Johannesburg — Rex Trueform Clothing Company more than doubled its headline earnings in the year to June, but took the prudent step of maintaining its dividend at the same level as last year to build up its cash reserves.

The group said the business had shown a major turnaround in the last six months of the financial year, largely owing to a solid performance by its retail clothing chain, Queenspark, as well as a significant rise in exports.

Queenspark's continued growth was attributed to its focus on high-quality clothing appealing to the higher end of the clothing market, rather than the opening of new stores, since the past year was one of consolidation.

During the 2001 financial year the group was hard hit by the loss of a major export customer in the UK, but it has subsequently identified the US as a promising export market and forged relationships with a number of important retail customers.

Group revenue rose by 18% to R331,3m for the year to June compared with the same period last year, on which operating profit jumped by almost 50% to R12,7m. Headline earnings grew to 23,7c (10,2c) a share.

The group's capital expenditure plans for next year came to only R6,5m. Any expansion of production capacity to meet increased demand is expected to be funded mainly from operational cash flow. Cash generated by the group's operations in the year to June rose to R12,6m from R8,4m previously, but mainly owing to increased working capital requirements, cash balances fell to R21,1m from R32,2m.