Rex Trueform, owner of clothing retailer Queenspark, has reported a surge in profit for the year ended December, boosted by its retail business which reported an increase in sales of nearly 30%.
The company, run by Marcel Golding, said on Friday group revenue shot up 49.4% to R470m, with the lion’s share coming from an increase in retail segment turnover.
The Cape Town-based company said despite the surge in retail sales, the division’s gross profit was negatively affected by reduced consumer spending as a result of the increasing cost of living worsened by power cuts.
The retail gross profit margin decreased to 48.5% from 53.5% a year earlier. The group reported an operating profit of R103.2m in the financial year under review compared with R39m in the previous year. The company realised a net profit after tax of R55.1m, up from R27.2m in 2021.
Rex Trueform was established in Cape Town in 1937 and has been listed on the local bourse for 78 years. The group has interests in the retailing of fashion apparel, property, water infrastructure, media and broadcasting sectors.
It said its other revenue, comprising media and broadcasting income, rental income, tenant recoveries and management fee income, increased 476.7% to R84.5m.
The company said this surge was mainly due to the “acquisition of Telemedia and property assets”.
The company, with African & Overseas Enterprises, in 2022 acquired a controlling interest in Telemedia, a 40-year-old company that services both local and international broadcasters.
The group said the economic outlook presents challenges and opportunities.
“The issues facing the economy, including high inflation and interest rates, a rising cost of living, an energy crisis and low economic growth forecasts, will require careful navigation in the coming months. Managing risks and sustaining profitability remain key elements of the company’s strategy in this volatile climate,” it said.
“The group is seeking to ensure that operating segments have resilient financials and a competitive advantage in their respective industries. In response to the widespread energy crisis, the group is investing in alternative energy sources to reduce the current and future adverse affect on operations and profitability.”
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