Good afternoon, everybody. Welcome to the 2026 February half-year results presentation of Truworths.

In the room with me on virtual is Mannie Cristaudo and Sarah Proudfoot, who are our joint deputy CEOs. You all know them pretty well.

Then there's Reon Smit, who's our Financial Director. I'm going to go through the presentation as speedily as I can because it will be published on the internet in the next hour or two afterwards anyway, so that I can try and get to the questions and answers stage within 35 minutes or so, and then we've got at least 20, 25 minutes until 2:00 to answer questions.

We we we have obviously read some of the initial analyst reports that came out this morning and yesterday, we've tried to even include those responses in those in in our presentation. It follows our normal agenda.

First and foremost, I'm going to talk once again about our business philosophy. This is not to annoy you or bore you, it's because I'm trying to give you a filter of how we think.

This filter affects our interactions with shareholders as well, because when when you give us input, whether it's positive input or critical input, we don't ignore it. We don't just blindly follow it.

We we filter it through our philosophy every single time, because that's how we think. I'm trying to explain to you how we think.

Essentially, it's a simple thing for especially for the new shareholders, I've said it many times before, we publish it. We don't even mind publishing it, because we think, well, if our competitors saw it, it wouldn't matter because you can't copy someone else's DNA.

You don't want to be someone else, you have to be yourself, and this is us. This is what we are.

We we say that we have three pillars to our business philosophy through which we filter every single thing we do, including feedback to and from shareholders. The first one is the purpose.

Why why do we exist? The way we ask ourselves that question, we say, well, if tomorrow Truworths didn't exist instantly, the very first minute it didn't exist, or and the same for Office, then what gap will arise in that environment?

That's really what we say, and then we talk about how we achieve and fill that gap. That's what our external purpose is, as simple as that.

Our value system is how do we internally interact with each other? Priority-wise, it means the first and foremost thing is innovation and passion, and then contribution-orientated.

Now, what do we mean? We mean when we recruit someone, or when we promote someone, or when we deal with anybody in our business, we always think first not about how much do they want to earn or how much do we pay them, which you'll see is part of the outer circle, or whether they like to work in teams, that's also important, but it's part of the outer circle.

It's more to do with the fact that we, first and foremost, need to know are they innovative and passionate? Secondly, are they contribution-orientated?

Do they contribute more than they consume, and do they contribute before they consume? We think like that.

We've got these two sort of pillars. One is what role do we have in our societies, and two, how do we govern ourselves?

Now the more important part for you is how we judge whether or not we're doing it well or badly is we say what do we think our stakeholders would say if we were doing it properly? For customers, you can go and ask them, because we can see how they shop with us.

We do surveys all the time. For staff, it's also quite easy.

You go and do surveys, and you talk to them, and you see exit interviews. For shareholders, it's also not hard to see how they speak, about you, because they tell you.

Shareholders publish reports, they talk to the press, and they tell us face to face. It's not hard to get to know what they say.

Then what our strategy is, which changes all the time every we're permanently changing strategy, is how do we get the difference between customers, staff, and shareholders, what they say, but what compared to what we wish they would say, which is the vision of what we wish they would say, how do we get them aligned? Our strategy is to realign them, bearing in mind, hardly ever are they aligned.

You never say there's perfection. Shareholders, customers, staff, they're all saying exactly what we want, and then there's government.

It doesn't work like that. They always say different things.

Then we've got to have a strategy for dealing with it. Do we believe them?

Do we want to change it? Do we want to change our strategy to deal with it, or do we communicate differently?

That those are strategic imperatives. All I'm trying to explain about this is that's our filter when we get communication to or from shareholders, customers, or staff.

Our filter is this business philosophy, and it's important for you to know that. When you look at it going to that filter, we are we we try and say we are we want shareholders to say we are long-term investors in Truworths because we trust in management capacity to execute strategies which are innovative and which deliver significant value over time.

Sometimes they do say that, and some always say, but some say the opposite. Management's too old and and stuck in their ways.

Company isn't moving forward. Don't they get it?

You should be in the value space. Obviously, we don't ignore those things, but we filter it through our business philosophy, and then we debate it.

Do we need to change strategy? Or even, in the extreme, is there something wrong with our business philosophy?

Then we decide one way or another, obviously, in consultation with our board and management. That really is our process.

I'm not debating the issue itself, I'm explaining the process to you. We remain true to that business philosophy.

We we we stick to it, and we are committed to it. That does not mean we don't change strategy.

It means we don't change the business philosophy too easily, but the strategy we're always are changing. We are geographically diversified well now in South Africa and the UK.

That, as has been intentional, and it's going well. Always have been and always will be, as long as this management team is in place, and I think this board, strong cash-generative in both businesses.

We we we do not think in the in the in the sort of risk, international macro environment that is so volatile, permanently volatile. Sometimes it's good, sometimes it's bad, one other one good.

We always believe that you you'd better have a strong balance sheet. That is our fundamental mantra.

Even when we bought Office, we said, will we be able to pay the debt off in 2 to 3 years? That was critical to us.

We think like that all the time. Some of you call it a lazy balance sheet, we call it good retailing.

It's but again, it's our business philosophy. We we generated more than 1 billion cash as as we sort of always do every 6 months.

Then, we bought backs since it's it's interesting to note this, that we bought back 750 million rand worth of shares in the last period. Since 2020, we bought back 3.2 billion rand worth of shares.

I think it's about 14% of the company, something like that. There is a question I've already seen about how much more we're going to buy back.

I I don't think I'm going to tell you that, but I will tell you that every quarter, our board looks at our solvency and our cash flow for the next 18 months, and we get a mandate from them every quarter, and we update it every single board meeting. We update it, and we form a view with them.

It's a very clear mandate, and then we implement it. When we do it, just so I'm I'm going to tell you the methodology as opposed to the quantum, what we do is we feed it through the buyback over time, because we don't want to influence the share price.

