Interim group results for the six months ended 31 December 2005
Rex Trueform Clothing Company Limited
(Registration number 1937/009839/06)
Share codes: RTO - RTN - RTOP
ISIN: ZAE000006144 - ZAE000009700 - ZAE000006151
(Incorporated in the Republic of South Africa)
INCOME STATEMENT
Consolidated (R"000)
Six months ended Year ended
December 31 June 30
2005 2004 2005
Restated Restated
(Unaudited) (Unaudited) (Audited)
Continuing operations
Sales 151 592 163 774 312 549
Net operating income 4 663 16 430 23 815
Net interest received 1 571 2 232 4 616
Net income 6 234 18 662 28 431
Income/(loss) from
associated company 30 26 (101)
Income before taxation 6 264 18 688 28 330
Taxation 2 827 6 381 9 997
Profit from continuing operations 3 437 12 307 18 333
Discontinued operation
Loss from discontinued operation (4 553) (1 644) (39 880)
(Loss)/profit (1 116) 10 663 (21 547)
Preference dividends 8 8 16
Net (loss)/income
attributable to ordinary
and "N" ordinary shareholders (1 124) 10 655 (21 563)
Reconciliation of headline
earnings
Attributable (loss)/earnings (1 124) 10 655 (21 563)
Loss arising from discontinuance 666 - 34 037
Headline (loss)/earnings (458) 10 655 12 474
Headline (loss)/earnings
per share (cents) (2.3) 53.0 62.0
(Loss)/earnings per share (cents) (5.6) 53.0 (107.3)
Diluted headline (loss)/earnings
per share (cents) (2.2) 51.6 60.5
Diluted (loss)/earnings
per share (cents) (5.4) 51.6 (104.5)
Weighted average number of equity
shares on which earnings per share
is based (000) 20 105 20 105 20 105
Number of equity shares in issue
(000) 20 105 20 105 20 105
Weighted average number of equity
shares used for diluted earnings
per share (000) 20 599 20 642 20 627
ABRIDGED CASH FLOW STATEMENT
Cash generated/(utilised) by
operations 5 895 19 756 (4 373)
Working capital changes 533 (5 052) 25 835
Interest received (net) 1 571 2 232 4 616
Taxation paid (3 624) (3 795) (8 125)
Dividends paid (5 035) (4 029) (4 037)
Net cash (outflow)/inflow
from operations (660) 9 112 13 916
Additions to property, plant
and equipment (12 274) (9 685) (17 929)
Proceeds on disposal of property,
plant and equipment - 622 637
Other (47) (91) 1
Net cash outflows from
investing activities (12 321) (9 154) (17 291)
Net decrease in cash (12 981) (42) (3 375)
Cash at the beginning of the
period 58 647 62 022 62 022
Cash at the end of the period 45 666 61 980 58 647
OTHER INFORMATION
Capital expenditure 12 276 9 685 17 929
Capital commitments
Contracted for 3 993 1 571 5 881
Authorised - not contracted for 3 502 2 034 1 878
Current ratio 4.9 7.7 4.4
SEGMENTAL REPORTING
Turnover
Manufacturing 91 100 121 698 215 689
Less: intersegment sales (69 299) (76 969) (139 051)
External sales 21 801 44 729 76 638
Retail 140 220 148 550 286 777
Total 162 021 193 279 363 415
Net operating (loss)/income
Manufacturing (7 844) (1 531) (50 803)
Retail 6 530 13 628 22 367
Intergroup 1 424 1 804 2 148
Total 110 13 901 (26 288)
Depreciation included in net
operating (loss)/income
Manufacturing 701 1 834 3 253
Retail 5 084 4 110 8 867
Total 5 785 5 944 12 120
Total segment assets
Manufacturing 52 586 74 570 59 844
Retail 70 006 69 736 64 274
Cash 45 666 61 980 58 647
Intergroup (1 501) (3 236) (2 635)
Total 166 757 203 050 180 130
Total segment liabilities
Manufacturing (14 776) (15 880) (22 928)
Retail (12 757) (9 812) (11 668)
Total (27 533) (25 692) (34 596)
Capital expenditure
Manufacturing 801 996 1 057
Retail 11 475 8 689 16 872
Total 12 276 9 685 17 929
BALANCE SHEET
Consolidated (R"000)
December 31 June 30
2005 2004 2005
Restated Restated
(Unaudited) (Unaudited) (Audited)
Assets
Non-current assets 60 888 50 775 54 708
Property, plant and equipment 49 311 46 700 42 820
Investments (unlisted) 2 249 2 318 2 446
Deferred taxation 9 328 1 757 9 442
Current assets 105 869 152 275 125 422
Inventory 41 855 59 657 40 273
Debtors 16 553 30 616 25 671
Taxation 1 795 22 831
Cash 45 666 61 980 58 647
Total assets 166 757 203 050 180 130
Equity and liabilities
Capital and reserves 139 224 177 358 145 534
Share capital 1 776 1 776 1 776
Share premium 22 758 22 758 22 758
Non-distributable reserves 222 (13) 381
Distributable reserves 114 468 152 837 120 619
Non-current liabilities
Post-retirement liability 6 078 5 850 6 191
Current liabilities 21 455 19 842 28 405
Provisions 928 - 3 851
Accounts payable 20 474 18 281 24 298
Taxation 53 1 561 -
Amount owing to holding company - - 256
Total equity and liabilities 166 757 203 050 180 130
STATEMENT OF CHANGES IN EQUITY
Share capital 1 776 1 776 1 776
Share premium 22 758 22 758 22 758
Non-distributable reserves
Opening balance 381 (147) (147)
IFRS: share-based payments 67 113 162
Foreign exchange rate changes (226) 21 366
222 (13) 381
Distributable reserves
Opening balance 120 619 141 121 141 121
IFRS: property, plant
and equipment - 5 147 5 147
IFRS: share-based payments - (65) (65)
Opening balance restated 120 619 146 203 146 203
(Loss)/profit after taxation (1 116) 10 663 (21 547)
Dividends (5 035) (4 029) (4 037)
114 468 152 837 120 619
Total capital and reserves 139 224 177 358 145 534
NOTES
1. Basis of preparation
These interim group financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) with effect from 1 July
2005. The opening balance sheets of 1 July 2004 and 1 July 2005, as well as the
comparative income statements, were restated having considered the transitional
arrangements provided by IFRS 1: First-time adoption of International Financial
Reporting Standards. The information presented has neither been audited nor
reviewed by the external auditors.
