Seardel Investment Corporation Limited

Tuesday 07 February

The group is the largest clothing and textile manufacturer in Southern Africa and is fully dedicated to achieving and maintaining its world class marketing and manufacturing standards. Its inherent financial strength and manufacturing expertise will ensure that it maintains it's leadership role in the South African environment.
SEARDEL is involved in many diverse areas of the economy. Over the years it has achieved success and recognition for its well-known brand names, many of which have become market leaders. Its main activity is the manufacture and distribution of mens, womens and childrens apparel. Its other activities comprise the manufacture and distribution of textiles, toys, consumer electronics, and travel. It also has property investment interests. Seardel is committed to upholding its published philosophies, achieving its goals and maintaining its consistently high standards.

Unaudited Group Interim Results
(for the six months ended 30 September 2011)

Despite the difficult trading conditions experienced in the period under review, most of the Group’s business segments made good progress with operating profit growth being shown in the Textiles and property, as well as the Toys, Stationery and Electronics segments. However, the good work done in these areas was blighted by the very disappointing performance of the Clothing Segment which saw its operating loss worsen significantly in the current period.

The group as a whole managed to return to the black for the six months ended 30 September 2011, posting an attributable profit of R1,4 million compared to an attributable loss of R71,3 million in the corresponding period. The main reason for the improvement was the cessation of the operations that were reported in the discontinuing line in the prior year.

Turnover from continuing operations was up 3% due mainly to increases in raw material prices rather than increased volume. The Group’s gross margins came under severe pressure being down 4,7% from 23,6% in the prior period to 18,9% in the current period. Although margin pressures were experienced across all the Group’s business segments, the most severe effects were felt in the apparel manufacturing business where increases in raw material and production costs were unable to be passed on to customers while reduced volumes also meant reduced overhead absorption.

Although the Group’s gross margin was down, operating profit was up R17,9 million (72,5%).....