We'll never buy more than I don't know what the figure is, maybe 15% of the volume in that day, and never more than the volume-weighted average price for the day, and we might feed it through over a month or two or three, because we try to do it gradually over time, but always within the board's mandate, and with always with a very clear focus on the on the cash flow. We we may actually the board and we might take a more positive view when we think the business is particularly undervalued.

We did do that after COVID, because we could see that there was a fundamental misunderstanding. We we explained everything to shareholders very transparently, but then we decided, well, it's still an opportunity and we were aggressive.

In in another moment, we might be less so, we we we manage that. Similarly, when our cash was under a bit of pressure because of the DC being built over the last 4, 5, 3, 4 years, we were a bit more conservative, but still we spent 750 million.

We've we have stuck to this dividend cover of 1.5 times for 12 years now without an exception. Even during COVID, we we sort of we didn't say, well, careful, it's COVID, we're not going to pay the dividend.

We we were one of the fewer companies, I think, that stuck to our dividend policy. Our 10-year average dividend yield that can talk to dividend of cash flow, as well as, I suppose, the valuation of the company, has been 6.7%.

Over the 10-year period, we just decided to look at that number, we don't normally, but we did, we we have paid dividends of 17 billion rand. If you add that together with the share buybacks, it's probably over 24 or 25 million over 10 years.

We are generating cash. The focus in '26, we have these focuses every year.

It's sort of themes for a business. One year a couple of years ago it was it was opportunity in adversity.

There is adversity in adversarial circumstances, what's the opportunity? We do think like that.

This year, happy to tell you, you might like it or not, I would think you'll like it, it's it's accelerate, but with discipline, because we all know, it's not hard to know. It's a great business, it generates cash, strong balance sheet, great brands in two continents, well run, but Truworths Africa top line is a challenge, and Office could become one in the future.

What are we going to do there? Then we talk about accelerate while maintaining all the business philosophy disciplines that you know we are well known for.

The issue in our business is obvious, everyone knows it, you know it, but, I don't want you to think we don't know it. Our the obvious thing is that we have to get the top line, within reason, going as much as we can, especially in Truworths Africa, but also in Office.

We have we we're doing a lot of things organically in Truworths. Essentially, our business is an organic growth one.

We have made acquisitions over many years. We we we do believe in acquisitions, but it's within the constraint of the business philosophy and what our capabilities are.

We're not a business that believes in a decentralized sort of a massive decentralized business. We we didn't think like that.

We're not saying others are wrong if they do, we don't think like that. We think how can we manage manage it properly, how can we make sure that if we are responsible for the asset, we can intervene actively, especially when it's not doing well, and so we think like that.

Therefore, acquisitions have to be strongly aligned with our within our capabilities, number one, and to our business philosophy. Therefore, you're dependent on organic growth when you think like that, and you can see what we're doing, very aggressive growth in real estate in Office.

Why? Because it's working.

On the Truworths side, we've got to be innovative with our brands, with our merchandise, with our thinking in this environment. We are on a mission at the moment, a real mission, to to to really accelerate our growth on top line, especially in Truworths Africa.

Our new DC is working well now, and there's tons of capability that comes with that, but that's not all. It's really about the innovation in the merchandise, the way we think about our merchandise and offering.

Then credit, we we tried to do some novel things in the credit industry. The sort of the market is complicated.

There's credit cards, there's our own in-house credit, there's debit cards, there's buy now, pay later, there's there's so much going on in in the credit market and industry. We have to make sure in our credit environment, we are right up there with the best of them with the best form of credit packages and menu to offer the customers, but also, also our communication and the method of our communication and style has to be top-notch.

Then retail trading space, that goes without saying. In Truworths, there are things happening there, but the percentage is always going to be 1%, 1.5% in good times, maybe 2%, but it's very hard when you've got sort of 850 stores in a country like South Africa to to sort of add real estate in percentage terms that's significant.

Office is the opposite. Therefore, we get back to the same old thing, which is it has to be organic and acquisitions that are aligned.

Then e-commerce growth is has been fantastic. In Office, it's stable, great at 45% or so of sales.

In Truworths, I think it's over 7% now from 2% not even 3 or 4 years ago. It's a very fast-growing area.

In South Africa, the customers do like to shop in malls, but the e-commerce opportunity is excellent, we we sort of have a one-dimensional, two-dimensional. We link the two together.

One customer, but with lots of multiple methods of shopping with us, one critical one being e-commerce, of course, the other one stores. We we are making great headway there, I think.

Then in Truworths' case, we we Well, Truworths and Office, we basically run the two e-commerce in Office and Truworths as if they're one, two different teams, but work together almost hand-in-hand, and we enjoy working like that. We know the Office people do too.

The Office and Truworths really two continents, but a similar thinking, albeit two different markets, two different groups of customers, and quite a lot different product, but aligned. Then invest in Office, clear, store remodeling, new stores.

We bought the DC. Why did we buy it?

We've been asked a few questions, why did we buy it, for a couple of million pounds? It was because we we, we're there.

We're in Kilmarnock. It's it's our There's nothing much else in Kilmarnock.

We are for us it's it's in Scotland. It's been there for a long, long time.

The landlord was wanting to sell. It wasn't good for us to be in other people's hands.

The money Office could accommodate, I think the cash flow is generated in is about 2 months or something, we decided, it's it's a strategically a good thing to do. By the way, that came with IFRS 16 implications, which is some of the questions why is there such a big IFRS 16 other income gain in Office.

It's because of that, there's an impairment that we've created over time, IFRS 16 comes in there, and foreign exchange, there are issues with foreign exchange changes, those two things are the other income in Office. There's a big project in Office at the moment with the IT environment, because we are trying to catch up as quickly as we can with Truworths, and there's a lot of focus on our own made-to-order range, our own branded shoes in Office.

It used to be a much higher percentage than it is nowadays, but every last 2 years has been growing nicely, margins higher. There's a limit to how far we want it to grow, but it's going well at the moment, and maybe Sarah will talk to it later.

Then the strength of e-commerce in Office is is undeniable. I just want to move my screen around here because it's blocking.

