Shares in Truworths slumped to a nine-year low on Friday morning after the fashion retailer reported a 74% slide in profits amid difficult trading environments in SA and the UK.

The group’s shares slipped 4.3% to R55.40 in early trade, the worst level since August 2010.

In its results for the year ended June 2019, released late on Thursday, Truworths said after-tax profits fell 74.1% to R691m, as compared with R2.66bn in 2018. Headline earnings per share were 8.5% lower from R6.12 in June 2018 to R5.60 in June 2019.

As Truworths warned in a trading statement two weeks ago, a continuously tough trading environment in the UK hit the profitability of its Office shoes chain there, resulting in a £97m (R1.79bn) impairment charge on the business. The group said trading profit decreased 80.5% to R492m as a result of this.

In SA, consumer spending was constrained by low economic growth, high unemployment, modest increases in negotiated wages and higher average fuel and utility prices, the group said.

“In the UK, Brexit uncertainty and muted consumer sentiment, combined with the pressure on store-based retailing as consumer spending shifts to online shopping, continue to negatively impact the economy and retail sector in particular.”

Truworths said it closed 24 stores in the period under review. Its share price is down 32.48% in 2019.

The group did, however, declare a final cash dividend of 135c per share, lower than the dividend of 159c per share in 2018.

While consumer spending in SA is expected to remain under pressure in the short term, the group said a stronger retail sales growth trend was promising. Retail sales were up 3.7% to reach R18.6bn.

Truworths said sales momentum is expected to be driven by the expanding e-commerce offering, the lay-by payment option and customer response to new store concepts.