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Reuters
Published
Feb 21, 2011
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Truworths boosts H1 profit, mulls share buybacks

By
Reuters
Published
Feb 21, 2011

Feb 21 - Truworths, South Africa's biggest listed clothing retailer, posted a 19 percent rise in first-half profit as lower interest rates boost consumer spending and said it was considering M&A or buying back shares.


Lingerie from Truworths' Summer 2011 collection

Truworths, which runs 250 stores of the same name across South Africa, said on Monday diluted headline earnings per share totalled 242.7 cents in the 26 weeks to December 26, compared with 199.4 cents a year earlier.

Headline EPS, which strips out certain one-time items, is the main profit gauge in South Africa.

The upscale retailer said it could buy back shares or make an acquisition after its cash increased nearly 40 percent to 1.8 billion rand ($252 million) during the period.

Shares in the company rose 3 percent to 67.39 rand by 1122 GMT, outpacing a 0.5 percent rise in Johannesburg's Top-40 index of blue chips.

Truworths, which also operates franchise stores in other African countries and the Middle East, said sales rose 15 percent to 4.2 billion rand.

Consumer demand is recovering in Africa's biggest economy after a contraction in 2009, helped by 650 basis points of interest rate cuts since late 2008 that have left borrowing costs at historic lows.

Retail sales also grew by 8.3 percent year-on-year in December compared with 8.0 percent in November, beating market expectations of a 7.7 percent increase.

(Reporting by Tiisetso Motsoeneng; Editing by David Dolan)

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