TFG comments on current trading conditions
Lange Strategic Communications - Sep 2nd, 13:57
TFG (The Foschini Group) produced its highest ever profits in the past year and continued to gain market share, despite the difficult consumer environment, Doug Murray, CEO of TFG (The Foschini Group Limited), told the 76th Annual General Meeting in Parow today (September 2).
In the past year TFG increased its retail sales by 10,9% to R12,9 billion and headline earnings per share increased by 11,2% to 858,6 cents per share. Its total dividend was 506c a share, up by 11,2%.
He said trading conditions for the first five months of this financial year were challenging with total sales up by 9,1% over the previous period and same stores sales growth up by 4,1%.
However, sales strengthened in the past 8 weeks (since the beginning of July) with growth up by 13%.
Mr Murray said trading in the second half was heavily dependent on Christmas trading which would largely determine the performance of the group in the second half.
He said despite the challenging credit environment, the group’s retail debtors’ book was performing within management expectations.
The group planned to continue its strict risk management practices, given the high levels of consumer indebtedness and the general expectation that the current credit environment could deteriorate further.
The group planned to continue opening new stores in the current year, increasing its trading space by approximately 6% to over 2100 stores as part as part of its long term growth strategy. It also planned to double its Africa footprint from its current spread of 104 stores over the next 3 years.
Over the years TFG has successfully broadened its retail base from its mid-market positioning to include high-end consumer brands. It trades out 18 retail brands including @home, @homelivingspace, American Swiss, Sterns, Foschini, Markham, Fabiani, Charles and Keith, Totalsports, Exact, Donna-claire, DueSouth, Sportscene, G-Star and Fashion Express.
TFG has two financial services divisions, one which supplies credit to its group customers and the other, RCS in which TFG holds 55% with Standard Bank. RCS provides transactional finance, personal loans and private label cards to other retailers.
Last month the group issued a voluntary SENS announcement advising that it had received an unsolicited expression of interest to acquire 100% of RCS.
Mr Murray said the board was currently considering its options in this regard and further announcements would be made as and when appropriate.
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