Rex Trueform Clothing Co. Ltd South Africa FY2013 results

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Rex Trueform Clothing Co. Ltd South Africa FY2013 results

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Rex Trueform Clothing Co. Ltd South Africa FY2013 results

  1. 1. REX TRUEFORM CLOTHING COMPANY LIMITED (INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA) (REG NO. 1937/009839/06) ("THE COMPANY" OR "THE GROUP" OR "REX TRUEFORM") JSE SHARE CODES: RTO - RTN - RTOP ISIN: ZAE000006144 - ZAE000009700 - ZAE000006151 REVIEWED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS RESULTS FOR THE YEAR ENDED 30 JUNE 2013 CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION 2013 2012 (Reviewed) (Audited) R'000 R'000 ASSETS Non-current assets 114 458 90 263 Property, plant and equipment 89 631 74 910 Investment property 5 551 5 662 Intangible assets 8 010 4 510 Other investments 524 524 Deferred tax asset 10 742 4 657 Current assets 203 416 238 617 Inventories 88 231 61 881 Trade and other receivables 11 187 11 700 Forward exchange contracts 3 660 1 072 Income tax receivable 1 656 2 780 Cash and cash equivalents 98 682 161 184 Total assets 317 874 328 880 EQUITY AND LIABILITIES Capital and reserves 259 753 281 538 Share capital 1 777 1 777 Share premium 25 836 25 836 Treasury shares (1 190) (1 453) Other reserves 980 963 Retained earnings 232 350 254 415 Non-current liabilities 15 508 14 961 Post-retirement liability 2 161 2 381 Accrued operating lease liability 11 168 11 150 Deferred tax liability 2 179 1 430 Current liabilities 42 613 32 381 Provisions 3 077 - Trade and other payables 39 473 32 357 Income tax payable 63 24 Total equity and liabilities 317 874 328 880 CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME % 2013 2012 change (Reviewed) (Audited) R'000 R'000 Revenue (10,7%) 483 957 541 676 Turnover (10,6%) 474 438 530 593 Cost of sales (231 176) (246 182) Gross profit (14,5%) 243 262 284 411 Employment costs (104 358) (97 515) Occupancy costs (84 102) (76 447) Depreciation and amortisation (17 585) (21 338) Other operating costs (59 434) (65 431) Rental income 1 599 1 526 Royalties 1 009 1 038 Management fee income 471 373 Operating (loss)/profit (171,9%) (19 138) 26 617 Dividends received 13 13 Interest income 6 427 8 133 Interest expense (189) (272) (Loss)/profit before tax (137,4%) (12 887) 34 491 Income tax expense 3 389 (10 711) (Loss)/profit for the year (139,9%) (9 498) 23 780 Other comprehensive (loss)/income Net change in fair value of available-for-sale financial assets - (52) Total comprehensive (loss)/income for the year (9 498) 23 728 (Loss)/profit attributable to: Ordinary and "N" ordinary shareholders (9 515) 23 763 Preference shareholders 17 17 (Loss)/profit for the year (9 498) 23 780 Total comprehensive (loss)/income attributable to: Ordinary and "N" ordinary shareholders (9 515) 23 711 Preference shareholders 17 17 Total comprehensive (loss)/income for the year (9 498) 23 728 Reconciliation of headline (loss)/earnings (Loss)/profit attributable to equity holders (9 515) 23 763
  2. 2. Adjusted for: Loss from disposal of property, plant and equipment 79 18 Impairment (reversal)/loss on equipment and shopfitting (310) 1 538 Headline (loss)/earnings (9 746) 25 319 Basic (loss)/earnings per ordinary share (cents) (139,9%) (46,3) 116,1 Headline (loss)/earnings per ordinary share (cents) (138,3%) (47,4) 123,7 Diluted basic (loss)/earnings per ordinary share (cents) (139,9%) (46,2) 115,7 Diluted headline (loss)/earnings per ordinary share (cents) (138,4%) (47,3) 123,3 Dividend cover (based on headline earnings) (0,8) 2,0 Weighted average number of equity shares on which earnings per share is based (000's) 20 555 20 469 Weighted average number of equity shares on which diluted earnings per share is based (000's) 20 594 20 538 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 2013 2012 (Reviewed) (Audited) R'000 R'000 Share capital 1 777 1 777 Share premium 25 836 25 836 Treasury shares Opening balance (1 453) (1 762) Proceeds from delivery of employee share options 263 309 Closing balance (1 190) (1 453) Other reserves Opening balance 963 968 Share-based payment expense 17 47 Fair value adjustment of available-for-sale financial assets - (52) Closing balance 980 963 Retained earnings Opening balance 254 415 241 294 (Loss)/profit for the year (9 498) 23 780 Preference dividends paid (17) (17) Ordinary dividends paid (12 550) (10 642) Closing balance 232 