Wrap Text
The Foschini Group Limited’s results for the half-year ended 30 September 2013
The Foschini Group Limited unaudited interim condensed consolidated
results
Registration number: 1937/009504/06
Share codes: TFG-TFGP
ISIN codes: ZAE000148466 – ZAE000148516
The following are The Foschini Group Limited’s results for the
half-year ended 30 September 2013.
This report has not been audited or reviewed by the company’s
auditors.
SALIENT FEATURES
- Retail turnover up 9,0% to R6,7 billion
- Diluted headline earnings per share up 3,8% to 411,2 cents
- Interim dividend increased by 3,0% to 243,0 cents per share
- Sustained strong financial position
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Sept 2013 Sept 2012 March 2013
Unaudited Unaudited Audited
Rm Rm Rm
ASSETS
Non-current assets
Property, plant and
equipment 1 632,6 1 457,3 1 548,4
Goodwill and intangible
assets 120,2 118,6 120,3
RCS Group card receivables 376,5 534,2 856,4
RCS Group loan receivables 667,6 632,6 643,7
Participation in export
partnerships 26,1 38,3 30,0
Deferred taxation asset 311,7 265,9 304,7
---------- ---------- ----------
3 134,7 3 046,9 3 503,5
---------- ---------- ----------
Current assets
Inventory (note 10) 2 635,2 2 178,1 2 444,0
Trade receivables – retail 5 502,0 4 809,3 5 207,7
RCS Group card receivables 3 046,7 2 136,6 2 250,0
RCS Group loan receivables 375,5 477,3 460,6
Other receivables and
653,6 452,4 594,3
prepayments
Participation in export
partnerships 14,3 17,7 18,4
Cash 1 165,0 875,4 908,1
---------- ---------- ----------
13 392,3 10 946,8 11 883,1
---------- ---------- ----------
Total assets 16 527,0 13 993,7 15 386,6
========== ========== ==========
EQUITY AND LIABILITIES
Equity attributable to
equity holders of The
Foschini Group Limited 6 959,3 6 483,5 7 043,8
Non-controlling interest 784,2 630,4 705,5
-------- -------- --------
Total equity 7 743,5 7 113,9 7 749,3
-------- -------- --------
Non-current liabilities
Interest-bearing debt 1 377,8 719,7 1 041,9
RCS Group external funding 2 261,8 1 750,0 1 651,1
Non-controlling interest
- 51,8 -
loans
Operating lease liability 190,8 168,5 187,5
Deferred taxation liability 71,8 89,1 65,6
Post-retirement defined
104,5 97,9 104,5
benefit plan
---------- ---------- ----------
4 006,7 2 877,0 3 050,6
---------- ---------- ----------
Current liabilities
Interest-bearing debt 1 378,7 1 175,0 896,5
RCS Group external funding 1 014,3 798,2 1 298,0
Trade and other payables 2 312,3 1 978,8 2 282,5
Operating lease liability 21,9 18,5 9,0
Taxation payable 49,6 32,3 100,7
---------- ---------- ----------
4 776,8 4 002,8 4 586,7
---------- ---------- ----------
Total liabilities 8 783,5 6 879,8 7 637,3
---------- ---------- ----------
Total equity and liabilities 16 527,0 13 993,7 15 386,6
========== ========== ==========
CONDENSED CONSOLIDATED
INCOME STATEMENT
6 months 6 months Year ended
ended 30 ended 30 31 March
Sept 2013 Sept 2012 2013
Unaudited Unaudited % Audited
Rm Rm change Rm
Revenue (note 5) 8 591,6 7 749,9 16 285,0
======= ======= =======
Retail turnover 6 660,9 6 112,2 9,0 12 896,4
Cost of turnover
(note 6) (3 882,9) (3 553,7) (7 492,3)
------- ------- -------
Gross profit 2 778,0 2 558,5 5 404,1
Interest income
(note 7) 1 089,7 966,4 1 996,6
Other revenue (note
8) 841,0 671,3 1 392,0
Trading expenses (3 211,4) (2 782,1) (5 751,1)
(note 9)
--------- --------- ---------
Operating profit
before finance
charges 1 497,3 1 414,1 3 041,6
Finance costs (192,5) (156,0) (327,9)
--------- --------- ------ ---------
Profit before tax 1 304,8 1 258,1 2 713,7
Income tax expense (381,1) (364,1) (787,1)
--------- --------- ------ ---------
Profit for the
period 923,7 894,0 3,3 1 926,6
