According to Bloomberg, it is the largest outflow for the corresponding period since it started compiling the data in 1999. This means that local investors drove the recent gains on the JSE. It is a known fact that foreigners love our retail stocks and that they are uncertain about the coming election. If they do decide to return to the JSE, there is no doubt that a company like Truworths will be a beneficiary.
Truworths in South Africa contributes 73percent to revenue and almost 90percent to profit before tax, while Office (in the UK) contributed 27percent to revenue and 10percent to profit.
The Truworths division includes names like Daniel Hechter, Ginger Mary, Glamour, LTD, Earthaddict, Uzzi, Naartjie and Loads of Living. For the interim period to December 31, 2018, sales increased by 2percent. Locally, cash sales compromised 30percent of sales while all of Office sales are in cash. Gross profit was mostly unchanged and gross margin stable at 52.30percent, within the target range of 51percent and 55percent.
Diluted headline earnings per share decreased by 5percent, and the interim dividend declared fell by 5percent. The quality of the receivables book has incrementally improved due to the maintenance of strict credit lending criteria.