Johannesburg - South Africa's biggest listed clothing
retailer Truworths International [JSE:TRU] beat consensus with a 21% rise in full-year profit
as lower interest rates boosted consumer spending.
Truworths, which runs stores with the same name across the
country, said on Thursday diluted headline earnings per share totalled 447.5
cents in the 52 weeks to end-June 26 compared with 370.4c a year earlier.
A Thomson Reuters poll of eight analysts had expected
headline EPS - the primary measure of profit in South Africa that strips out
certain off items - to come in at 442.5c.
The company boosted its annual dividend by 31% to 134c /share, after reducing its dividend cover from 1.9 times to 1.7 times.
"The group will continue to actively manage its capital
base to generate competitive returns to shareholders, while evaluating
potential investment and acquisition opportunities to complement the current
merchandise offering," it said in the statement.
Shares in the company, which are up about 2% so far this
year, were little changed at R73.41 as of 12:23 GMT, outperforming a 1.8%
decline in the JSE Top 40 - (Tradeable) [JSE:J200] index of blue chips .
Consumer demand is recovering in South Africa after a
contraction in 2009, helped by 650 basis points of interest rates cuts since
2008 that left borrowing costs at historic lows, but analysts and fund mangers
have said the recovery has not been enough to justify high valuation multiples.
South Africa's retail sales beat expectations with 2.2%
year-on-year increase in June, official data showed this week, but analysts
have said the number still showed that a recovery was fragile.
Truworths said sales rose 13.5% to R8.1bn, with same store
sales increasing 8.9% on product inflation of around 4%.
Sales for the first seven weeks of the 2012 fiscal year
increased by 10.4% and the company expects product inflation at high
single-digit levels this financial year.