Trading statement for the quarter ended December 2004
13 January 2005
The Board is delighted to report ongoing buoyant sales for the 13 week period ended 1 January 2005. The favourable retail environment supported by low interest rates, real wage growth and higher consumer confidence extended into the period. Edcon, with its offerings of well-priced merchandise and appropriate fashion, delivered an impressive sales increase of 24% for the quarter, when compared with the same period last year. Gross profit for the quarter increased by 26%. Group sales for the month of December were 32% higher than last year which would suggest further market share gains.
By division, sales were as follows:
Sales increase for quarter ended 1 January 2005
Contribution to sales
Average Retail space change
The Group’s largest chains recorded an excellent performance, with Edgars’ sales increasing by 22% and Jet’s sales up 28%. All major merchandise businesses contributed to the success. Even more impressive was that the results were achieved with deflation in Edgars of 2% and Jet of 20%, while average trading space increased by 7% in Edgars and 6% in Jet.
Sales in CNA and Jet Mart increased by 5% and 1% respectively, as these chains worked to improve merchandise assortments and rationalise price points. Boardmans, in its first festive season as part of the Edcon Group, recorded sales in line with targets.
Collections from customers for the quarter were strong and Edcon’s debtors’ book remains in a sound condition. At the December 2004 billing, 89% of the debtors’ book was current and able to buy, versus 88% in December 2003.
After a good festive season, stock turns have improved further to 5,6 times from 5,1 times in Edgars and 8,8 times from 6,9 times in Jet. Merchandise is current and markdown requirements in the next three months should be well within planned levels.
Based on the sales and profit performances for the quarter, which were substantially in line with internal plans, the Board is able to reiterate the earnings guidance it provided in November 2004, namely that: “based on current estimates, headline earnings per share for the year to March 2005 will be approximately 60% higher than those reported last year. Seven percentage points of this increase can be ascribed to the inclusion of the scheduled non comparable additional trading week.”
In accordance with the JSE Listing Requirement 3.4 (b) (vi) (2), this trading statement has not been reviewed or reported on by the Group’s external auditors.