Holdsport core HEPS up 22.5% to 387.4c

The company, which comprises the retail chains Sportsmans Warehouse and Outdoor Warehouse and Performance Brands, listed on the JSE in July last year.

Total sales increased by 9.8% to R1.243 billion and retail sales rose by 8.7% to R1.196 billion. The group's core headline earnings increased by 22.5% to R167.2 million. Operating profit grew to R226.4 million from R188.9 million previously.

Holdsport maintained strong margins through its procurement strategies and rigorous cost management. The group's operating profit margin for the period increased from 17.3% to 18.2%, mainly as a result of profits on foreign exchange denominated transactions of R1.4 million in this financial year compared to losses of R6.7 million in the previous year.

A final gross dividend of 115 cents per share was declared, in line with its dividend policy of two times cover by earnings.

The group opened two new stores during the period and relocated three stores, with a weighted increase in trading area of 3.0%.

Like-for-like store retail sales grew by 6.6%, while the retail chains experienced price inflation of approximately 0.6% for the year. Total group trading expenses increased by 7.7% on a like-for-like basis, excluding foreign exchange profits and losses.

Looking ahead the group said the 2010 FIFA World Cup and the 2011 Rugby World Cup in the last two years created a high base from which to grow. Furthermore, low selling price inflation, creeping cost inflation, increased competition and the risk of overtrading in the sporting goods sector are likely to present challenges in the year ahead.

Notwithstanding these challenges, the group said it is confident that it will attract customers and show growth as long as it continues to provide its distinctive retail experience with exciting choice, depth of product and exceptional service.