2024

INTEGRATED REPORT

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Summarised Group financial statements

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SUMMARISED GROUP STATEMENTS OF FINANCIAL POSITION

at
30 June
2024
Rm
at
2 July
2023
Rm
  ASSETS
  Non-current assets 8 553 6 716
Property, plant and equipment 2 533 2 069

Total additions of R784 million in the current period consisting mostly of plant, equipment, furniture and fittings (R608 million) and buildings (R99 million), mainly as a consequence of capital expenditure incurred in respect of the new Truworths distribution centre (DC) that is currently in the fit-out stage and due to be commissioned by March 2025.

Right-of-use assets 3 545 3 329

Right-of-use assets increased by R216 million due to new leases concluded (including the lease in respect of the 50% share of the new Truworths DC), lease renewals and modifications and the reversal of previously recognised right-of-use asset impairment losses of R134 million in the current period.

Intangible assets 1 534 590

Intangible assets increased by R944 million following the partial reversal of previously recognised impairment losses on the Office trademarks to the value of R1 019 million.

  Goodwill 294 294
Other non-current assets 343 113

Non-current assets held at fair value increased mainly due to the consolidation of the Group’s charitable trusts for the first time during the current period.

  Deferred tax 304 321
  Current assets 10 099 9 417
Inventories 2 312 2 244

Inventories increased by R68 million and the Group’s inventory turn increased to 4.3 times (2023: 4.2 times). Truworths’ gross finished goods inventory increased by 11.4% and the inventory turn decreased to 4.0 times (2023: 4.5 times). In Office, gross inventory decreased by 10.5% (measured in Sterling) and inventory turn (measured in Sterling) increased to 4.8 times (2023: 4.2 times).

Trade and other receivables 5 419 5 546

Active gross trade receivables (relating to the Truworths, Identity and YDE businesses) decreased by 2.1% to R6.4 billion (2023: R6.6 billion). The ECL allowance in respect of the Truworths active trade receivables portfolio decreased to 20.3% of active gross trade receivables (2023: 20.6%).

  Derivative financial assets 28
Assets held at fair value 1 468

Current assets held at fair value comprise highly liquid, low-volatility net asset value money market investments, mainly in respect of Office.

  Other current assets 99 137
  Cash and cash equivalents 801 1 462
  Total assets 18 652 16 133
  EQUITY AND LIABILITIES
  Total equity 9 506 7 654
  Non-current liabilities 3 794 3 237
  Lease liabilities 2 927 2 827
Interest-bearing borrowings 268 169

Utilised a further R99 million of the green loan facility concluded in December 2022 for purposes of construction of the new Truworths DC, bringing the loan amount to R268 million.

  Provisions 186 166
  Other non-current liabilities 76 75
  Deferred tax 337
  Current liabilities 5 352 5 242
  Trade and other payables 1 636 1 591
  Interest-bearing borrowings 1 208 1 208
  Bank overdraft 1 099 935
  Lease liabilities 990 1 019
  Provisions 205 267
  Other current liabilities 214 222
  Total liabilities 9 146 8 479
  Total equity and liabilities 18 652 16 133
  Number of shares in issue (net of treasury shares) (millions) 372.3 369.3
  Net asset value per share (cents) 2 553 2 073
  Key ratios
Return on equity (%) 45 48

All medium-term targets published by the Group have been achieved or exceeded.

Return on capital (%) 65 69

All medium-term targets published by the Group have been achieved or exceeded.

Return on assets (%) 30 30

All medium-term targets published by the Group have been achieved or exceeded.

Inventory turn (times) 4.3 4.2

All medium-term targets published by the Group have been achieved or exceeded.

Asset turnover (times) 1.1 1.2

All medium-term targets published by the Group have been achieved or exceeded.

Net debt to equity (%) 3.2 11.1

Group net debt decreased from R850 million at the prior period-end to R306 million at the current period-end.

Net debt to EBITDA (times) 0.1

Group net debt decreased from R850 million at the prior period-end to R306 million at the current period-end.

 

SUMMARISED GROUP STATEMENTS OF COMPREHENSIVE INCOME

52 weeks 
to 30 June 
2024 
Rm 
52 weeks 
to 2 July 
2023 
Rm 
   Revenue  22 436  21 992 
Sale of merchandise  20 664  19 894 

Group sale of merchandise, which comprises Group retail sales, together with wholesale sales and delivery fee income, less variable consideration adjustments, increased by 3.9% to R20.7 billion. Retail sales in Truworths decreased by 3.2% and increased by 10.8% in Office.

