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ECO
ECO
Edcon - Trading update for the three months ended 8 July 2006
EDGARS CONSOLIDATED STORES LIMITED
"Edcon"
(Reg. No. 1946/022751/06)
(Incorporated in the Republic of South Africa)
ISIN: ZAE000068649
Share Codes
JSE: ECO
NSX: ECN
TRADING UPDATE FOR THE THREE MONTHS ENDED 8 JULY 2006
At Edcon"s 60th Annual General Meeting today, Chief Executive Steve Ross updated
the meeting on trading for the past three months as follows:
Consumer spending remains strong and retailers are still benefiting from low
interest rates and real wage growth. As anticipated, the quarter under review
has seen a mild easing of retail sales growth from last year"s exceptionally
high levels.
The Edcon Board is pleased to report that total sales for the first three months
have been in line with internal expectations and rose by 15% compared with the
same period last year.
By chain, sales growth rates were as follows:
Sales Average
increase selling price
inflation
%
%
Edgars 15 1
CNA 31 9
Department Stores Division 16 1
Discount Division 13 (1)
Edcon Group 15 0
Pleasingly, having positioned all the chains optimally over the past few years,
they have all achieved gross profit growth in excess of their respective sales
increase. Similarly, diluted headline earnings per share for the first three
months rose at a faster rate than sales. This was accomplished with a rise of
12% in average retail space for the quarter.
Inventory levels are appropriate in relation to projected future sales and
seasonal winter merchandise has been cleared.
Collections for the quarter exceeded budget and the quality of the debtors book
continues to be sound and demonstrates a sense of responsibility from consumers.
At the June 2006 billing date, as anticipated, 84% of the debtors" book was
current and able to buy, compared with 86% in June last year.
As sales and earnings for the quarter were in line with management expectations,
the Edcon Board believes that, assuming no material changes in the macroeconomic
environment, the earnings guidance provided in our 2006 annual report remains
appropriate for the half year to September 2006, namely that "shareowners can
expect another meaningful rise in earnings, ahead of the sales growth".
This update has not been reviewed and reported on by Edcon"s external auditors.
Johannesburg
12 July 2006
Sponsor: Merrill Lynch South Africa (Pty) Limited
Date: 12/07/2006 09:25:17 AM Produced by the JSE SENS Department
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