Truworths posts record profit as UK sales recover, SA credit appetite grows | Fin24

Truworths posted a file revenue within the yr to end-June, thanks partially to sturdy gross sales development at its UK enterprise and renewed credit score urge for food in South Africa.  

Truworths noticed its headline earnings per share climb by virtually 50% to 779.8 cents – eclipsing the very best earlier revenue in 2016 (667.6 cents).

“There have been no materials acquisitions by the group since 2016, so the outcomes are reflective of natural reasonably than acquisitive development, pushed by an improved gross sales efficiency, sturdy gross revenue margins and a continued deal with expense administration,” Truworths stated in a press release.

A closing money dividend of 205 cents per share was declared, bringing the annual dividend to 505 cents per share – 44% greater than in 2021.

Sale of merchandise rose 9.1% to R17.9 billion.

Its UK style footwear retailer Workplace elevated gross sales by virtually 14% in rand phrases, to R4.5 billion. In kilos, gross sales have been up virtually 17%,

For the primary eight weeks of the brand new monetary yr, its UK gross sales rose by 11% in pound. However the firm nonetheless expects to shrink its UK buying and selling house by 4% in coming months, and warned that the nation’s shopper spending will solely come beneath extra strain amid rising inflationary pressures, compounded by rising rates of interest and an anticipated slowing of the economic system. Previously yr, it closed six Workplace shops.

In the remainder of its enterprise, primarily Truworths in South Africa, its retail gross sales elevated by 7.5% to R14 billion, with account and money gross sales rising by 8.7% and 4.9%, respectively.

Truworths ladies’s put on gross sales rose by 6.4%, whereas Truworths menswear noticed a rise of 6%. Gross sales at its different manufacturers like Id (+8%) have been stronger, whereas YDE gross sales climbed virtually 35% to R230 million. Truworths Africa opened 15 shops and closed 23 shops over the previous yr.

Within the first eight weeks of the brand new monetary yr, retail gross sales rose by virtually 13% in comparison with the identical interval within the earlier yr – which was hit onerous by the civil unrest in KwaZulu-Natal.

Whereas it warned that South African shoppers are battling greater gasoline and meals costs, together with load shedding and a weak labour market, Truworths plans to develop by launching new manufacturers, specializing in provide chain – and utilizing credit score and the power of its guide.

“The present well being of the accounts portfolio highlights each the resilience of the client base and the demand for Truworths’ high quality, aspirational style.”

Account gross sales comprised 69% of retail gross sales, from 68% in 2021. The variety of lively accounts elevated by 2.3% to 2.6 million – with 82% of those accounts “in a wholesome place”, which means that they can buy. Overdue balances as a proportion of gross commerce receivables improved to 14%, from 15% final yr.