EPS slip as Wooltru cleans house

Cape Town - Wooltru on Friday reported a drop in headline earnings to 20.2c per share for the year ended June 30, 2001, from 54.3c the previous year.

The company said that its Board had resolved "certain key issues" which had held back the unbundling process.

"The most significant of these issues related to intra-group guarantees, in particular those relating to CNA and to promissory notes issued by Masstores," the group said in a statement.

"On the successful completion of the signed agreements, which is expected to be within the next month, Wooltru will have a sufficient degree of certainty and liquidity to enable it to unbundle at least 95% of the listed investments in Woolworths, Truworths and Massmart."

CNA reported a net loss before exceptional items of R124.3 million from a loss of R34.5 million the previous year.

Wooltru offloaded CNA on March 1 for R150 million, but this figure is not final and could increase by R15 million.

The total loss to Wooltru from its investment in CNA was R900.7 million.

Wooltru's joint business-to-consumer e-venture, inthebag, was sold to Woolworth's for R25.9 million in July. Total costs to Wooltru relating to inthebag, excluding proceeds, amounted to R37.5 million.

Wooltru said the disposal of its property portfolio is "well under way", with property to the value of R151.3 million already sold. Agreements for the sale of a further R218.5 million worth of property have been signed.

Wooltru expects to dispose of its entire property portfolio in the coming year, generating income of R30 million.

Wooltru said that it had received an offer for its 32.5% stake in Affinity Logic and that the sale was under negotiation. It expects to realise R135.7 million for the sale of the stake.

Listed operations

Woolworths Holdings, Massmart Holdings, and Truworths International all produced good results in what it said was a "tough period of retail trading." Their combined contribution to Wooltru's headline earnings increased by 29%, from R254.7 million to R328.2 million.

Woolworths headline earnings grew by 22.3% to R290.7 million during the period under review, with revenue up 10.7% at R7.4 billion. Turnover grew by 11.9% to R5.9 billion and profit before tax and exceptional items grew by 22.9% to R465.3 million.

Woolworths's growth was attributed to improvement in the textile business, the expansion of the franchise business in Africa and the Middle East and the continuing growth of its food business. It foresees further growth.

Country Road showed a loss of R31.5 million. Wooltru said it would nurse the division back to health.

Truworths International's headline earnings from continuing operations increased by 22.7% to R203.1 million. Operating profit before exceptional items rose 25.5% to R295.9 million.

Truworths reported earlier in the month that it survived the tough retail environment by growing its range of speciality stores and focusing on cost control. It expects to show "reasonable growth" in the year ahead.

Massmart achieved a 66% increase in comparable headline earnings to R212.3 million.

Massmart's turnover increased by 8.7% to R11.3 billion and net profit before tax and exceptional items grew to R275.2 million.

Revenue from fashion retailer Topics's decreased by 9.5% to R328.9 million and net profit before exceptional items deteriorated from a profit of R7.7 million last year to a loss of R28.2 million. Topics's stock had to be cleared due to poor control and oblique budget forecasts, to the tune of a headline loss of R21.3 million.

Wooltru plans to sell Topics in the coming year. It put Topics's book value at R47.9 million and its net asset value at R100.8 million.

Wooltru plans to delist once all assets have been disposed of and expects to then make a final cash payment to shareholders.

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