========= ========= =========
Attributable to:
Equity holders of
The Foschini Group
Limited 856,8 834,7 2,7 1 792,0
Non-controlling
interest 66,9 59,3 134,6
--------- --------- ---------
Profit for the
period 923,7 894,0 1 926,6
========= ========= =========
EARNINGS PER
ORDINARY SHARE
(CENTS)
Basic 412,1 400,1 3,0 856,4
Headline 413,0 400,5 3,1 858,6
Diluted (basic) 410,3 395,8 3,7 849,1
Diluted (headline) 411,2 396,1 3,8 851,3
Weighted average
ordinary shares in
issue (millions) 207,9 208,6 (0,3) 209,2
SUPPLEMENTARY INFORMATION
Sept 2013 Sept 2012 March 2013
Unaudited Unaudited Audited
Net ordinary shares in issue
(millions) 206,2 209,6 210,1
Weighted average ordinary
shares in issue (millions) 207,9 208,6 209,2
Tangible net asset value per
ordinary share (cents) 3 317,4 3 036,7 3 295,0
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
6 months 6 months Year ended
ended 30 ended 30 31 March
Sept 2013 Sept 2012 2013
Unaudited Unaudited % Audited
Rm Rm change Rm
Profit for the
period 923,7 894,0 1 926,6
---------- ---------- ----------
OTHER COMPREHENSIVE
INCOME
Items that are or
may be reclassified
subsequently to
profit and loss
Movement in
effective portion of
changes in fair
value of cash flow
hedges 64,7 (4,6) 9,7
Foreign currency
translation reserve
movements 5,7 7,7 9,4
Movement in
insurance cell
reserves - 0,1 -
---------- ---------- ----------
Other comprehensive
income for the
period before tax 70,4 3,2 19,1
Deferred tax on
movement in
effective portion of
changes in fair
value of cash flow
hedges (19,4) 1,3 (2,7)
---------- ---------- ----------
Other comprehensive
income for the
period, net of tax 51,0 4,5 16,4
---------- ---------- ----------
Total comprehensive
income for the
period 974,7 898,5 1 943,0
========== ========== ==========
Attributable to:
Equity holders of
The Foschini Group
Limited 896,0 839,2 6,8 1 808,4
Non-controlling
interest 78,7 59,3 134,6
---------- ---------- ----------
Total comprehensive
income for the
period 974,7 898,5 1 943,0
========== ========== ==========
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Equity
holders of
The
Foschini Non-
Group controlling Total
Limited interest equity
Rm Rm Rm
Equity at 31 March 2012 6 293,1 571,1 6 864,2
Profit for the period 834,7 59,3 894,0
Other comprehensive income
Movement in effective portion
of changes in fair value of
cash flow hedges (4,6) - (4,6)
Foreign currency translation
reserve movements 7,7 - 7,7
Movement in insurance cell
reserves 0,1 - 0,1
Deferred tax on movement in
effective portion of changes
in fair value of cash flow
hedges 1,3 - 1,3
---------- ---------- ----------
Total comprehensive income
for the period 839,2 59,3 898,5
Contributions by and
distributions to owners
Share-based payments reserve
movements 30,4 - 30,4
Dividends paid (558,9) - (558,9)
Shares purchased in terms of
share incentive schemes (145,5) - (145,5)
Proceeds on delivery of
shares by share trust 1,2 - 1,2
Current tax on shares
purchased 8,0 - 8,0
Deferred tax on shares
purchased 16,0 - 16,0
---------- ---------- ----------
Equity at 30 September 2012 6 483,5 630,4 7 113,9
Profit for the period 957,3 75,3 1 032,6
Other comprehensive income
Movement in effective portion
of changes in fair value of
cash flow hedges 14,3 - 14,3
Foreign currency translation
reserve movements 1,7 - 1,7
Movement in insurance cell
reserves (0,1) - (0,1)
Deferred tax on movement in
effective portion of changes
in fair value of cash flow
hedges (4,0) - (4,0)
---------- ---------- ----------
Total comprehensive income
for the period 969,2 75,3 1 044,5
Contributions by and
distributions to owners
Share-based payments reserve
movements 35,4 - 35,4
Dividends paid (498,5) - (498,5)
Acquisition of non-
