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Aug 19, 2016
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South Africa's Truworths posts 12% rise in FY profit

By
Reuters
Published
Aug 19, 2016

South African clothing retailer Truworths International reported a 12 percent increase in full-year profit on Thursday, boosted by cash sales at its British unit Office Holdings, but falling short of estimates.

Group retail sales for the 52-week period ended 26 June 2016 increased by 46.1 percent to 17.0 billion rand ($1 billion) versus comparable period.


South Africa's Truworths posts 12% rise in FY profit - Truworths


Headline and fully diluted headline earnings per share for 52 weeks ended June 26 up 12 percent to 667 cents, but short of 702 cents estimate by Thomson Reuters Smart Estimates. The annual dividend per share was up 12 percent. 

The firm said cash sales outpaced sales on in-store credit as British footwear chain Office sold only in cash and new rules in South Africa hampered credit extension.

"Credit retail sales were significantly impacted by the introduction of new affordability assessment regulations in September 2015, which management estimates resulted in a loss of between 200 million rand to 250 million rand in sales," the company said.

"We expect the South African trading environment to remain challenging during the 2017 financial period, with slow economic growth and rising inflation putting pressure on consumers," the company said.

The trading environment in United Kingdom is also faced with uncertainty after decision to withdraw from European Union, but is likely to be less uncertain as more clarity regarding Brexit emerges, the company said. 

Shares in Truworths down 6.7 percent at 85.34 rand by 1450 GMT. 
 

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