This is the group. You're going to see these figures.

You've already seen them, and you're going to get the presentation anyway. The the main thing I'm we're highlighting at the bottom right there is that 14.4% down in cash generated cash generation, that's related to the timing.

The the true change on last year is 2% up in cash generation, and and in the period it's it's significant amount of money. As you can see, 2.8 billion.

Gross margin in the group steady on last year. We still haven't quite got back to the 53.5%, which is group, Truworths is higher, as Office a bit lower.

My guess, it's very hard to because there are questions that are going to come again about it, my guess is that Truworths will slowly keep on improving gross margin back to its historical norm, not fast, but slowly. Office will probably be stable at a slightly lower figure for a year or so, I'm guessing, in the tough climate it operates.

On average, it might be like this with slight improvements as Truworths improves itself. That goes to other metrics, too.

When we look at return on assets, return on equity, asset turnover, we we sort of getting to normalization now. I can see return on equity has dropped from 56% at a high to 34%, but if you take out the impairment, the unwinding of COVID, the share buyback, this level that it's got, which is somewhere between 31% and 34%, 35% on return on equity, I'm I'm really we'll let's say this, we'll be disappointed if we can't stay within that range.

The same applies to return on assets. Return on assets of in the mid-20s upwards, that should be our norm.

We run a business, remember, we we don't think how do we gain market share on at any cost? I know that is another strategy, some of you believe in it, but read our business philosophy, we don't.

We generate cash and we want these returns to be stable at these levels. Our balance sheet, therefore, remains very strong, as you can see and as you already know.

Inventories are up a small amount, 5%, that's mainly Office. Truworths' inventories are not a problem in that way, but I'm not saying it's a problem in Office, that's due to Office expansion, and there's and there's a very healthy balance sheet.

I've told you about share buybacks already. This is a little bit more vision into it.

We we we have bought back 65 million shares since January. The average price was 49 rand 60.

The dividends, you know about. We've got an RCF facility which we talk about the bottom right there.

That's just to make you understand and be clear, which I'm sure you do know, but we want to point it out that not only are we very cash-generative and a strong balance sheet, we also have a facility that's that's there's a great amount of headroom. If you if you look at the net cash we would have had in the group, it's about 1.1 billion is a true figure for the 6-month period.

Group generated about 2 billion, but then we have share buybacks, paid dividends, etc., and the ladder tells you how it worked from a group point of view. Looking at Truworths Africa, which is, as I said before, Truworths Africa is actually hard to do what we want, but not hard to understand.

The expenses are great, the cash flow is great, the brand's good, strong management, great systems, but how do we get the top line to move? That is our challenge without sacrificing margin.

That is our challenge, and these numbers reflect it. The margins, the everything's good, but the top line has caused a problem for Truworths Africa.

There you can see it, that the top line was down by 3%, as was across. The expenses we managed to contain at -2%, and trade receivable cost was a big help there, but you can see all of our expenses we we manage very well.

You all know and you're all analytically inclined, if you top line doesn't work, we can't do this forever as your solution. We have to solve this problem, even though we understand there's a tough economy, it's constrained, we are very aware of that.

Whether we are successful in fixing it, we'll only know in future, but I can assure you it's not like we're blind to that. We know it.

You can see from this that remember, we've probably got a couple of hundred buyers, planners, more than a couple of hundred, it's a good few hundred in both businesses, and forecasters and trend experts, and yet, and they and they it's such a big business, many of them don't even know each other. It's not like they sit and share and everything's done the same.

They all have their own strategies and their own DNAs and their own direction, and there are central activities that manage it, but they they they're sort of encouraged to differentiate, if you think about it. Yet, this was across the board the toughness, from Identity, which isn't even in the emporium, YDE, which has got nothing to do with emporium, Truworths Kids, Truworths Menswear, Ladieswear.

Even in Menswear and Ladieswear, there might be 10, 15, 20 teams in each. I'm pointing out it would be easier to say that, oh, the everything's great, but Menswear's been a problem, we're going to focus on that.

It's more a bigger picture issue about how it was across the board. We have highlighted there that Ladies is about a third, Men's is about a quarter of our business, Kids has grown a lot, Identity is about 16%, Other is getting bigger.

A big part of Other is our Office London in South Africa, which but all of them, Loads of Living, jewellery, cellular, they're all doing quite well. Sync's there, but it's small, and it's going to be incorporated into Identity in the future.

Office London's a nice growing business. It's got limitations from a brand supply point of view, but increasingly reputationally from Office UK, but even the way we're running it, and it's sort of strong positioning and great results in South Africa, it's a growing business.

In Truworths, closed 21 stores, opened 22. A lot of that is movement of stores and making sure the real estate, the assets sweat as much as we can, we do a lot of that.

As you see, we've got 812 stores. The density, whilst good by international, well, especially South African standards, it has been declining from 40,000 to 35.5.

Yes, the 40 was extreme, I suppose you could draw a line from 2017 onwards and then with static, but I mean there's been inflation. Again, we're really talking here about top line, and it's true we could cut the real estate and make a real estate smaller, but we're very careful with that.

Real estate is hard to come by, and we are already in A+ positions in pretty much every place of South Africa. You don't want to give up great real estate, but we do consolidate when we've got small stores, albeit in great real estate, and we can incorporate them into an emporium, or add two or three small stores together, for sure we do that.

Nevertheless, top line is the only thing that'll fix that. Inflation, we had that hectic period in 2022 to 2024, and inflation's been very low.

You notice there's a bit of an uptick there. That's not because the rand isn't strong, you all know the rand is strong, and of course, that's good for inflation, but we have a strategic goal and and a plan going on behind the scenes, where I told you we're doing organic growth, organic growth means merchandise.

Our merchandise, we are elevating, interestingly. We are we are actually putting better product, smarter products, higher quality product, which is dealing with the negative inflation from the strong rand with positive, better merchandise, which is even more differentiated from our competitors.

