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RTO RTN RTOP
RTO
Rex Trueform Clothing Company Limited - Interim Group Results for the six
months ended 31 December 2006
Rex Trueform Clothing Company Limited
(Incorporated in the Republic of South Africa)
Reg no. 1937/009839/06)
Share codes: RTO - RTN - RTOP
ISIN: ZAE000006144 - ZAE000009700 - ZAE000006151
INTERIM GROUP RESULTS
for the six months ended 31 December 2006
INCOME STATEMENT
Consolidated (R`000)
Six months ended Year ended
December 31 June 30
2006 2005 2006
(Unaudited) (Unaudited) (Audited)
Revenue 189 834 154 469 323 341
Continuing operations
Turnover 186 557 151 592 317 570
Operating profit 4 726 4 646 16 243
Dividends received 19 17 17
Net interest received 1 744 1 571 3 531
Profit/(loss) from associated company 93 30 (159)
Profit before taxation 6 582 6 264 19 632
Taxation 3 044 2 827 6 331
Profit from continuing operations 3 538 3 437 13 301
Discontinued operation
Loss from discontinued operation - (4 553) (4 553)
Profit/(loss) 3 538 (1 116) 8 748
Profit/(loss) attributable to:
Ordinary and `N` ordinary
shareholders 3 530 (1 124) 8 732
Preference shareholders 8 8 16
Profit/(loss) 3 538 (1 116) 8 748
Reconciliation of headline earnings
Attributable earnings/(loss) 3 530 (1 124) 8 732
Loss arising from discontinuance - 666 666
Headline earnings 3 530 (458) 9 398
Headline earnings/(loss) per share
(cents) 17.4 (2.3) 46.7
Earnings/(loss) per share (cents) 17.4 (5.6) 43.4
Diluted headline earnings/(loss) per
share (cents) 17.2 (2.2) 45.6
Diluted earnings/(loss) per share
(cents) 17.2 (5.4) 42.4
Weighted average number of equity
shares on which earnings per share
is based (000) 20 272 20 105 20 105
Number of equity shares in issue
(000) 20 272 20 105 20 105
Weighted average number of equity
shares used for diluted earnings
per share (000) 20 497 20 599 20 592
BALANCE SHEET
Consolidated (R`000)
December 31 June 30
2006 2005 2006
(Unaudited) (Unaudited) (Audited)
Assets
Non-current assets 60 323 60 888 58 640
Property, plant and equipment 44 891 49 311 43 656
Investment property 3 511 - 3 511
Investments (unlisted) 2 515 2 249 2 340
Deferred taxation 9 406 9 328 9 133
Current assets 124 618 105 869 124 038
Inventories 65 348 41 855 38 530
Trade and other receivables 17 363 16 553 11 254
Income tax receivable - 1 795 -
Cash and cash equivalents 41 907 45 666 74 254
Total assets 184 941 166 757 182 678
Equity and liabilities
Capital and reserves 148 790 139 224 149 450
Share capital 1 776 1 776 1 776
Share premium 23 719 22 758 22 783
Non-distributable reserves 507 222 566
Distributable reserves 122 788 114 468 124 325
Non-current liabilities
Post-retirement liability 5 543 6 078 5 707
Current liabilities 30 608 21 455 27 521
Provisions 393 928 543
Trade and other payables 30 158 20 474 25 517
Income tax payable 57 53 1 461
Total equity and liabilities 184 941 166 757 182 678
ABRIDGED CASH FLOW STATEMENTS
Cash generated by operations 12 101 5 895 22 255
Working capital changes (28 511) 533 15 410
Interest received (net) 1 744 1 571 3 531
Taxation paid (4 175) (3 624) (3 730)
Dividends paid (5 075) (5 035) (5 042)
Net cash (outflow)/inflow from
operations (23 916) (660) 32 424
Additions to property, plant and
equipment (9 080) (12 274) (16 990)
Proceeds on disposal of property,
plant and equipment 69 - 148
Other 580 (47) 25
Net cash outflows from investing
activities (8 431) (12 321) (16 817)
Net (decrease)/increase in cash (32 347) (12 981) 15 607
Cash at the beginning of the period 74 254 58 647 58 647
Cash at the end of the period 41 907 45 666 74 254
OTHER INFORMATION
Capital expenditure 9 080 12 276 16 990
Capital commitments
Contracted for 813 3 993 3 697
Authorised - not contracted for 2 772 3 502 5 377
Current ratio 4.1 4.9 4.5
STATEMENT OF CHANGES IN EQUITY
Share capital 1 776 1 776 1 776
Share premium 23 719 22 758 22 783
Non-distributable reserves
Opening balance 566 381 381
Share-based payments (142) 67 133
Foreign exchange translation 83 (226) 52
507 222 566
Distributable reserves
Opening balance 124 325 120 619 120 619
Profit/(loss) after taxation 3 538 (1 116) 8 748
Dividends (5 075) (5 035) (5 042)
122 788 114 468 124 325
Total capital and reserves 148 790 139 224 149 450
SEGMENTAL REPORTING
Turnover
Manufacturing 25 347 42 840 65 671
Less: intersegment sales (9 520) (21 039) (29 227)
