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Review of 2021

Despite extraordinary macro conditions, cash generated from operations totalled R4.1 billion, of which R1.9 billion was returned to shareholders through dividend payments and share buy-backs.

Lockdown restrictions in South Africa during the second and third waves of the COVID-19 pandemic adversely impacted economic growth, employment, consumer confidence and spending as well as retail foot traffic.

Trading conditions were exceptionally challenging in the UK in the aftermath of Brexit and the closure of Office stores for 18 weeks when all non-essential retail activity was suspended due to COVID-19.

The Group’s balance sheet remained robust throughout the reporting period with a significant improvement in all key financial metrics.

The performance of the Truworths credit book and the turnaround of Office UK, both of which were critical material issues during the period under review, exceeded expectations despite the unusual and challenging international conditions.

Strong credit account performance relative to the market, with improving market share of new accounts, healthy improvement in book quality as evidenced by a declining provision for doubtful debts, improved active accounts and credit sales as the Group continued to apply its credit management strategies consistently.

The turnaround strategy in Office, the Group’s UK footwear retailer, is starting to gain traction as the business returned to profitability this year.

Online sales accounted for 16% of the Group’s retail sales, increasing by 30% over the prior period with Office online sales accounting for 63% of its total sales (18% growth) and Truworths Africa segment online sales accounting for 2% of its total sales (127% growth).

Brand portfolio expanded with the launch of Primark, targeting the value segment of the South African fashion market, and Fuel, a trendy young menswear brand.

Succession planning accelerated with the appointments of a Deputy Managing Director, Truworths Ltd, a Group CFO, a Managing Director, Office UK, three new directors to the Truworths International board, seven new directors to the Truworths board and several divisional director appointments in Truworths and Office.

Truworths International’s 2020 Integrated Report was ranked 7th in the Ernst & Young (EY) 2021 Excellence in Integrated Reporting Awards. This is the 14th consecutive year that the Group has been ranked in the top 10 of the EY reporting awards and is the only company on the JSE to achieve this recognition.

The Group again qualified for inclusion in the FTSE4Good Index, recognising its leading environmental, social and governance practices.

Group financial performance

Retail sales up 0.5% to R17.0 billion
(2020: R16.9 billion)

Gross margin higher at 51.0%
(2020: 50.8%)

Trading expenses down 13.5%*

Doubtful debt allowance to trade receivables at 23.4%
(2020: 30.2%)

Trade receivable costs down by 52.6%

Operating profit up 23.5%*

Operating margin at 18.5%
(2020: 15.0%*)

Headline earnings per share up 26.8%

Cash generated from operations R4.1 billion
(2020: R4.5 billion)

Return on assets 24%
(2020: 13%*)

Net cash to equity 9.3%
(2020: 0.7%)

Share buy-backs of R768 million (19.3 million shares)

Annual dividend per share up 25% to 350 cents
(2020: 280 cents)

* Adjusted to exclude goodwill and intangible asset impairments in 2020.


The uncertainty around COVID-19 is expected to continue for many months ahead and this will be compounded by vaccine hesitancy and roll-out rates in South Africa with approximately 23% of the adult population having been fully vaccinated, potential new variants of the virus emerging and the risk of further waves of infection.

The Group’s robust balance sheet, strong cash generation and ability to manage margins and costs effectively will continue to provide resilience in the current environment of depressed consumer spending and weaker demand for fashion apparel.

Retail sales growth will be supported by continued recovery and growth in the credit account book, remodelling of emporium and large stores, new and expanded store retail concepts and brands, expansion of the e-commerce offering and investment in technology to offer customers a true omni-channel retail experience.

Trading in the first two months of the 2022 financial period was severely impacted by the civil unrest and rioting in KwaZulu-Natal and Gauteng in July 2021 as well as slower consumer spending when stricter lockdown regulations were applied in response to the third wave of COVID-19 infections.

Outlook for 2022


As in the rest of the world, uncertainty around COVID-19 is expected to continue, compounded by vaccine hesitancy and increased infection rates in the UK and Europe, potential new variants of the virus emerging and the risk of further waves of infection.

The Office turnaround plan aimed at restoring the profitability of the chain continues to gain traction despite being adversely impacted by COVID-19 limitations.

The appointment of a new Managing Director will facilitate focus areas in the year ahead, which will continue to be stock management, the closure of loss-making and marginal stores, remodelling of important high-profile stores, upgrading stores generally, an expanded e-commerce offering, investment in information technology systems and in payment options for customers, and ongoing expense control.

High street footfall remains under pressure in the UK due to COVID-19, particularly in major city centres which are dependent on office workers and tourists. However, the rapid roll-out of the UK’s COVID-19 vaccine programme, with almost 70% of the population having been vaccinated, is expected to reduce the risk of further lockdown restrictions and support the recovery of the retail sector.