That's what we're anticipating a bit of inflation, 2%, 3%. Truworths Africa gross margin slightly up 0.4%, and as I said earlier on, every half-year or so year, we try and tweak that up a bit to try and get back to the 56%, 55.5%, 56% in Truworths.

Stock turn's a little lower, we'll try and fix it. Tough times gives you lower stock turn, higher markdown, obviously.

We manage our stock hell of a well, but, if you're missing your sales plans, because we don't plan minus sales growth, we plan positive sales growth. We plan more than double digits, well, double digits if we can.

Because we don't think, well, let's plan minus, we don't, but then, of course, the consequences, no matter how well you manage, there's going to be overstock and you have to manage that really carefully. Expenses were, if you excluded foreign exchange losses and the trading expenses were actually down by 3%.

I'm not going to go through this, you'll see it afterwards. The trade receivable costs, let me focus 2 seconds on that, 10% down.

We're proud of that, and that's quite an important measure for you, because the 82 million ECL movement is a good thing. It it it because really, that one is extraordinarily scientifically managed.

There's no game-playing, or that is really the ECL allowance what it should be. That means there is a mild improvement.

It's not radical, but it's mild, and I have been saying that for at least a year and a half, I think, and that's the truth. These things do not change suddenly, but it's very good to be able to say there's a steady and mild improvement that we think will continue.

That's how we think. The margins are great, but with top-line pressure.

CapEx, the DC is fully built now. Last we spent the last 150 million.

Now it's just maintenance. We are, although we are going to buy some extra land we are allowed to buy alongside our DC.

The money is not significant, but next year we'll put it in. We're only doing it next year, and that will be the last sort of investment we make, that is for strategically for future.

Store renovation in Truworths, 124 million, last was 134, there's another 50 to go. We we manage that.

We don't need to spend a ton more. Computer infrastructure, we manage that carefully.

There's not a lot going on there. Cash flow, Truworths, extremely great cash-generator business, 2.1 billion.

It's a cash-generating machine, that and Office, the two of them are cash-generating machines. There the cash realization rate, 99%, you're not going to get much better than that.

Office UK, margins all pretty good. Profit before tax growth of 10%, admittedly, though, it only increased by 2% if you extract the IFRS 16 gains on lease modifications and foreign exchange.

Office is did have a bit of a challenging last few months. The the UK environment is tough.

We we don't want to kid about that, that's true. Our new stores, and when I say new, a lot of it's remodeled, our remodeled and new stores are fantastic.

Every one of you, if you saw the return on investment after tax of each decision, you would want to do it. I can assure you it's significantly better than the weighted average cost of capital by investment.

By the way, that includes the the Kilmarnock warehouse. We do that, we think like that, and it's much easier to get that than we are able to in South Africa.

That's why we're so aggressive. Nevertheless, there is a tough market out there, and the like-for-like is not that easy at the moment in Office.

Are we positive? Part of the problem, and I'll say it quickly now because there obviously are going to be questions, part of the problem really is macro in the UK, but the other one is some of the biggest brands are battling at the moment.

That because you see international reports from the biggest brands in the world. Those brands, which are the sort of mainstay of the business, are not doing quite as well.

There are green shoots in each of them, and then below them, there are lots of other brands and good ones that are doing hell of a well, but they don't make up for the tough ones. We're starting to feel quite positive about some of the tough ones are having a tough time.

We'll see, over the next 6 months, it will be interesting. Office grew by 10%, you know all that.

It opened five new stores, closed one. That is going to escalate because there are quite a lot coming up, but again, a lot of what happens in Office is a new store comes, but that's really an existing store that gets bigger or we rework it mainly that.

There are some new stores, and there are quite a few coming in the future, but there's a lot of real estate work in the future in Office. What I've just said accounts for why, although we've got a fantastic sales per meter in the UK, it has not grown in the last 2 years.

Gross profit trend very good in Office, but I I suspect the drop from 48.2% to 48% might even come down a bit. I'm not sure, though, it's very hard to tell because MTO is growing and and we might manage the stock even better, but my guess is you might have a slight downgrade in Office like it is there a bit more in the future.

Next year or so, I'm not sure. Truworths, on the other hand, is going to be slightly better, you work it out from there yourselves.

Office trading expenses also well controlled. Most of this extra is because of the new stores.

I'm I'm rushing a bit because I'm aware of the time constraints, and I know you're going to ask questions, but also know we'll see many of you the next few weeks. Office profit is is very good.

The margins are great, it's a great business, but that IFRS 16 thing, you know about. There's the store innovation, there we spent 4.5 million pounds on the DC.

It's not a massive amount of money, but it was strategically, for sure, the right decision. It would be silly not to do it, bearing in mind, we even have the impairment that you we're we could reverse now.

That's not the reason, we bought it strategically, it's the right decision to invest in it now, look after it, and it's going to be ours for a long time, why not? Then projected there's another 6 million in stores, we're spending about 12 million in stores in the UK.

As I said, if you could see the numbers, you'd want us to. Then there's the cash generation, great business, just like Truworths, cash-generating machine, realization rate 112%, last year 111%.

Account management, credit, TransUnion, Q24, '25, for for for a lot what I think that's 18 months, Manny, it's 52%, 52, I mean. That means that's slightly positive, which is a good sign, but it actually is reflected in our book, it's slightly better, but not crazy better, but it's consistent and has been for long.

That's a good thing, but it's not remarkable yet. The book quality is Summary: book quality, stable, improving.

Millions of applications we still get from young people. I don't know if I skipped something here.

No, I didn't. Millions of applications from young people.

There's a higher opening rate, there's a good growth of good balances, improved customer engagement, and we've got some new credit product offering coming. This is one I thought I skipped, that it comes afterwards.

This is where we we approve 100 accounts, let's say, because 100 100 apply, should I say, we approve, let's say, 25 of them on average. In this case, it was 29, we're getting better at slicing and dicing.

Then there's a big gap, for some reason, between what's approved and what actually come and open, but that has gone up to one of the highs in the last 5 years, about 18% now. That gap of the 11 is something we continuously working on.

