Truworths sales buoy 10% HEPS hike

Truworths, a leading retail brand, has shown resilience and agility in the face of economic challenges, with a 10% hike in headline earnings per share (HEPS). CNBC Africa recently sat down with Michael Mark, the CEO of Truworths, to discuss the company's performance and future prospects. The retail sector has faced numerous obstacles in 2022, from economic downturns to load shedding, but Truworths has managed to navigate these challenges effectively. Mark expressed his satisfaction with the company's half-year results, highlighting the success of both the South African and UK businesses. The UK division, in particular, has exceeded expectations and is a major contributor to Truworths' overall performance. Mark emphasized the importance of staying focused on core strengths and operational efficiency to drive success in a challenging retail environment. Truworths' diversified business model, with a strong presence in both local and international markets, has been instrumental in supporting its growth. While the UK business has performed exceptionally well, the South African operations have also shown resilience despite economic pressures. Mark underscored the need for retailers to be well niched and have a sound operating model to thrive in a tough economic climate. Looking ahead to 2023, Mark remains cautiously optimistic about consumer spending trends. While many consumers have resumed their shopping habits post-COVID, ongoing economic challenges may impact discretionary spending. However, Mark believes that well-positioned retailers can still attract customers and drive growth. Truworths' commitment to sourcing locally and supporting local businesses has been a key element of its strategy. With nearly 50% of its products sourced locally, Truworths has not only contributed to job creation but also enhanced operational efficiency. The company's focus on a balanced mix of local and imported products has proven successful, providing customers with a wide range of high-quality offerings. In terms of dividends, Truworths has maintained a conservative approach, with a consistent dividend cover of one and a half times. This prudent financial strategy has ensured stability and adequate returns for shareholders. Looking to the future, Truworths is optimistic about its growth prospects in 2023. The company's various divisions, including kids, office London, SYNC, and Fuel, are performing well and have the potential to surprise the market positively. Truworths' continuous innovation and strategic focus on product diversification are key drivers of its success and position the company for further growth in the coming year.