   Cost of sales  (9 859) (9 445)
   Gross profit  10 805  10 449 
Other income  562  939 

In the prior period, other income benefitted from the impact of the indirect tax matter settlement (R254 million). Furthermore, in the prior period IFRS 16 impairment reversals were higher, higher insurance recoveries were received when compared to the current period and the prior period included foreign exchange gains. Excluding these, other income decreased 3%.

Intangible asset impairment reversal  1 019  – 

The intangible asset impairment reversal is an exceptional item of income arising from the partial reversal of previously recognised Office trademark impairment losses due to the overall improvement in the performance of Office.

Trading expenses  (8 168) (7 772)

Trading expenses for the current period increased by 5.1% to R8.2 billion compared to the prior period, and constituted 39.5% (2023: 39.1%) of sale of merchandise. Trading expenses in Truworths increased 1.9% and were well controlled overall despite pressure on utility costs due to higher than CPI increases. In Office, trading expenses increased 7.4% (in Sterling) mainly due to rising depreciation charges (in respect of IFRS 16 Leases and capital expenditure) and employment costs (impacted by national minimum wage increases, lower vacancies and higher operational demand based on sales).

   Depreciation and amortisation  (1 475) (1 359)
   Employment costs  (2 718) (2 489)
   Occupancy costs  (1 072) (961)
   rade receivable costs  (1 310) (1 283)
   Net bad debt and expected credit losses  (1 168) (959)
   Other trade receivable costs  (142) (324)
Other operating costs  (1 593) (1 680)
   Trading profit  4 218  3 616 
Interest income  1 388  1 143 

Interest income increased 21.4% to R1.4 billion as a consequence of higher interest rates, as well as the growing cash balances in Office.

   Dividend income  25  16 
Profit before finance costs and tax  5 631  4 775 

On a pro forma basis, profit before finance costs and tax increased 3% (refer to note 18 of the Summarised Audited Group Annual Results for further information).

Finance costs  (476) (378)

Finance costs increased by 25.9% to R476 million (2023: R378 million), due to higher borrowing levels together with higher interest rates in Truworths to fund working capital requirements, as well as an increase in IFRS 16 finance costs due to new and renewed leases.

   Profit before tax  5 155  4 397 
   Tax expense  (1 255) (1 109)
   Profit for the period  3 900  3 288 
   Attributable to: 
   Equity holders of the company  3 887  3 275 
   Holders of the non-controlling interest  13  13 
   Profit for the period  3 900  3 288 
Basic earnings per share  (cents) 1 046.9  888.5 

Headline earnings per share (HEPS) and diluted HEPS decreased 6.3% and 6.5%, respectively. On a pro forma basis, HEPS and DHEPS increased by 1.0% and 0.9%, respectively (refer to note 18 of the Summarised Audited Group Annual Results for further information).

Headline earnings per share  (cents) 817.9  873.3 

Headline earnings per share (HEPS) and diluted HEPS decreased 6.3% and 6.5%, respectively. On a pro forma basis, HEPS and DHEPS increased by 1.0% and 0.9%, respectively (refer to note 18 of the Summarised Audited Group Annual Results for further information).

Diluted basic earnings per share  (cents) 1 031.3  876.4 

Headline earnings per share (HEPS) and diluted HEPS decreased 6.3% and 6.5%, respectively. On a pro forma basis, HEPS and DHEPS increased by 1.0% and 0.9%, respectively (refer to note 18 of the Summarised Audited Group Annual Results for further information).

   Diluted headline earnings per share  (cents) 805.8  861.4 
Gross margin  (%) 52.3  52.5 

The Group's gross margin decreased to 52.3% (2023: 52.5%), but fell within the Group's target range. The gross margin in Truworths decreased to 54.9% (2023: 55.4%) and in Office increased to 47.0% (2023: 45.2%).

   Trading expenses to sale of merchandise  (%) 39.5  39.1 
   Trading margin  (%) 20.4  18.2 
Operating margin  (%) 27.3  24.0 

The Group recorded profit before tax of R5.2 billion in the current period, and the operating margin increased to 27.3% (2023: 24.0%).

   Reconciliation of headline earnings per share: 
   Basic earnings per share  (cents) 1 046.9  888.5 
   Impairment reversal of trademarks  (cents) (204.5) – 
   Net impairment reversal of right-of-use assets  (cents) (24.5) (13.8)
   Reversal of impairment of property, plant and equipment  (cents) (1.3) (3.0)
   Loss on write-off of intangible assets  (cents) 1.3  – 
   Loss on write-off or disposal of plant and equipment  (cents) –  1.6 
   Headline earnings per share  (cents) 817.9  873.3 
   Reconciliation of diluted weighted average number of shares: 
   Weighted average number of shares  (millions) 371.3  368.6 
   Add: Dilutive effect of share options, unvested restricted shares and share appreciation rights  (millions) 5.6  5.1 
   Diluted weighted average number of shares  (millions) 376.9  373.7 

 

SUMMARISED GROUP STATEMENTS OF CHANGES IN EQUITY

30 June 
2024 
Rm 
2 July 
2023 
Rm 
   Balance at the beginning of the period attributable to equity holders of the company  7 654  6 106 
   Total comprehensive income for the period  3 919  3 486 
Profit for the period  3 900  3 288 

Other comprehensive income comprises the movement in the foreign currency translation reserve, the fair value adjustment in respect of financial assets held at fair value through other comprehensive income and gains on defined benefit plans.