As you can see, 18 out of 100 is not a bad number, especially when we're getting tons of applications. There you are, it is a bit down, but that's because we've been clever about who we are enticing to open new accounts.

We're talking about 2 million, 2.5 million young people who are trying to open accounts with us every year. By the way, when we every 6 months.

When we don't open, they automatically become loyalty members, and we continuously work on that group. It's a very positive group.

You can see that it's about 23% or less than 24, and another 18%. It's about over 40% are under 29 years old, 41% it says there.

Trade receivable stats, the main thing is to show the ECL is getting slightly better, and the accounts opened as a percentage of who apply is higher. This is an interesting one.

We we obviously these are, I stress now, I want to make the point, these are Truworths customers, not anyone else. We can't talk about what's happening elsewhere, but we can see Truworths customers who have overlap with our competitors.

That we can see, it's data available to us. It's quite interesting because we can see that the average, which is the dotted line of the competitors, when it comes to risk, they they differentiation between low, high, medium risk is far lower than ours.

If you look at Truworths, the highest risk has the lowest instalment, you would imagine, it's logical to do that. Medium risk, medium, and the lower risk has the highest instalment.

Obviously, you'd expect that. We we note in our competitors, but I stress, this is our average of all the competitors that we see on our data, has a much narrower band between medium, low, and high risk.

In fact, in the last 6 months, it's almost static. They're almost the same.

You can see how the high risk is grown significantly. I'm specifically not saying any individual competitors, I must stress that again, it's the average of the big competitors.

We do know the individual competitors, but we would never publish that. Sorry, I'm trying to move my screen and it's sort of got a bit stuck.

Here we go. Some of our strategic projects are I've sort of alluded to it, is aspirational fashion.

We are interestingly on a mission to upgrade our fashion, not go value, we're the opposite. We're expanding aspirational brands, better quality, and smarter product.

Therefore, that causes a bit of inflation. We are on a mission with essential fashion basics, fabric consolidation to get better prices of better value and better product.

We are enhancing the buying process. We've done an enormous amount of work in in systems and the information available to buyers, the way we managing them, and the the sort of working the inside organic part of the business, the most important, the merchandise.

The new DC is fantastic. We're working on size curves, markdown optimization.

We're very busy trying to organically accelerate with with a vengeance. I'm not going to go through all of these, new brands and we're working on Identity.

Some of them, we sort of soon opening a new concept, I think it's in Johannesburg, like two big stores in the next 6, 9 months. We're taking our ladies' and men's jeans, instead of having them separate men's and ladies', we're now putting it in a jean store.

It's going to be fantastic. Then we taking all of our street brands, those I'm sure you know what street is, but the youngsters, the real we're putting all of our brands together there and we're opening some new ones.

Offspring's one of the new ones, it's our UK we own the label Offspring, which is really a store concept of top-end sneakers, but we're putting a clothing range in South Africa into Offspring. It's the sneaker, and it's got this FUEL, which is already ours, and there's another one called Maschoff, already ours.

We're putting them in one store together. Then the Elevated, we've got in our novel strategy on Elevated.

I'm just giving you a taste of this, obviously, you can imagine there's much more to it. We've always had Daniel Hechter, but now we've got a new thing on top of that called Hechter.

It's even elevated from Daniel Hechter, and it's going to be in a store together there, Hechter ladies, Hechter men, with the one called Ovlà. It's Mediterranean, very sophisticated, upmarket.

If you imagine a store where it's Hechter, Ovlà, and then we've got our own Earthaddict and Loads of Living, together they make the upmarket aspiration. You've seen the jeans, upmarket aspiration, and I've told you about our our street.

That's our our concept. Then Identity, we're very busy with Identity.

Identity is a great brand. It's it's cheaper than Truworths, it's younger than Truworths.

We will incorporate Sync into it, which is cheaper than Identity and even younger. We think that's a little bit like Truworths, it's got its own little emporium evolving here, where we have got this younger, even more energetic than the already younger and well-priced product in Identity.

We're putting them together, and we have started to do it with I think it's going to be very successful. This is talking about what Identity stands for, because we do think Identity's got lots of upside, and and this is this the DNA.

We do, just by the way, we do this DNA with every single brand, but not just at the high level, at the sublevel, too. That's the way we try and keep our buyers focused on the task.

There's plenty of initiatives on supply chain, you can look at this afterwards, and you can ask us questions. I've already alluded to most of it, but supply chain is everything leading to arriving in our stores, and that's 1 year's to 1.5 years' worth of effort to get that supply chain to be as best as it can, and then, of course, once it arrives in our DC, getting it to store.

Those are the two aspects of supply chain, and there's much effort going into both. The last leg is the customers, e-commerce, engagement strategies.

We're on a we're we're loving AI. It's it's become part of our lives.

I'm They all tease me, I'm obsessed with it myself. We've had some fun and games with it recently with one or two shareholders.

AI is the future. You you've got to buy into AI, it's like saying I don't want to buy into calculator.

The world's changing, and we are right there. We are in the forefront of it in all aspects of our communication, of our thinking, of our technology, of our way we buy, but with always remembering that all of these things are with the art, you know.

You could talk about technology and science and systems and processes, but you'd better have the art, and the art is what actually makes it all work. We are aware of it, and I'm telling you because it's so exciting, and of course, it's very much involved in the customer space and predictive modeling and all that stuff.

Retail presence, emporium we're going to call it the new Truworths Emporium, the Formé. Go look it up.

AI helped us, by the way. That's that's where we're moving our new stores onto, and that's going to be the new emporium, the Formé, as we're calling it, much more upmarket concept.

This is that jean store I mentioned earlier, men's, ladies' together. Just giving you quick views of it.

The jeanswear, there's Inwear, the very young Inwear brand in Truworths, different look. There's a Betty, quirky, sort of cutes, pretty young fashion.

Here's Ginger Mary, our internationally fashioned, but yet African-inspired fashion, great brand. Lingerie, we make it into a shop, does well.

Shoes, bags, accessories, not a department, a shop. We think like that now.

