Truworths swings into HY loss

LIVINGSTONE MARUFU

Listed clothing chain, Truworths Limited, swung into a half year loss of ZWL$7.2m for the six months to January 10, 2021negatively impacted by the devastating Covid-19 induced lockdowns, Business Times can report.

Truworths, which operates Truworths Men, Topics and Number 1, reversed a profit of ZWL$30.9m it reported in the prior comparative period.

Revenue for the group declined 17% to ZWL$137.9m from ZWL$165.7m.

Units sold were down 23%.

The company said operational costs skyrocketed to ZWL$108m in the period under review from ZWL$89.1m reported in the same period in 2019.

In a joint statement, accompanying results, Truworths CEO Bekithemba Ndebele and the board chairman Mordecai Mahlangu said the trading environment was exceptionally challenging and this affected the company’s trading performance.

“Overall the half year was negatively affected by the Covid-19 business restrictions in particular the period July to September. The most negatively impacted area on trading volumes in the half year under review was Harare CBD which happens to have our biggest stores,” Truworths said.

Truworths balance sheet shrunk by 17%. Total assets for the group stood at ZWL$243.8m during the reviewed period from ZWL$269m reported in the prior comparative period.

Truworths sold 23.5 % in July, 25.4% in August, 32% in September, 0.9% in October, 6.8% in November and 26.8% in December.

The sales participation and credit management business curtailed the granting of credit due to the hyperinflationary environment.

In the half year cash sales were 66.9% of total sales and credit sales were 33.1% of total sales.

The doubtful debt provision was 15.2% of gross debtors compared to 12.6% in the prior periods.

The board deemed it prudent not to declare a dividend due to the need to finance increased working capital requirements in a hyperinflationary environment with limited supplier credit terms.

Truworths expect liquidity in the economy will remain constrained until a bail-out relief package is implemented.

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