Marcel Golding Photo: Independent Media Marcel Golding, CEO and a major shareholder at Rex Trueform Group, says South Africa needs higher economic growth
Image: Independent Media
Investment holding group Rex Trueform passed the dividend after subdued sales at its clothing stores and headline earnings per share fell 3% to 97 cents in the six months to December 31.
The group, which has more than 100 retail stores among its investments, on Friday reported a 4.5% decline in revenue to R458.1 million, while the gross profit margin appreciated to 52.4% from 46.5%.
The operating profit increased 9.6% to R45.4m. Net asset value increased 3.3% to R21.17. The thinly traded share price was unchanged at R11.27 on Friday afternoon on the JSE.
CEO and significant shareholder Marcel Golding said in the results announcement that South Africa’s economic growth is forecasted to be 1% for 2025, an improvement on 2024, but still well below the desired growth levels, with energy and logistics being the driving factors behind the low growth forecasts.
“Managing the associated risks and negative impact on profitability levels in each of the operating segments remains key elements of the company’s strategy. The group continues to ensure that operating segments have resilient financials and a competitive advantage in their respective industries,” said Golding.
He said they were investing in alternative energy sources to reduce the current and future adverse impact on operations and profitability of power outages.
Group revenue fell in the interim period mainly due to a decrease in retail segment turnover. Other revenue, comprising media and broadcasting income, rental income, tenant recoveries, and management fee income, increased by 1.4% to R95.9m (2023: R94.6m).
Investment income, consisting mainly of finance income from associates, decreased by 0.8% to R18.8m (2023: R18.9m).
The group realised an operating profit of R45.4m. Net profit after tax was R23m (R25.2m), resulting in earnings per share of 98.1 cents (100 cents).
The group's capital and reserves fell by R4.3m to R471.9m, contributing to a decrease in return on equity. The lower capital and reserves were mainly due to equity transactions relating to the increased shareholding in existing subsidiaries.
The 6% decline in retail segment sales reflected the generally subdued consumer demand brought about by high interest rates and the constrained economic environment, said Golding.
Gross margin had increased to 52.9% (46.1%), in line with strategy, resulting in gross profit increasing 6.5% to R188m. There were 105 (2023: 102) retail stores as at December 31, 2024.
Property segment revenue increased 15.9% to R47.9m. No property acquisitions were made during the period. The segment realised a taxed profit of R6m (R8m).
Media and broadcasting revenue fell by 2.7% to R56.8m (R58.3m). The segment realised a taxed profit of R2.6m (R2.2m). The group has a majority stake in Telemedia, which specialises in media broadcasting facilities.
The company's water infrastructure investment yielded an equity-accounted loss of R1.9m (R4.2m profit) and a net profit after tax of R1.9m (R7.6m).
“The underlying operating subsidiaries are profitable and cash generative,” Golding said. Group services contributed a loss of R0.7m to after-tax earnings (2023: R0.8m).
Business Report