Tinashe Makichi : Business Reporter
Truworths Limited’s revenue for the half year to January 10, 2016 went up 6,6 percent to $12,2 million from $11,4 million of the prior period mainly driven by increased sales participation from the home-ware range. Gross profit for the period was down to $5,1 million from $5,2 million while retail trading profit amounted to $27,532 down from $48,685. The gross profit margin decreased as a result of increased participation of the home-ware range which carries a lower margin.Truworths Limited chief executive Themba Ndebele told analysts on Tuesday that overall profit recorded during the period was buoyed by interest income which went up to $1,099 million from $0,652 million.
Profit for the year amounted to $327,876 up from $49,370 prior year.
“The key Christmas trading was severely subdued. We witnessed a slump in sales from the day it was announced civil service salaries would be paid on the last day of December and into the New Year.
“On a like for like basis, the first half trading was 6, 6 percent higher than the prior year.
“There was increased sales participation from the home-ware range which carries a lower gross margin than apparel,” said Mr Ndebele.
“This resulted in a decline in the overall gross profit margin,” he said.
Mr Ndebele said there was growth in the company’s debtor’s book during the period under review with more customers’ opting for the 12-month scheme.
The 12-month scheme represented 28, 6 percent of the book compared to 7,5 percent in the prior year end. Trading expenses excluding debtors costs decreased 1,7 percent while the operating margin improved to four percent from 0,7 percent of 2015.
On credit management, the number of active accounts increased 9,7 percent over the comparative period to 86,270. 10,755 of these were on the in store credit card at the period end.
Cash EBITDA compared to the prior period improved by 43,9 percent to $1,4 million.
Mr Ndebele said the trading and credit environment is expected to deteriorate during the remainder of the 2016 financial period.
He said consumer incomes during the course of the financial year will come under pressure driven by increased stress levels in an environment characterised by job losses, delayed pay dates and reduced earnings.
“Focus will be on the management of trade receivables so as to maximise cash flows and ensure improvement and enhancement of quality of the book,” said Mr Ndebele.