CLOTHING manufacturer and retailer Truworth’s Limited group revenue grew 10% to US$25,4 million for the year ended July 7 2013 up from US$23 million from on the back of strong merchandising by its three main retail units Truworth’s, Topics and Number 1.
Although there was significant growth in the sales volumes of all three units, low end chain, Number 1 Stores, whose sales grew by 26,9% last year, saw its sales comparatively lower at 8,2% this year.
Announcing its results this week, Truworth’s said group retail merchandise sales in the period under review increased by 8, 2% to US$23,8 million from US$22 million prior year following the growth at Number 1, coupled with 10,2% and 3,3% growth in sales at Truworths and Topics respectively.
Gross profit for the period was US$12, 4 million, 11% up from US$11,2 million in 2012 while trading expenses were US$11,1 million. Trading expenses comprised US$1,1 million in staff costs after a growth of more than US$500 000 from prior year and occupancy costs of US$3,1 million.
Retail trading profit stood at US$1,4 million, 19% up from US$1,6 million in the previous comparable period. Other operating costs reduced to US$2,8 million from US$3 million at the end of 2012.
“Profit before tax of US$1 598 198 grew by 81,3% to achieve an operating margin of 6,7% compared to 4% in the prior year,” said the group in a statement.
Net profit for the period amounted to US$1,2 million after a tax expense of US$415 784 compared to US$647 678 prior year.
Gross margin ratio was 52,2% from 50, 7% in 2012 while trading expenses to turnover ratio was 46,6% compared to 43,7%.
Truworths said its number of account holders grew 8,2% over the comparative period to 76 500, with 82,4% of these having made purchases in the financial year under review compared to 87,1% prior year.
Net bad debts, as a percentage of credit sales, declined to 1,3% compared to 1,8% in the prior period.
“The provision for doubtful debts as a percentage of gross trade receivables was 5, 5% compared to 4,5% at prior period end. The provision increased by 41,6% over the prior period,” the company statement said.
Given the deteriorating consumer credit environment, characterised by a high default rate, Truworth’s said it would continue with its prudent credit rating criteria and launch an in-store credit card for selected customers by end of this month. The credit card facility was expected to result in more affordable instalments and increase customers’ purchasing power.
The group spent US$1,3 million on capital expenditure in the year under review, mostly on store development.
It also spent US$879 525 on the development of five new stores in the retail chain and on facelifts on existing branches. A further US$219 535 and US$130 788 was channeled towards computer technology infrastructure and acquisition of motor vehicles respectively.
Borrowings were used to fund much of capital expenditure in the year under review, pushing current liabilities for the period to US$4 million. In the year to July 2012, non-current liabilities were US$1,2 million.