350 254 415 Total capital and reserves 259 753 281 538 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS 2013 2012 (Reviewed) (Audited) R'000 R'000 Operating (loss)/profit before working capital changes (1 654) 45 456 Working capital changes (18 206) 5 157 Interest income 6 427 8 133 Interest expense (189) (272) Dividends paid (12 567) (10 659) Dividends received 13 13 Income tax paid (784) (10 255) Secondary tax on companies paid - (1 073) Net cash (outflows)/inflows from operating activities (26 960) 36 500 Additions to property, plant and equipment (31 866) (26 253) Additions to intangible assets (4 134) (3 862) Proceeds from disposal of property, plant and equipment 195 229 Proceeds from disposal of discontinued operations - 5 412 Net cash outflows from investing activities (35 805) (24 474) Proceeds from delivery of shares by share trust 263 309 Net cash inflows from financing activities 263 309 Net (decrease)/increase in cash and cash equivalents (62 502) 12 335 Cash and cash equivalents at the beginning of the year 161 184 148 849 Cash and cash equivalents at the end of the year 98 682 161 184 GROUP SEGMENTAL REPORTING 2013 2012 (Reviewed) (Audited) R'000 R'000 Revenue Total external retail revenue 475 918 532 004 Retail segment revenue 478 705 534 188 Intersegment revenue earned (2 787) (2 184) Total external property revenue 1 599 1 526 Property segment revenue 5 527 5 388 Intersegment revenue earned (3 928) (3 862) Dividends received 13 13 Interest income 6 427 8 133 Total group revenue 483 957 541 676 Segment operating (loss)/profit Retail segment (loss)/profit (14 754) 28 681
  3. 3. Property segment (loss)/profit (243) 1 287 Group services operating loss (4 141) (3 351) Total group operating (loss)/profit (19 138) 26 617 Depreciation and amortisation Retail 17 308 21 113 Property 277 225 Total group depreciation and amortisation 17 585 21 338 Segment assets Retail 217 474 214 762 Property 32 672 15 286 Group services* 67 728 98 832 Total group segment assets 317 874 328 880 Segment liabilities Retail 51 333 42 389 Property 2 606 2 099 Group services* 4 182 2 854 Total group segment liabilities 58 121 47 342 Capital expenditure Retail 19 030 26 991 Property 16 970 3 124 Total group capital expenditure 36 000 30 115 * Group services include corporate costs. OTHER INFORMATION Capital commitments Authorised - not contracted for 32 361 56 685 Authorised - contracted for 3 048 7 955 Gross profit margin 51,3% 53,6% Operating (loss)/profit margin (4,0%) 5,0% Retail segment operating (loss)/profit margin (3,1%) 5,4% NOTES 1 REVIEW BY AUDITORS The condensed consolidated financial statements of Rex Trueform for the year ended 30 June 2013 have been reviewed by the company's auditors, KPMG Inc. In their review report dated 5 September 2013, which is available for inspection at the company's registered office, KPMG Inc state that their review was conducted in accordance with the International Standard on Review Engagements 2410, Review of Interim Information Performed by the Independent Auditor of the Entity, which applies to a review of consolidated preliminary Information Performed by the Independent Auditor of the Entity, which applies to a review of consolidated preliminary financial information, and have expressed an unmodified conclusion on the condensed consolidated preliminary financial statements. 2 BASIS OF PREPARATION The condensed consolidated preliminary financial statements are prepared in accordance with the framework concepts and recognition and measurement principles of International Financial Reporting Standards and presented in accordance with the minimum content, including disclosures, prescribed by IAS 34 Interim Financial Reporting applied to year end reporting, the SAICA Financial Reporting Guides as issued by the Accounting Practises Committee and Financial Pronouncements as issued by the Financial Reporting Standards Council, the requirements of the Companies Act of South Africa and the JSE Listings Requirements. These reviewed results have been prepared under the supervision of the group financial director, Damian Johnson CA(SA). 