Trueform boosts earnings

Clothing retailer and manufacturer Rex Trueform increased headline earnings per share 207% during a six-month period that proved challenging for other clothing retailers. Fred Robinson, spokesperson of Brimstone Investment Corporation, said yesterday that while the brand was a portfolio investment now, Brimstone was happy with the results and would be available to the brand to see how it could add value to its investment.

JSE-listed Brimstone bought 34,6% of Rex Trueform's parent company, African & Overseas, as well as 14% of Rex Trueform, for an undisclosed amount last year.

However, Robinson expected a tough trading period ahead for the entire retail sector.

The brand's revenue increased 16% to R221m in the half year to December, from R189,8m a year ago.

Headline earnings rose from R3,5m to R11m for the Cape-based company which trades mostly through the Queenspark chain.

Competitor Foschini said in November that while turnover had grown 8,8% to R3,7bn from R3,4bn in its half-year to September, the next six to 12 months would be “tight” as eight interest rate increases, higher petrol prices and the introduction of the National Credit Act affected trade.

Truworths said in January basic and headline earnings per share were expected to be 20% 30% higher in the half to December than in the first six months of the previous year. However, the period included an extra week.

During the period, which Truworths said was “challenging”, group sales were up 20% at R3bn.

Like-for-like sales were 11% higher and product inflation was about 6%.

Nedcor Securities analyst Syd Vianello said Rex Trueform's results followed a torrid year.

However, with the introduction of Brimstone as a shareholder, Vianello expected that management would be under pressure to perform.

Rex Trueform said its interim results reflected a “substantial improvement”.

Source: Business Day

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