How do we make them into a shop, even though it's within an emporium? Jewellery, how do we make into a store?

Then, like everyone else, everybody's on a mission with this now, Elements Beauty. Elements is already good, we're making it into a proper beauty store like everyone else's, but in our case, we've got the major advantage, we've got our own beauty brands.

Remember, we've got all the brands, and we've got lots of them, and customers love our brands and they are famous in South Africa, and then we are able to put our brands on our products. It gives us, we think, an advantage.

Then we've got our Kids Emporium with our lovely brands: LTD, it's got a profile, DNA, naughty, quirky, South African, but unusual, and then Earthchild, sustainable. Those three brands work brilliantly together.

Then our men's store with Truworths Man, Uzzi, various others. I'm giving you thing.

There's our streetwear store, again, within a store, FUEL, Offspring, Maschoff, there's one or two others, are all part of the street thinking and concept, all within our store. It will, by the way, when I say it's within a store, it's also going to be stand-alones.

You could imagine in a mall, you'll have all these things in one big Truworths Emporium, but then stand-alone in the appropriate sections of a big mall, you're going to have the street store in the street section, and the elegant, upmarket, sophisticated Context, Ovlà, the Hechter in a different part of the mall, even though it's also in the main middle of the mall in the big emporium. That's how we are now thinking and talking to landlords.

There's Loads of Living homeware, and this is the new Hechter. Of course, this is just a diagram, it's generated by by 3D, but it's it's giving you a feel of Hechter Paris, the upmarket product followed by the traditional Daniel Hechter, and then at the back in the new store, you walk into a Context.

There's the Ovlà and there's it there. Then there's the Truworths Man, and there's the Identity, and of course, our South African-based Office London.

We call Office London, that's the name for the South African, wouldn't say Office London in the UK, obviously. Office London, it's great, doing nicely, and there's the Sync that will still have some stand-alone stores, but increasingly it will become linked to Identity.

Office UK, lots going on with supply base, with suppliers, our made-to-order. We're busy with accessories.

You can imagine, you sell socks easily and that kind of thing in Office UK, but Office UK hasn't got tons of extra space, so that primarily sneakers and brands, it's not it's not apparel. Then there's a lot of work going on in the supply chain in Office, too, and I've told you we bought the new DC.

We're very busy with the stores. That just by the way, that accelerates.

In the next 12 months, more work on real estate, not all new, some new, but not all new. There's some examples, Covent Garden opened recently, you've got to be in Covent Garden, great, doing nicely.

There's Bristol Cabot, this is interesting one, we had a brilliant Office store here, and we've got this position next to it to make it bigger, we opened, that's the new Office right next door, we didn't want to give up the real estate. This over here is Office, the inside, but now this is the Offspring right next door in the in the same store that was before Office, so that's Offspring there on the right is Office, and the Offspring now, which of course is elevated, it's the top of the triangle.

Offspring is now starting to show its mettle by being independent of Office, and a different customer really. There is some overlap, but it's different and quite a lot of different product, and that's also become an opportunity, and that's store doing well.

Here's a Glasgow new store, Leeds Trinity, Plymouth, a Westfield London, beautiful store. We've always been there, but we made it much bigger, and look at that, it's it's I mean it's from a from a small, but dark, funny little store, it's it's remarkable.

Anyone in London, please go and visit Westfield. Portobello Road, brand new, used to be a tiny, little, small store, pokey.

It's still same physical size, but it's completely opened up, and it's only opened the last few days, and it's doing great. Significantly up on what our viability said, and you can't compare it to last year.

That's Portobello Road. Current business in Office, what can I say?

We've told you about the outlook. In constant currency, group retail sales actually grew by 1.5% in the first sorry, that's in first 7 weeks of this part of the year.

Truworths Africa up by 0.6%, margin up a bit more, Office UK up 3.4%. What's going to happen in the future?

I don't know, but is it exciting? It's fantastic.

We're very busy. Truworths Africa, I've already spoken, and Office UK, and thank you very much.

I'm now going to get into questions. Let me see, I'm going to refresh here, and then I'm going to get my colleagues to participate.

Oh, god, there's lots of questions. I'm the one is about the other income, but I think I've answered that.

What's the outlook for credit growth in the full year? I don't know, I can't tell you, because it reflects of what's the outlook for total growth, it's the same.

I I just tell you we're on a we're on a mission of accelerate. That means accelerate with common sense and within our business philosophy, so that of course includes credit and new products of credit.

What was internal inflation in Truworths Africa, what do you see for the full year? I've I we sort of have given you the answer to that.

Why space growth so strong, why is sales growth slowing so much? Sarah or Manny, you can come in here, but I think I've tried to answer that, because the new stores are doing well, but I mean you've got e-commerce and you've got the non-new stores.

When I say new, I mean not remodels, because a lot of the new actually means not like-for-like and it's the existing stores remodeled. Those are having a bit of a tougher time, that is true, and I think I've told you why.

Will it change for the better, in my opinion, in the next 12 months? Yes.

Is Office still going to be a success story? Yes.

Is it as easy? Maybe not, there are challenges in the UK economy, and as I told you, the top brands.

Sarah, you particularly very involved in Office, do you want to add anything to what I just said?

Michael, I don't think so. The exciting part is the fact that the MTO is doing better, and there's a shift a bit towards smarter product on the ladies' side, so that represents a new opportunity, but it's small in the scheme of things.

I think you've covered it well. Thank you.

Okay. Then

the share buybacks, Manny, there's a question about that. You want to answer that?

They're asking, are you going to do more share buybacks and what's the maximum authority you have? You or Riaan, either can answer if you want.

Michael, I can answer that. Share buybacks we have permission from the board to buy back shares up until a certain amount.

We don't disclose what that is, but we buy back shares, as you've mentioned, Michael, when it's opportunistic to do so. They might continue, we'll have to see how it goes, but we have got permission from the board to buy back more.

The GP margin in Truworths, is that because of rand strength? It's not, actually.

