THE FOSCHINI GROUP LIMITED - Statement by the CEO

Statement by the CEO

THE FOSCHINI GROUP LTD
Reg. No.: 1937/009504/06
Code : TFG - TFGP
ISIN : ZAE000148466 – ZAE000148516


STATEMENT BY THE CEO


At TFG’s 77th Annual General Meeting held today, CEO Doug Murray
updated the meeting as follows:


RESULTS FOR 2014
The group produced a solid result for the year in a difficult
trading environment characterised by the extremely challenging
credit market.


Enhanced credit risk management practices constrained credit
turnover growth to 5,7%. Cash sales were however buoyant growing
by 15,9%. Total retail turnover increased by 9,8% to R14,2 billion
whilst diluted headline earnings per share increased by 6,0% to
902,7 cents per share. Our final dividend increased by 8,5% to
293,0 cents with a total dividend for the year of 536,0 cents per
share – an increase of 5,9%.


PROSPECTS FOR THE 2015 FINANCIAL YEAR
I would now like to comment briefly on the group’s prospects for
2015.
•    We expect trading conditions in  the  credit side of our
     business to remain challenging, while we anticipate that we
     will continue to benefit from strong cash sales growth.
•    In line with our strategy of investing for long term growth we
     will continue to open new stores and we anticipate increasing
     trading space by approximately 7% in the current year.
•    Trading for the first five months of this financial year
     reflect total sales growth of 10,3% over the previous period
     with same store sales growth of 4,9%. Credit sales which have
     been constrained by our enhanced credit risk measures grew by
     2.8%, whilst cash sales have been buoyant growing by 21.0%.
•   In the current credit environment, our retail debtors’ book is
    performing within management expectations and some signs of
    improvement have become evident.
•   As was advised on SENS on 6 August 2014, the transaction in
    relation to our 55% holding in RCS has been completed with a
    closing date of 6 August 2014. Our share of the net proceeds
    is approximately  R1,45   billion. The  board continues  to
    evaluate alternatives regarding the use of the net proceeds.
•   Notwithstanding the current environment, we believe the group
    is well positioned to deliver a satisfactory result for this
     year, remembering that the second half of the year is heavily
     dependent on Christmas trading, which will largely determine
     the performance of the group in the second half.


ACKNOWLEDGMENTS
Once more on behalf of my fellow board members and myself I thank
all our dedicated staff for their hard work and continued excellent
performance during the year.


Cape Town
1 September 2014


SPONSOR:
UBS South Africa (Pty) Ltd

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