Rex Trueform reports higher earnings

Image courtesy of FreeDigitalPhotos.net. Credit: Suat Eman

This was despite revenue declining by 3.8% to R246.5 million owing to lower turnover in the manufacturing division.

Operating profit increased by 19.9% as a result of an improved performance by the Queenspark retail segment.

On the group's retail performance, Rex Trueform said consumers remained under pressure and turnover growth was limited to 0.4%.

In the challenging retail environment same store sales declined by 1.9%. Four new stores were opened during the period, which together with improved margins and operating efficiencies resulted in an increase of 33.8% in Queenspark's operating profit compared to the same period of last year.

Turning to manufacturing, the company said a reduction in orders at the Atlantis manufacturing plant and the subsequent reorganisation of this factory resulted in an increased operating loss.Looking ahead, Rex Trueform said retail performance remains affected by the depressed incomes, rising costs and low confidence levels of consumers.

"The costs associated with running the business, particularly energy costs also continue to rise. The manufacturing segment will also continue to present a challenge.

"Past performance benefited materially from the Duty Credit Certificate Scheme which is to be completely phased out in the near future.

"Current strategy is directed at strengthening Queenspark's position in the market-place through growth of the store base, store upgrades and a renewed focus on the product offering.

"The depressed economic conditions are expected to continue well into 2010 and the achievement of sales and profit targets will remain challenging," the company said.