2. Statement of compliance
The condensed consolidated interim financial statements have been prepared in
accordance with International Financial Reporting Standards (IFRS) for interim
financial statements.
These are the group"s first IFRS financial statements for part of the period
covered by the first IFRS financial statements and IFRS 1: First- time adoption
of IFRS has been applied. The condensed consolidated interim financial
statements do not include all information required for full financial
statements. An explanation of how the transition from previous GAAP to IFRS has
affected the group"s financial statements is detailed in note 3. There was no
impact on the reported cash flows of the group.
3. Accounting policies
The accounting policies applied in these interim statements are consistent with
those applied in the preparation of the group"s annual financial statements for
the year ended 30 June 2005, except for the policies adopted to comply with
IFRS as noted below:
3.1 First-time adoption of International Financial Reporting Standards (IFRS 1)
The group has elected the following exemptions:
Property, plant and equipment: The group has elected to use the fair value on 1
July 2004 as deemed cost on transition for certain properties.
Share-based payments: The group has elected to expense all share-based payments
vested after 7 November 2002.
3.2 The value of adjustments as a result of the adoption of IFRS is disclosed
below and in the statement of changes in equity:
December 31 June 30
2005 2004 2005
Balance sheet
Property, plant and equipment 5 486 5 486 5 486
Deferred tax (339) (339) (339)
5 147 5 147 5 147
Income statement
Operating profit (67) (49) (97)
3.3 Property, plant and equipment (IAS 16): The useful lives and residual
values of assets are reviewed annually.
Share-based payments (IFRS 2): Share- based payments are measured at fair value
and the cost recognised in the income statement over the vesting period.
Share options granted after November 2002 were valued and expensed to the
income statement, with the corresponding credit to equity.
4. Discontinued operation
An agreement was concluded in June 2005 in terms of which the company closed
its Salt River factory. A lease agreement has been entered into with an outside
party to lease the property and plant.
December 31 June 30
2005 2004 2005
Sales 10 429 29 505 50 846
Loss on discontinued operation (3 887) (2 529) (8 230)
Loss arising from discontinuance (666) - (41 873)
Loss before taxation (4 553) (2 529) (50 103)
Taxation - (885) (10 223)
Loss from discontinued operation (4 553) (1 644) (39 880)
5. Preference dividend
A dividend on the 6% cumulative preference shares for the six months ended 31
December 2005 in the amount of R8 400 was declared in December 2005 and paid on
27 December 2005.
COMMENT
Results for the half year to December 2005 fell short of expectations.
Queenspark"s turnover was 10% below target and 5,6% below that of the previous
comparable period. However, unit volumes in comparable stores increased during
the period. The decrease in turnover was partly the result of a 25-week trading
period compared with a 26-week period in the previous year. The operating
profit of Queenspark decreased by 52% on the comparable period of the previous
year.
Although gross profit margins were maintained, operating profit has been
affected by an increase in occupancy and employee costs relative to the reduced
turnover. Furthermore, increased overhead costs, largely related to the
provision of an expanded infrastructure and in particular, information
technology expenditure to accommodate a higher level of activity, adversely
affected net operating income.
Ongoing challenges in the manufacturing sector of the business had a severely
detrimental effect on group profit. The downsized Salt River manufacturing
facility continued to operate at a loss, as did the re-organised production
facility in Atlantis which has taken longer than expected to produce the
required level of performance.
Interest earned has decreased due to lower cash resources resulting from the
major retrenchment costs incurred late in the previous financial year at the
Salt River factory, the capital expenditure incurred in Queenspark and the
lower interest rate currently earned.
Queenspark should benefit during the coming trading period from an improved
planning and distribution system, and the provision of enhanced credit
facilities for customers. Three new stores were opened and a further two stores
will open during the second half of the financial year.
The Salt River manufacturing facility was closed at the end of December and,
given a satisfactory supply of electricity, an improved result is expected from
the Atlantis facility during the second half of the year.
Overall the group should benefit from the continuing buoyancy in consumer
spending and some improvement in profitability is expected during the second
half of the year.
Signed on behalf of the board:
GM Thomas (Chairman) CEA Radowsky (Chief Executive Officer)
Cape Town
8 March 2006
Transfer Secretaries:
Computershare Investor Services 2004 (Pty) Ltd, 70 Marshall Street,
Johannesburg, 2001
Registered Office:
Rex Buildings, 263 Victoria Road, Salt River, Cape Town, 7925
Sponsor:
Nedbank Capital
Directors:GM Thomas (Chairman), CEA Radowsky (Chief Executive Officer),
CLR Hirschsohn, ML Krawitz, PM Naylor, JC O"Brien, PE Shub
Secretary: African & Overseas Enterprises Limited
Date: 10/03/2006 12:30:16 PM Produced by the JSE SENS Department
