HOW WE CREATE STAKEHOLDER VALUE
OUR ABILITY TO CREATE VALUE FOR OUR SHAREHOLDERS IS CLOSELY LINKED TO THE VALUE WE CREATE FOR OUR CUSTOMERS AND EMPLOYEES, AS WELL AS OTHER STAKEHOLDERS INCLUDING SUPPLIERS, REGULATORS, LENDERS, LANDLORDS, GOVERNMENTS AND THE BROADER SOCIETY IN WHICH WE TRADE.
Value creation, preservation or erosion over time contribute to the increase, decrease or transformation of the Group’s capitals through its business activities and outputs. We are guided by our Business Philosophy, through both prosperous as well as challenging times, and this ensures consistent focus on long-term value creation.
Detail on the Group’s stakeholder relationships, and the engagement issues addressed with these stakeholders over the past year, is covered in Managing stakeholder relationships.
SHAREHOLDERS
STAKEHOLDERS
Our shareholders are the principal providers of financial capital and by delivering sustainable, long-term value, the Group ensures continued access to capital.
Refer to Our Business Philosophy for our Vision for shareholders if we are fulfilling our Business Philosophy.
HOW WE CREATE VALUE
- Delivering on short and medium-term action plans and projects to achieve the strategic objectives of the Group
- Executing merchandising strategies
- Preserving and expanding our world-class margins by growing revenue faster than expenses over time
- Maintaining tight control of operating and capital expenditure
- Generating healthy returns and maintaining an efficient capital structure
- Managing the debtors book efficiently and responsibly
- Prudently managing cash, working capital and gearing levels
- Returning funds to shareholders through dividends and share repurchases
HOW WE MEASURE THE VALUE CREATED
- Gross margin, operating margin, inventory turn, return on equity, return on assets and asset turnover are within guided target ranges
- Return on invested capital greater than the weighted average cost of capital
- Medium-term growth in headline earnings per share being greater than inflation
- Dividend growth
- Long-term share price appreciation
CUSTOMERS
STAKEHOLDERS
The members of the public who are our customers are the consumers of our products and services, and our primary source of revenue. This revenue-generating capability enables us to ultimately create financial value for shareholders.
Refer to Our Business Philosophy for Truworths and Office’s Vision for customers if we are fulfilling our Purpose.
HOW WE CREATE VALUE
- Offering fashion which enables customers to look attractive and feel successful and confident
- Designing, procuring and selling wide ranges of curated and tasteful apparel, footwear and homeware of superb quality and intrinsic value
- Showcasing unique aspirational fashion brands through an extensive footprint of exciting and visually appealing stores supported by the convenience of online shopping
- Enabling customers to buy merchandise by offering multiple payment methods
- Developing knowledgeable employees to serve customers with passion
- Launching new merchandise brands and store concepts to maintain customer appeal
HOW WE MEASURE THE VALUE CREATED
- The net promoter score measures customers' likelihood of recommending Truworths and Office respectively
- Growth in new account applications and the number of active accounts are indicators of the demand for Truworths' merchandise
- Social media following is an indication of fashionability and desirability of merchandise
- Growth in our loyalty base and monitoring the level of voluntary identification
- Monitoring online customer engagement metrics
- Generating competitive financial returns
- Maintaining a strong balance sheet
- Investing in stores, distribution facilities, technology and infrastructure for future growth
- Retaining income for growth as well as organic and acquisitive expansion
- Applying best practice governance and risk management principles
EMPLOYEES
STAKEHOLDERS
Through our employees we strive to create value by meeting the fashion, quality and service needs of our customers, and by providing the Group’s business support services.
Refer to Our Business Philosophy for our Vision for employees if we are operating according to our Values.
HOW WE CREATE VALUE
- Providing employment and creating job opportunities
- Transforming the employee base to reflect diversity and equality
- Preserving jobs, even during challenging times, through prudent human resource practices
- Creating an environment where employees are motivated and encouraged to contribute innovatively
- Paying employees market-related salaries and benefits, and rewarding employees for excellence through incentive schemes
- Encouraging learning and sharing of knowledge, and developing staff to exceed customer expectations
HOW WE MEASURE THE VALUE CREATED
- Job creation, through the number of permanent employees
- Diversity, employment equity and gender equality, through the percentage of employees from designated groups
- Employee satisfaction and retention, through annual turnover rate of permanent employees
- Commitment to training and development, through skills development spend
- Organisational surveys which measure perceptions of our adherence to our Values
- Review of exit interviews with departing employees to understand if we are falling short on delivering on our Values
OTHER GROUP STAKEHOLDERS
STAKEHOLDERS
Our broader stakeholder base includes groupings that have a material direct or indirect impact on our business and influence our ability to create value in the long term.
HOW WE CREATE VALUE
- Contributing to national and local governments, and regulatory institutions
- Supporting local and offshore manufacturers of products, lenders, service providers and property landlords
- Assisting in growing and developing society through good corporate citizenship, transformation, black economic empowerment and job creation across the supply chain
- Adopting sustainable business practices aimed at minimising our impact on the environment and contributing to the betterment of society
HOW WE MEASURE THE VALUE CREATED
- Government: contribution of corporate taxes and duties, and legislative compliance
- Suppliers and landlords: purchases of merchandise and other services, and rentals paid
- Lenders: meeting interest and capital repayment obligations timeously
- Communities and broader society: social value created through corporate social investment, supplier and enterprise development, and environmental programmes