Tru­worths profit ex­ceeds es­ti­mate

CityPress - - Business - – Bloomberg

Tru­worths, the re­tailer that has ac­quired two chil­dren’s cloth­ing com­pa­nies this year, posted an­nual profit that beat an­a­lysts’ es­ti­mates amid an im­prov­ing sec­ond-half per­for­mance.

Its net in­come rose 2.6%, to R2.47 bil­lion, in the 52 weeks through June 28, the Cape Town-based com­pany said in a state­ment on Thurs­day, ex­ceed­ing the R2.43 bil­lion av­er­age es­ti­mate com­piled ear­lier by Bloomberg. Re­tail sales in­creased 12% in the sec­ond half of the fi­nan­cial year com­pared with the first half’s 5.2% growth.

Tru­worths bought Earthchild Cloth­ing in March and the South African cloth­ing-re­tail busi­ness of Naartjie a month later as it sought growth op­por­tu­ni­ties.

Chief ex­ec­u­tive Michael Mark said: “The ac­qui­si­tions of Earthchild and Naartjie were fi­nalised in the sec­ond half, and both brands, to­gether with LTD Kids, will be in­cor­po­rated in the newly cre­ated spe­cial­ist Tru­worths kids em­po­rium. We plan to open 150 kidswear stores or out­lets over the next five years,” he said.

“Man­age­ment feels the credit en­vi­ron­ment is steadily im­prov­ing de­spite the cur­rent tough eco­nomic en­vi­ron­ment.”

Re­tail sales, ex­clud­ing Earthchild and Naartjie, rose 15% in the first seven weeks of fis­cal year 2016, com­pared with a year ear­lier, the com­pany said.

Tru­worths shares rose 7.1%, to R87.20 on Thurs­day in Johannesburg, the big­gest gain in six months and re­vers­ing an ear­lier de­cline. Earn­ings ex­clud­ing one-time items climbed 4%, to R5.92, while the com­pany raised the div­i­dend by 5.2%, to R4.05 a share.

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