External sales 15 827 21 801 36 444
Retail 170 730 140 220 291 555
Total 186 557 162 021 327 999
Operating profit/(loss)
Manufacturing (774) (5 383) (8 867)
Retail 7 484 5 887 20 670
Property (289) (407) (1 158)
Group services (1 695) (4) 1 045
Total 4 726 93 11 690
Depreciation included in
operating profit
Manufacturing 658 701 1 134
Retail 6 368 5 084 11 491
Total 7 026 5 785 12 625
Total segment assets
Manufacturing 20 508 31 290 23 898
Retail 133 789 100 720 117 225
Property 8 344 8 344 8 344
Group Services 22 300 26 403 33 211
Total 184 941 166 757 182 678
Total segment liabilities
Manufacturing (5 273) (8 026) (11 273)
Retail (25 434) (13 414) (16 248)
Group Services (5 444) (6 093) (5 707)
Total (36 151) (27 533) (33 228)
Capital expenditure
Manufacturing 672 801 1 233
Retail 8 408 11 475 15 757
Total 9 080 12 276 16 990
Last year, procurement activities were included in the manufacturing segment.
For the current year, this function is included in the retail segment, as it is
now considered more closely aligned to retail activities. The comparative
numbers have been restated accordingly. Group services includes corporate costs
and consolidation adjustments.
NOTES
1. Basis of preparation
These interim financial statements have been prepared in accordance with IFRS
standards and interpretations effective as at the date of preparing these
interim statements. The information presented has neither been audited nor
reviewed by the external auditors.
2. 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 2006.
3. 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.
Sales - 10 429 10 429
Loss of discontinued operation - (3 887) (3 887)
Loss arising from discontinuance - (666) (666)
Loss before taxation - (4 553) (4 553)
Taxation - - -
Loss from discontinued operation - (4 553) (4 553)
4. Preference dividend
A dividend on the 6% cumulative preference shares for the six months ended
31 December 2006 in the amount of R8 400 was declared in December 2006 and paid
on 27 December 2006.
COMMENT
The Board is pleased to report that the performance of the group for the half
year to December 2006 was substantially improved over last year.
Headline earnings, largely resulting from a solid performance by the
Queenspark retail segment of the business, amounted to 17,4 cents per share
compared to a loss of 2,3 cents per share in 2005.
Queenspark produced an improved result for the six-month period. Turnover
increased by 22% over the comparable period of last year to R170 million and
net operating profit improved by 27%.
Existing stores achieved a comparable growth in turnover of 11% with price
deflation of over 10%. The five new stores which were opened during 2006
contributed an additional 10% to turnover. This was largely attributable to a
strong performance by stores located at Gateway in Durban, Liberty Mall in
Pietermaritzburg and Woodlands in Pretoria all of which were opened in the
second half of the period under review.
Manufacturing activities are now centered entirely on the Atlantis factory.
Although much progress has been made towards improving performance, this
segment has not yet achieved a return to profitability.
Prospects
The Queenspark winter range, which is currently in stores has been well
received. It is planned that at least two further stores will be opened prior
to the June 2007 year-end. Turnover for the full six-month period to June 2007
is expected to exceed that achieved last year.
The continued expansion of Queenspark and improvement in performance, together
with a containment of losses at the Atlantis factory should produce an
improved overall group result for the 2007 financial year.
Signed on behalf of the board:
ML Krawitz (Chairman) CEA Radowsky (Chief Executive Officer)
Cape Town
27 February 2007
Transfer Secretaries:
Computershare Investor Services 2004 (Pty) Ltd, 70 Marshall Street,
Johannesburg, 2001
Sponsor:
Nedbank Capital
Registered Office:
Rex Buildings, 263 Victoria Road, Salt River, Cape Town, 7925
Directors: ML Krawitz (Chairman), CEA Radowsky (Chief Executive Officer),
PM Naylor, JC O`Brien, PE Shub
Secretary: African & Overseas Enterprises Limited
Websites: http://www.rextrueform.com and http://www.queenspark.com
Date: 01/03/2007 12:00:07 Produced by the JSE SENS Department.
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