The GP margin slight improvement has got nothing whatsoever to do with the rand strength. Actually, if you look at it on the average like-for-like, there's not so much rand strength in the period, if you think about it, the massive rand strength now, but that's not the reason.

The reason is stock management and less markdown. That's the main reason.

Please speak to the stock turn deterioration, Truworths Africa. It's interesting post-results update shows sales growth acceleration, improved margins, seems to imply lower markdown post-Christmas.

Is that correct? Yes, it is correct, slightly lower, improved margins.

You mustn't think of stock turn and all that related to just post-half-year. It doesn't work like that.

It's how you manage the stock in-season, and then the consequence of if your sales were bad for the 6 months, because no one plans negative, and then, on top of it all, you didn't manage it as well as you'd like, then you do have higher markdowns in January, February, and in July, August. You try to avoid that even when you're not trading well by managing it in-season.

It's a whole process of managing stock and markdowns. The end consequence is not so much.

Harder in Office, because in Truworths it's our own product, our own fabric, our own everything, and in the UK, of course, it's brands and you order it 18 months ahead or something, long in advance. It is harder, but we've got disciplines and we apply them in Office as well.

How should we think about the focus on accelerate with discipline juxtaposed against prudence with the credit extension? Are you signaling intended acceleration in credit growth?

Yes, but sensibly. We like to say to you, what's the word we always say, Manny?

Optimism, we say Now, you're on silent.

Michael, we tend to say we're cautiously optimistic.

That's right. Now, what we're saying, we like to talk like this, we're cautiously optimistic.

We are. We're not lying.

We are cautiously optimistic, but we're now happy to say the word cautiously can be slightly smaller and less bold and the optimistic can be slightly bigger and more bold. That's genuinely how we feel.

I can't tell you anything more than that, because that's the truth. A lot of these questions are do I think credit growth is going to cause accelerate?

The answer is yes, but remembering, no customer in the world nowadays needs to shop at us because of credit. When you think about it, it's ridiculous.

They can get credit cards, buy now, pay later, lay-bys, cheap product from Temu and Shein in some of our competitors. Customers have unlimited choice and they're poorer.

You can't say, oh, we've got credit, they'll shop at us. It didn't work like that, maybe it did 20 years ago.

Now, you've got to have the merchandise that they want. Yes, we can offer credit and we will facilitate credit products and innovate in credit, we're very busy with that.

Yes, accelerate does mean that, but I can tell you, there's no question, the only real issue is to have the merchandise that the customer really wants. It's got to be that.

I'm not putting you under pressure, Sarah, because we're all involved in that, but I'm making the point, that's our role. We can't depend on credit, we use credit.

I'm trying to see here, this is quite a long one. Tailwinds, like-for-like in Office, mature store base.

No, it's not a mature store base in Office. In fact, there's a lot of dynamism in Office store base, because whenever I go to visit the UK, which is every 6 weeks or so, Sarah goes a lot, Manny goes sometimes, I spend my life traveling around the country.

It's amazing, the opportunities. Usually I don't know where I've been, because I go on trains everywhere, but it doesn't matter, because there're opportunities everywhere.

We find them and we look and we're very careful about cannibalization, what we spend and how much and where, but the truth is lots of opportunity for Office. It's a dynamic process.

True, the stores that we don't touch, because we haven't got to them yet or because they don't warrant it, they're too small, those are not doing nearly as well as the ones we've touched and the new ones. That is true.

How much of Truworths product is imported? Sarah, do you want to answer that quickly?

They want to know how much Truworths product is imported.

It's pretty consistent just under half, 45%. It does differ when you include areas like lingerie, which have a much higher component, but our preference is to always maintain a very strong local manufacturing contribution because of the flexibility and the speed that it brings in, and it links directly to our design center and our very strong local manufacturing base.

Thank you, Sarah. Then the next question is are the two, they're quite interesting.

One is about inventory planning for the year ahead. Are purchases reflecting growth in volume in nominal terms year for year in next 12 months?

Look, the truth is we never plan -3% or whatever Truworths did. That would be foolhardy.

We always plan significantly more aggressive than that. Yes, we plan more aggressive.

We plan for acceleration. Will we do it?

I don't know. Will we do close to it?

I hope. I don't know.

We try. I can tell you we'll manage it if we don't, and if we even get halfway, we'll be happy.

Yes, we plan volume growth. Will we do it?

I can't answer you. Then the store footprint in Office, have we reached our plateau?

Now is it not going to get better? No, let me think, we're now in February, I would say all the way through to November, there's accelerated growth in real estate, bearing in mind, I'm not saying new stores and extra space, more often than not, it's existing stores, but better trading space.

You can't compare. There are new stores as well.

There's a mixture of both and it's accelerating. Reon, this one wants to know, are the IFRS 16 gains expected to continue over second half and into financial year '27?

Do you want to give some daylight to that?

Yes, thank you, Michael. I think you answered the question earlier.

The IFRS 16 gains that we saw in Office this year we don't expect to continue. This part relates specifically to the DC that you mentioned that we acquired.

Obviously, in the ordinary course of business, there are IFRS 16 gains when we do lease terminations and modifications, that's just part of the business, but those are generally much smaller than what we've seen in this year. No, we don't expect this to have a continuing impact.

Then,

Reon, another one for you, because I think you might know the answer, because I don't. Could you please elaborate on the UK numbers?

Sales were 6% up, but space was 10%. Is this a weighted average space?

What was the like-for-like sales for period as well as post-December sales through? What is like-for-like?

Thank you, Michael. Firstly, we haven't disclosed the like-for-like sales, but just to answer the question on the space, no, the weighted average space, we've disclosed it on the slides, that was around 6.5% for the period.

Thank you. Then Manny, this is a good one for you, again.

I don't really agree with the premise of the question, but I can see their point. Why are the numbers of applications appear to come under pressure, because it used to be 5, 5.5, and now it's only 4.7 or something million?

By the way, you can do worse than having 4, 5 million customers applying to open accounts for you every 6 months or whatever. I think it's 2.5 million there.

