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Sales from our South African Retailing business
were up by 2% in Rand, driven by effective marketing and merchandise strategies.
This growth was achieved against a background of increasing
unemployment and tough competition from other retailers on price and credit
offers.
Operating profit in Rand grew by 25% while operating margin improved by
over four percentage points to 25%. This improvement was driven by growth
in financial services, by cost saving initiatives and by a substantial
reduction in bad debt costs resulting from more stringent credit and collection
policies, which were developed in conjunction with Experian.
The Rand weakened from an average rate of £1= R10.8 in 2001 to an average
of R13.5 in 2002. This reduced reported sales by £30m and operating profit
by £7.5m in the year. The closing rate at 31 March 2002 was R16.2.
GUS has recently hedged the value of some of its South African Retailing
assets against further currency risk. This is expected to increase the
Group’s interest charge by about £3m in the current financial year.
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South African Retailing |
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2002 |
2001 |
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Underlying |
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12 months to 31 March |
£m |
£m |
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change* |
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Sales |
123 |
150 |
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2% |
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Operating profit |
30.9 |
30.7 |
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25% |
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Operating margin |
25.2% |
20.4% |
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*at constant exchange
rates |
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