THE FOSCHINI GROUP LIMITED - Statement by CEO at the Annual General Meeting

Statement by CEO at the Annual General Meeting

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


STATEMENT BY THE CEO
At TFG’s 76th Annual General Meeting held today, CEO Doug Murray updated the
meeting as follows:


RESULTS FOR 2013
Despite the current difficult consumer environment the group achieved a solid
performance, producing its highest ever profits with continued gains in market share.
After a good first half performance the second half became more challenging. Particularly
hard hit were the discretionary categories of jewellery and cellphones which had a weak
festive season. Notwithstanding the strong comparative base, retail turnover increased by
10,9% to R12,9 billion whilst headline earnings per share increased by 11,2% to 858,6
cents per share. Our total dividend for the year increased by 11,2% to 506,0 cents per
share.


PROSPECTS FOR THE 2014 FINANCIAL YEAR
I would now like to comment briefly on the group’s prospects for 2014.
   -     Economic conditions in South Africa will remain difficult in the year ahead with the
         credit environment likely to deteriorate further due to current levels of consumer
         indebtedness. Strict risk management practices will continue to be implemented.
   -     In line with our strategy of investing for long term growth we will continue to open
         new stores in certain of our formats and we anticipate increasing trading space by
         approximately 6% in the current year.
   -     Trading conditions for the first five months of this financial year have remained
         challenging. Total sales have grown by 9,1% over the previous period with same
         stores sales growth of 4,1%. Sales for the 8 weeks since the beginning of July have
         shown a stronger trend with growth of 13%.
   -     In the current challenging credit environment, our retail debtors’ book is performing
         within management expectations.
   -     Our RCS subsidiary in which we have a 55% shareholding continues to perform
         satisfactorily. On 16th August we issued a voluntary SENS announcement advising
         that we have received an unsolicited expression of interest to acquire 100% of RCS
         which our board is considering. Further announcements will be made in this regard
         as and when appropriate.
   -     In light of the current difficult economic environment, which we expect will continue
         into next year, we believe the group is 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
2 September 2013


SPONSOR:
UBS South Africa (Pty) Ltd

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