It says current period has seen a drop. Does this relate to consumer resonance?

Is it a problem and what has changed relative to the past? Manny, I think you want to shed some light on that?

Michael, I can do that. It's really to do with better targeting of prospects that we think that would qualify for an account.

We're still having lots of demand. As one can see, 2.5 million applications roughly opened in the 6 months.

For the full year, it'll be close to 5 million, I would think, of which we open up about 18% of those. It's nothing to do with a lack of demand.

It's more to do with optimization of the campaigns and better targeting.

The next one is a question from someone who's on a mission for this permanently. Truworths board is absent digital and e-commerce retail experience, and to be frank, absent with fresh legs in the form of individuals with the latest retail and digital global developments in Truworths online, Is it adding such skills to the board in the form of additional non-exec constructive board appointments to contribute input towards future-proofing Truworths?

The premise of the question is ridiculous. It just shows a complete lack of understanding of the dynamics of an operating business.

Firstly, a management team that's dependent on the board to drive those things is not worth their salt. The board expects management to be able to do it.

Anyway, if you just look at the CVs and that of our non-executive directors, you could call it fresh legs, but you don't know them and they are incredibly dynamic and we've got nine new board members over the last couple of years. You couldn't be more tuned in to AI, technology, e-commerce.

The premise of the question is, and I happen to know this guy, and actually, your preoccupation with AI and your lack of understanding of it is one of the problems. We are into technology and we've got plenty fresh energy and legs in the board and there's continual re-energizing of the board directors.

Every year we appoint one or two new ones and, obviously, we look at current thinking and modern thinking and retail expertise and e-commerce. You have to look at expertise, and if you look at our value system, non-execs are appointed in the same way.

Can you share some detail Let me just see this one. As to what the new credit products are planning.

Manny, I don't know if you want to talk much about that, but they're asking, I keep on referring to the credit products. Clearly, there's a buy now, pay later thing happening, but they want to know what do you want to tell them?

It's actually an interesting question because we've been testing a credit product now for the last 2.5 years, which is showing promise. That has opportunity.

It's really been an invite-only credit product that we've used. There's an opportunity now to move that into the open market.

That is an opportunity. If we did that, of course, we'd do it in a very controlled fashion.

We've tested a number of other credit products recently, which are showing good promise. Again, we will do that in a controlled manner with using the champion challenger methodology.

Of late and recently, there's been quite a lot of progress with different credit products and so on. I think if it pans out, it's going to be quite an exciting way ahead in the next two or three years on credit.

The next one is They're quite interesting, these questions. Last year we said we're going to launch stand-alone stores for some of the high-end brands: Daniel Hechter, FUEL, Ginger Mary, Maschoff.

I think I've explained that. They're saying how many have we opened?

Look, we the there's You've got to think of the merchandise and the stores differently. The merchandise, we're on a mission right now.

This is the winter season when there's a lot of changes happening as we talk in all the brands, including ones you haven't mentioned. New stores, that's different.

There we've got we've got the first two big ones opening in the latter part of this year around or between August and November, because the big stores open in phases, and then there are a lot of stores that will follow that. Then there's already we're going to do some store within store work.

I can't tell you how many, but the the new store element of that is is going to still take time. The merchandise is we're busy with it already.

How has the average age of account credit customers changed over the 10 years? Is it correct to assume high-risk credit are younger younger people?

Obviously, that's true. It hasn't changed much over time, because, the people who are creditworthy tend to have proper jobs and more you know more not proper, but more sustainable job with regular income and, therefore, you have to be a bit older.

That's always been the case. We're filling in all the time with all these new customers who are younger and higher risk, but a big thing is how to deal with the new young customers who haven't got a lot of credit experience.

They're called thin files. We have to deal with that, and I think we're getting better at it.

I interestingly think it's an opportunity of ours, and that's what you can sort of start to see that that thing of where there's, as we've just said, Manny has spoken about it, less millions of customers applying because we're targeting, but a greater percentage of us opening, because that's a lot to do with that. I think I've answered all the rest of the questions.

There was one other where it went through here. Oh, yeah, there's something about 50%.

There we go. Is there a future where Truworths South Africa reduces exposure to credit sales perhaps from 70 down to 50 or below?

Again, I I need to explain it in in a simple way. You you could just as easily say to me, do I think that we could reduce credit cards from whatever it is now, 15% or whatever, I have no idea, down to 8?

I don't know, because we don't sit and judge the method you use to pay us. We offer everything.

We offer credit, our own in-house credit, especially for those who can't get or want it for whatever reason, and they can't get credit cards, or their debit cards haven't got enough money, we do. We're not We're not on a mission to change that, because why why should we?

It gives us a lot of strength. We have no problem with buy now, pay later and credit cards and debit cards.

In fact, we are motivating and encouraging with our own buy now, pay later product. We are universal about the payment measurement measurements.

If it dropped from 70 to 50, which is really Truworths is higher than Identity, if it ever dropped, it won't be because we've made a strategic decision to outsource it and let someone else run it for us or something. We don't need to.

We generate all the cash. We've got all the expertise.

It will be because customers have chosen a different means of dealing with us, and we're all fine. We're we're fine with that.

That is the essence of it. Look, I I've gone over the time.

It's 2:04, and I realize I haven't properly answered all the questions. My colleagues haven't had enough time to talk, and some of you are frustrated because I haven't answered it properly maybe.

There you see it says [email protected]. You can give us your questions and we will answer you as honestly as we can and as directly as we can.

You want to give us a go? Go for it.

We'll I can promise you we'll give it back to you as directly as you give it to us and as honestly and aboveboard and ethically. Please email us, and then when you are still dissatisfied after the email interaction, we for sure will see you.

There are conferences coming up very soon and we'll be at them. If you want to talk to us with pleasure, we are very open to it.

We will be as respectful to us as you are to We will be as respectful to you as you are to us. Thank you very much, and thanks for joining us, and we look forward to speaking to you all again in the not-too-distant future.