Truworths (TRU) Results Snapshot 1H23

Diluted HEPS 487cps (+9.8% y-y) and DPS of 320cps (1H22:
300cps). Dividend cover maintained at 1.5x.
Sales growth +13.7% y-y, with Truworths Africa + 13.8% y-y and
Office UK +13.6% y-y (in GBP).
GPM drop slightly to 53.5% from 53.6%, with Truworths Africa’s
GPM lower at 56.0% (1H22: 56.4%) and Office higher at 46.6%
(1H22: 45.7%).
Expenses to sales ratio worsen from 34.2% to 36.9%, due to
expense base normalising post Covid, and higher trade debtor
costs (+76.7% y-y) due to growth in book.
Operating margin drop from 26.5% in 1H22 to 24.7% in 1H23.
Debtors book grew by 19.3% y-y. Doubtful debts allowance
unchanged at 20.7%. Net bad debt to book at 13.4% (1H22:
Cash dropped sharply to R482m (1H22: R2136m) while gross
debt increased to R1336m (1H22: R522m).
Sales in first 7 weeks of 2H23 up 13.9% y-y with TRU Africa
+5.7% y-y and Office UK +39.2% y-y (in GBP; expected to
normalise from April).