Other comprehensive income for the period  19  198 

Other comprehensive income comprises the movement in the foreign currency translation reserve, the fair value adjustment in respect of financial assets held at fair value through other comprehensive income and gains on defined benefit plans.

   Dividends declared  (2 204) (1 990)
   Shares repurchased  –  (28)
   Shares sold by Truworths International Limited Share Trust  36  – 
   Utilisation of reserves on exercise of 1998 share scheme options  (14) – 
   Share-based payments  139  137 
   Acquisition of non-controlling interest  (19) (46)
Movement in put option liability  (5) (11)

Increase in the present value of the amount payable on the future exercise of the put options granted to the non-controlling management shareholders in Office as a result of the increase in Office's profitability.

   Balance at the reporting date attributable to equity holders of the company  9 506  7 654 
   Comprising 
   Share capital*  –  – 
   Treasury shares  (1 920) (2 066)
   Retained earnings  11 093  9 393 
   Non-distributable reserves  333  327 
   Total equity attributable to equity holders of the company  9 506  7 654 
   Dividends (cents per share)
   Cash final - payable October/paid September  197  245 
   Cash interim - paid March  332  320 
Total 529  565 

Annual dividend per share decreased by 6% to 529 cents. Dividend cover maintained at 1.5 times.

*  Zero due to rounding.

 

SUMMARISED GROUP STATEMENTS OF CASH FLOWS

52 weeks 
to 30 June 
2024 
Rm 
52 weeks 
to 2 July 
2023 
Rm 
   CASH FLOWS FROM OPERATING ACTIVITIES 
   Cash flow from profit before tax  4 658  5 038 
Working capital movements  38  (1 227)

Working capital levels stabilised following the significant growth in inventories and trade and other receivables in the prior period.

   Cash generated from operations  4 696  3 811 
   Interest and dividends received  1 352  1 155 
   Finance costs paid  (468) (370)
   Capitalised finance costs paid  (9) (6)
  Tax paid  (967) (1 068)
Cash inflow from operations  4 604  3 522 

The cash inflow from operations of R4.6 billion was utilised to fund dividend payments (R2.2 billion) and capital expenditure (R770 million).

Dividends paid  (2 204) (1 989)

The cash inflow from operations of R4.6 billion was utilised to fund dividend payments (R2.2 billion) and capital expenditure (R770 million).

   Net cash from operating activities  2 400  1 533 
   CASH FLOWS FROM INVESTING ACTIVITIES 
Acquisition of plant, equipment and computer software  (770) (717)

The cash inflow from operations of R4.6 billion was utilised to fund dividend payments (R2.2 billion) and capital expenditure (R770 million).

Other investing activities  (1 378) (10)

R1.4 billion investment made in highly liquid, low-volatility net asset value money market investments, mainly in respect of Office.

   Net cash used in investing activities  (2 148) (727)
   CASH FLOWS FROM FINANCING ACTIVITIES 
   Shares repurchased by the company  –  (28)
   Proceeds on disposal of treasury shares  21  – 
Borrowings repaid  (500) – 

Net R99 million utilisation against the green loan facility for the construction of the Truworths DC

Net borrowings incurred  599  669 

Net R99 million utilisation against the green loan facility for the construction of the Truworths DC

   Lease liability payments  (1 101) (1 254)
   Acquisition of non-controlling interest  (19) (46)
   Net cash used in financing activities  (1 000) (659)
   Net (decrease)/increase in cash and cash equivalents  (748) 147 
   Net cash and cash equivalents at the beginning of the period  527  138 
   Net foreign exchange difference  (77) 242 
NET CASH AND CASH EQUIVALENTS AT THE REPORTING DATE  (298) 527 

Net cash and cash equivalents of -R298 million (representing cash and cash equivalents of R801 million net of overdraft of R1.1 billion).

   Key ratios 
   Cash flow per share  (cents) 1 240  956 
   Cash equivalent earnings per share  (cents) 1 255  1 286 
Cash realisation rate  (%) 99  74 

The cash realisation rate has averaged 99% over the past five years. The cash realisation rate was 99% for the current period (2023: 74%).

2024

INTEGRATED REPORT