3 ACCOUNTING POLICIES The accounting policies applied are consistent with those applied in the preparation of the group's annual financial statements for the year ended 30 June 2012. The integrated annual report containing a detailed review of the operations of the company will be posted to shareholders towards the end of September 2013. The annual financial statements will be posted on the company's website www.rextrueform.co.za at the end of September 2013. COMMENTARY As anticipated in the interim report, the group's retail segment continued to find trading conditions difficult in the second six months. The group's revenue for the year decreased by 10.7% to R484.0 million (2012: R541.7 million) and the gross profit decreased by 14.5% to R243.3 million (2012: R284.4 million). Group operating costs increased by 1.8% to R265.5 million (2012: R260.8 million) and included a R3.1 million retrenchment provision incurred as a result of the reorganising of the retail business. The above resulted in the group's operating profit decreasing from R26.6 million to a loss of R19.1 million. The loss after tax amounted to R9.5 million (2012: profit of R23.8 million). In line with performance, headline earnings per share decreased by 138.3% resulting in a headline loss per share of 47.4 cents, and the earnings per share decreased by 139.8% resulting in a loss per share of 46.3 cents.
  4. 4. Retail The turnover in the Queenspark retail segment was R474.4 million (2012: R530.6 million), a decrease of 10.6% on last year. The gross profit margin decreased to 51.3% (2012 53.6%) mainly due to product inflation pressures resulting from the weakening of the Rand. The retail segment operating profit decreased by 151.3% resulting in loss of R14.7 million for the year (2012: profit of 28.7 million). Property As noted in the interim report and in line with the business strategy, the development of the Rex Trueform Office Park in Salt River continued during the year. The segment made a small operating loss for the year (R0.2 million) mainly due to higher operating costs. Capital expenditure of R17.0 million was incurred in the segment during the current year, of which R16.6 million relates to the Rex Trueform Office Park. Prospects Retail The outlook for retail sales continues to be impacted by the slowdown in the growth of economy, consumer debts levels, tight lending standards and rising living costs. Ongoing weakness in the Rand exchange rate against the US Dollar will continue to add inflationary pressure to the cost of merchandise. International brands continue to enter the local clothing retail market, intensifying industry competition. Against this back-drop, the company's retail segment will remain under pressure in the 2014 financial year. Certain strategic initiatives initiated during the year are expected to positively impact the year ahead. Further initiatives are planned and will be implemented during the forthcoming year. Property The main focus of this segment relates to the development of the Rex Trueform Office Park. The main construction activities are expected to be completed during the 2014 financial year, where-after substantial tenant occupancy is expected. Dividend The board of directors is proposing to shareholders that the dividend on the ordinary and "N" ordinary shares be kept at 61 cents per share (2012: 61 cents per share). Shareholders will be asked to consider and approve the directors' dividend proposal at the annual general meeting of the company to be held on 14 November 2013. An announcement detailing the terms of the dividend declaration will be made immediately following the annual general meeting. Any reference to the future financial performance included in this statement has not been reviewed and reported on by the company's external auditors and does not constitute an earnings forecast. Rex Trueform Clothing Company Limited (Incorporated in the Republic of South Africa) (Reg No. 1937/009839/06) ("the company" or "the group" or "Rex Trueform") JSE share codes: RTO - RTN - RTOP ISIN: ZAE000006144 - ZAE000009700 - ZAE000006151. Registered office: Rex Buildings, 263 Victoria Road, Salt River, Cape Town, 7925 Directors: ML Krawitz+ (Chairman), CEA Radowsky (Chief Executive Officer), DS Johnson, PE Shub, PM Naylor*, RV Orlin* and RW Rees (UK)* + Non-executive *Independent Non-executive There were no changes to the board of directors during the year, other than the resignation of SM Lawrence as company secretary and the appointment of AT Snitcher in her stead with effect from 12 July 2013. Company secretary: AT Snitcher Transfer secretaries: Computershare Investor Services (Pty) Ltd, 70 Marshall Street, Johannesburg, 2001 Sponsor: Java Capital Websites: www.queenspark.com - www.rextrueform.com

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