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Managing Stakeholder Relationships

Stakeholder engagement and collaboration came to the fore during the COVID-19 pandemic, with extensive interaction with stakeholders to ensure both business continuity and sustainability.

During this time the engagement issues were often particularly challenging to address, with significant financial and social implications for both parties. These include rental negotiations with landlords affecting the Group’s portfolio of over 920 stores in South Africa and the UK, revised trading terms with certain suppliers and in some cases merchandise order cancellations and/or delivery extensions, employees being required to work from home and many in the UK being furloughed, and alternative payment channels being created for account customers.

The Group’s stakeholder relationship programme focuses primarily on the five stakeholder groups that are most likely to influence the delivery of the Group’s strategy and to impact on the material issues within the business.

Management assesses the quality of these relationships on an ongoing basis to ensure the Group understands, considers and responds to the legitimate needs and interests of stakeholders.

A five-point internal rating scale is applied by management for each primary stakeholder group:

Strong relationship of trust and mutual understanding

Good quality, value-adding relationship

Good relationship but needs to improve to add value

Functional, poor-quality relationship

Poor to no relationship


Five point internal rating scale

Rationale for engaging: Shareholders are the Group’s principal providers of financial capital. Engagement is focused on local and international institutional and private investors as well as fund managers and analysts. The CEO and CFO, together with senior Finance management, are responsible for shareholder engagement.

Key engagement

Response to
engagement issues

Progress with the turnaround programme in Office and the Group’s plans to ensure the long-term viability of Office.

Group management undertook a review of the business and considered several options for Office, including disposal, closure and refinancing. Following this process the board committed to maximising the value of its investment in Office. This included initiating a partial restructure of the business, which included a staff redundancy process and store rationalisation programme, and committed to provide funding to Office through a £6.5 million 15‑month secured revolving credit facility.

Impact of lockdown on performance of Truworths and Office.

The Group maintained regular communication with shareholders and issued three updates on SENS during lockdown to provide insight into the trading performance during this period. The annual results announcement and presentation in early-September provided extensive detail on the Group’s response to the COVID-19 crisis and the impact on performance.

Impact of lockdown on the Group’s liquidity, cash position and ability to pay a final dividend for the 2020 financial period.

Ahead of the national lockdown and closure of all stores, management engaged with its primary bank to take proactive steps to ensure liquidity. Truworths successfully extended the term of its revolving credit facility to ensure access to liquidity in the medium‑term.

Cash preservation measures were implemented ahead of lockdown to ensure liquidity throughout the period when stores were closed. Despite the serious impact of the lockdown on cash generation, the Group ended the financial period in a positive cash position, even after repurchasing shares earlier in the period totalling R583 million.

The board committed to maintaining the dividend flow to shareholders and declared a final dividend of 31 cents per share, based on a dividend cover of 1.5 times, bringing the annual dividend to 280 cents per share (2019: 384 cents per share).