controlling interest without
change in control (1,7) (0,2) (1,9)
Cancellation of issued shares (0,2) - (0,2)
Repurchase of shares (129,3) - (129,3)
Proceeds on delivery of
shares by share trust 185,4 - 185,4
---------- ---------- ----------
Equity at 31 March 2013 7 043,8 705,5 7 749,3
Profit for the period 856,8 66,9 923,7
Other comprehensive income
Movement in effective portion
of changes in fair value of
cash flow hedges 47,5 17,2 64,7
Foreign currency translation
reserve movements 5,7 - 5,7
Deferred tax on movement in
effective portion of changes
in fair value of cash flow
hedges (14,0) (5,4) (19,4)
---------- ---------- ----------
Total comprehensive income
for the period 896,0 78,7 974,7
Contributions by and
distributions to owners
Share-based payments reserve
movements 43,8 - 43,8
Dividends paid (566,0) - (566,0)
Cancellation of issued
shares* - - -
Repurchase of shares (350,5) - (350,5)
Shares purchased in terms of
share incentive schemes (127,5) - (127,5)
Current tax on shares
purchased 6,5 - 6,5
Deferred tax on shares
purchased 13,2 - 13,2
---------- ---------- ----------
Equity at 30 September 2013 6 959,3 784,2 7 743,5
========== ========== ==========
* zero as a result of rounding
6 months 6 months Year ended
ended 30 ended 30 31 March
Sept 2013 Sept 2012 2013
Unaudited Unaudited Audited
DIVIDEND PER ORDINARY SHARE
(CENTS)
Interim 243,0 236,0 236,0
Final - - 270,0
------ ------ ------
Total 243,0 236,0 506,0
------ ------ ------
Dividend cover 1,7 1,7 1,7
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
6 months 6 months Year ended
ended 30 ended 30 31 March
Sept 2013 Sept 2012 2013
Unaudited Unaudited Audited
Rm Rm Rm
Cash flows from operating
activities
Operating profit before
working capital changes (note
11) 1 733,1 1 615,8 3 466,9
Increase in working capital (705,8) (666,9) (1 586,8)
---------- ---------- ----------
Cash generated by operations 1 027,3 948,9 1 880,1
Interest income 13,7 10,4 22,7
Finance costs (192,5) (156,0) (327,9)
Taxation paid (432,7) (386,8) (808,4)
Dividends paid (566,0) (558,9) (1 057,4)
---------- ---------- ----------
Net cash outflows from
operating activities (150,2) (142,4) (290,9)
---------- ---------- ----------
Cash flows from investing
activities
Purchase of property, plant
and equipment (271,4) (300,7) (580,7)
Purchase of goodwill and
intangible assets - (1,7) -
Acquisition of assets through
business combinations (note
15) - (15,9) (19,4)
Proceeds from sale of
property, plant and equipment 3,4 2,1 8,4
Repayment of participation in
export partnerships 8,0 10,4 18,0
---------- ---------- ----------
Net cash outflows from
investing activities (260,0) (305,8) (573,7)
---------- ---------- ----------
Cash flows from financing
activities
Proceeds on delivery of
shares by share trust - 1,2 186,6
Repurchase of shares (350,5) - (129,3)
Shares purchased in terms of
share incentive schemes (127,5) (145,5) (145,5)
Decrease in non-controlling
interest loans - (190,6) (242,4)
Increase in RCS Group
external funding 327,0 781,8 1 182,7
Increase in interest-bearing 818,1 165,8 209,6
debt
---------- ---------- ----------
Net cash inflows from
financing activities 667,1 612,7 1 061,7
---------- ---------- ----------
Net increase in cash during
the period 256,9 164,5 197,1
Cash at the beginning of the
period 908,1 710,9 710,9
Effect of exchange rate
fluctuations on cash held - - 0,1
---------- ---------- ----------
Cash at the end of the period 1 165,0 875,4 908,1
========== ========== ==========
NOTES
These results were prepared by the TFG Finance and Advisory
department of The Foschini Group Limited acting under supervision
of Ronnie Stein CA (SA), CFO of The Foschini Group Limited.
