HARARE – Listed clothing retailer, Truthworths’ revenue for the year to July 08, 2018 amounted to $16 million, which was 9 percent above prior year’s $14 million.
An operating profit of $2 million was achieved in the period compared to a loss position of $1,2 million recorded during the same comparable period.
During the period under review, retail merchandise sales increased to $13,4 million from $12,2 million.
Group CEO Themba Ndebele said the group modified its credit offering for the home and living and homeware products on the back of high price points as well as limited consumer spending power hence limited credit.
“More credit was available to the core business that is apparel, which has lower price points and high margins,” he said.
The group managed to control credit sales through consistent account assessment risk criteria as well as improved collections which resulted in an increase in number of accounts able to make purchases.
At period end 71,5 percent compared to 66,9 percent in 2017- of the group’s account holders were able to make purchases.
The number of accounts increased by 3,1 percent over the prior period to 91 745, and of these 13 744 had signed up for the Instore Credit Card at period end.
For Truworths, apparel grew 25,3 percent while Topics and Number One grew 27,5 percent and 20,3 percent respectively.
A gross profit margin of 50 percent was achieved, an improvement from 40,2 percent on increased sales at full margin and no markdown compared to a markdown of 13 percent of sales in the prior period and a change in sales mix in favour of apparel.
Trading expenses went down 6 percent despite increase in employment costs.
A profit after tax of $0,8 million was achieved from a loss position of $1,7 million. Basic earnings per share improved to 0,21 cents from basic loss per share of 0,47 cents.
Ndebele said the group would cushion itself in the wake of foreign currency shortages that are likely to continue and pose a challenge to product availability as well as affect product supply and sales.
On the other hand, the resurgent inflationary pressures will negatively affect consumer disposable incomes and confidence.
The group did not declare a dividend to preserve capital.