Rex Trueform’s revenue lifts 13%

REX TRUEFORM produced a pleasing half-year result, despite a weak economic environment with an increase of more than 13 percent from the previous year.

The Rex Trueform Group is currently invested in the property and retail segments.

Comparing the current period with the corresponding prior period, revenue, mainly impacted by the retail segment, increased by 13.1 percent to R317.7 million (2016: R280.9m).

The group’s gross profit generated from the retail segment increased by 8.8 percent to R162.4m (2016: R149.3m), while its other income, including rental and royalty income, increased by 0.1 percent and was impacted by the reduction of third party royalty income. The group’s trading expenses were contained and increased by 5.1 percent.

This resulted in the operating profit increasing by 122.4 percent to R9.6m (2016: R4.3m), while profit after tax increased by 86.7 percent to R8m (2016: R4.3m), resulting in the earnings per share increasing by 87 percent.

The group’s Queenspark strategy includes the introduction of new brands to complement the existing ranges.

A number of new brands, together with new product categories, were introduced during the period under review in an endeavour to provide an improved offering to customers.

The group said that this new strategy, although in its infancy, is progressing well and in line with its longer-term strategy. Queenspark opened eight new stores during the review period, bringing its total number of stores to 69.

Queenspark’s turnover increased by 13.1 percent as a result of the implementation of its strategy. However, its gross margin decreased to 52.7 percent compared to 55.1 percent in 2016, partly because of more aggressive markdowns.

Queenspark’s strategy includes the continuous consideration of new brands and products to complement its existing ranges and its Namibian subsidiary will also continue to open new stores that are considered feasible, with a view to expanding its footprint both in South Africa and Namibia.

The group said the current tough economic trading and market conditions were still likely to continue to impact the business in the short term.

The group’s operating costs, which included additional store costs, increased by 6.6 percent.

The Rex Trueform Office Park complex is the main income-generating operation within the group’s property segment with the operating profit for the period amounting to R4.9m, compared to R4m in 2016.

The group has the intention to develop two further properties in the medium term, both situated in the Cape Town area and is continuing to consider development options in this regard.

joseph.booysen@inl.co.za