1. The unaudited interim condensed consolidated results for the
half-year ended 30 September 2013 have been prepared in accordance
with the group’s accounting policies, which comply with
International Financial Reporting Standards (IFRS), IAS 34 Interim
Financial Reporting, Financial Reporting Guides as issued by the
Accounting Practice Committee of the South African Institute of
Chartered Accountants (formally the AC 500 series) and disclosures
required by the Companies Act No. 71 of 2008 and the JSE Listing
Requirements, and, except as mentioned in note 2, have been
consistently applied with those in the prior year.
2. During the period, the group adopted the following revised
accounting standards:
IFRS 7 Financial Instruments: Disclosure (offsetting financial
assets and financial liabilities)
IFRS 10 Consolidated Financial Statements
IFRS 11 Joint arrangements
IFRS 12 Disclosure of Interest in Other Entities
IFRS 13 Fair Value Measurement
IAS 1 Presentation of Financial Statements
IAS 19 Employee Benefits: Defined benefit plans
Revised IAS 28 (2011) Investments in Associates and Joint Ventures
The adoption of these standards had no material impact on these
interim financial statements.
3. These financial statements incorporate the financial statements
of the company, all its subsidiaries and all entities over which it
has operational and financial control.
4. Included in share capital are 12,0 (Sept 2012: 24,0) million
shares which are owned by a subsidiary of the company; 2,1 (Sept
2012: 1,5) million shares held by employees of TFG in terms of
share incentive schemes; 3,9 (Sept 2012: 5,4) million shares which
are owned by the share incentive trust and 0,9 (Sept 2012: nil)
million shares which are held by TFG Limited. These have been
eliminated on consolidation.
6 months 6 months Year ended
ended 30 ended 30 31 March
Sept 2013 Sept 2012 2013
Unaudited Unaudited Audited
Rm Rm Rm
5. REVENUE
Retail turnover 6 660,9 6 112,2 12 896,4
Interest income (refer note
7) 1 089,7 966,4 1 996,6
Other revenue (refer note 8) 841,0 671,3 1 392,0
------- ------- -------
8 591,6 7 749,9 16 285,0
------- ------- -------
6. COST OF TURNOVER
Cost of goods sold (3 584,0) (3 261,8) (6 824,0)
Cost of purchase, conversion
and other costs (298,9) (291,9) (668,3)
--------- --------- ---------
(3 882,9) (3 553,7) (7 492,3)
--------- --------- ---------
7. INTEREST INCOME
Trade receivables – retail 540,4 478,1 983,6
Receivables - RCS Group 535,6 477,9 990,3
Sundry 13,7 10,4 22,7
------- ------- -------
1 089,7 966,4 1 996,6
------- ------- -------
8. OTHER REVENUE
Merchants’ commission 32,1 21,3 48,2
Club income 185,5 168,4 336,2
Customer charges income 316,2 229,4 502,8
Insurance income 265,1 216,3 431,5
Cellular income – one2one
airtime product 39,3 33,4 67,4
Sundry income 2,8 2,5 5,9
------- ------- -------
841,0 671,3 1 392,0
------- ------- -------
9. TRADING EXPENSES
Depreciation (181,3) (157,6) (334,8)
Amortisation (0,1) (0,1) (0,2)
Employee costs: normal (1 022,4) (963,9) (2 002,2)
Employee costs: share-based
payments (43,8) (30,4) (65,8)
Occupancy costs: normal (652,0) (575,9) (1 205,3)
Occupancy costs: operating
lease liability adjustment (16,1) (15,2) (24,7)
Net bad debt (607,7) (443,5) (940,7)
Other operating costs (688,0) (595,5) (1 177,4)
---------- ---------- ----------
(3 211,4) (2 782,1) (5 751,1)
---------- ---------- ----------
10. INVENTORY
Merchandise 2 459,6 2 006,5 2 266,6
Raw materials 131,9 125,5 136,8
Shopfitting stock 36,6 44,4 37,2
Consumables 7,1 1,7 3,4
---------- ---------- ----------
