Truworths International (TRU) H2 2024 earnings summary

Executive summary

• Strong cash generation with a 99% realization rate and ZAR 2.2 billion in dividends returned; net debt reduced to ZAR 306 million after significant investment in a new Cape Town distribution center.

• Achieved all medium-term financial targets and maintained robust gross profit and operating margins despite a challenging year, particularly for Truworths Africa.

• Truworths Africa saw a 3% decline in retail sales, while Office UK grew retail sales by 11% year-over-year.

• Continued focus on inclusivity, ESG, transformation, cost containment, store modernization, and omni-channel investments.

• New store concepts and e-commerce growth (34% YoY, now 5% of sales) support future positioning.

Financial highlights

• Group sales up 4% year-over-year to ZAR 20.7 billion; headline earnings up 2% (pro forma R2.99 billion); diluted EPS up 1% on a pro forma basis.

• Gross margin held steady at 52.3%; operating margin at 22.0% (pro forma).

• Office U.K. delivered 11% sales growth and a 25% increase in profit before finance costs and tax.

• Free cash flow of ZAR 1.3 billion generated; cash from operations up 23% to ZAR 4.7 billion.

• Annual dividend per share of 529 cents, down from 565 cents last year.

Outlook and guidance

• Early FY25 trading: Truworths up 2.5% and Office up 11% in local currency for the first 9–10 weeks.

• Trading space projected to grow 2% in FY2025, with 1% in Truworths and 11% in Office.

• Expecting improved economic conditions in South Africa with anticipated interest rate cuts and GDP growth.

• Office to focus on digital marketing, online growth, and store expansion.

• Confident in stock levels and product mix heading into festive season; quick response capabilities enhanced.