2 635,2 2 178,1 2 444,0
========== ========== ==========
Inventory write-downs
included above 56,3 50,7 110,8
---------- ---------- ----------
11. OPERATING PROFIT BEFORE
WORKING CAPITAL CHANGES
Profit before tax 1 304,8 1 258,1 2 713,7
Finance costs 192,5 156,0 327,9
---------- ---------- ----------
Operating profit before
finance charges 1 497,3 1 414,1 3 041,6
Interest income – sundry (13,7) (10,4) (22,7)
Non-cash items
Depreciation 181,3 157,6 334,8
Amortisation 0,1 0,1 0,2
Operating lease liability
adjustment 16,1 15,2 24,7
Share-based payments 43,8 30,4 65,8
Post-retirement defined
benefit medical aid plan
movement - - 6,6
Foreign currency translation
reserve movement 5,7 7,7 9,4
Loss on disposal of property,
plant and equipment 2,5 1,2 6,7
Profit on disposal of
property, plant and equipment - (0,1) (0,2)
---------- ---------- ----------
Operating profit before
working capital changes 1 733,1 1 615,8 3 466,9
---------- ---------- ----------
12. Reconciliation of profit for the period to headline earnings
Profit for the period
attributable to equity
holders of The Foschini Group
Limited 856,8 834,7 1 792,0
Adjusted for the after-tax
effect of:
Profit on disposal of
property, plant and equipment - (0,1) (0,1)
Loss on disposal of property,
plant and equipment 1,8 0,8 4,7
---------- ---------- ----------
Headline earnings 858,6 835,4 1 796,6
---------- ---------- ----------
13. Contingent liabilities
The Foschini group has provided RCS Group with a total facility of
R835,3 million (Sept 2012: 835,3 million) in respect of their
domestic medium-term notes (DMTN) programme. As at 30 September
2013, the utilised portion of this facility was Rnil (Sept 2012:
Rnil). The unused liquidity facility at this date was R835,3
million (Sept 2012: R835,3 million), which constitutes a contingent
liability.
14. Related parties
Related party transactions similar to those disclosed in the
group's annual financial statements for the year ended 31 March
2013 took place during the period.
15. Business combinations
Prior year acquisitions
G-Star
With effect from 1 April 2012, as a consequence of the group's
acquisition of Fabiani, the group acquired two G-Star franchise
stores in South Africa. These stores are managed together with the
Fabiani stores.
The fair value of assets acquired and liabilities assumed through
the business combination was R8,7 million. A trademark of R10,7
million was recognised on the acquisition and the total cash
outflow as a result of the business combination was R19,4 million
(Sept 2012: 15,9 million).
16. Repurchase of shares
At the annual general meetings of the company held on 3 September
2012 and 2 September 2013, shareholders approved, by way of a
general authority, that the company may acquire its own shares from
time to time, subject to the memorandum of incorporation of the
company, the provisions of the Companies Act and the Listings
Requirements as presently constituted.
During the period, 3 160 230 ordinary shares were acquired at an
average price of R110,53 per share, where after 3 335 401 of the
shares were cancelled and restored to authorised share capital. On
30 July 2013 these 3 335 401 shares were delisted reducing the
total shares in issue from 228 498 241 shares to 225 162 840
shares.
Details of further repurchase transactions during the closed period
in terms of the repurchase programme as announced on SENS is as
follows:
Number of Average
shares price
R
October 2013 2 225 581 112,35
========== ==========
GROUP SEGMENTAL ANALYSIS
Central
Retail TFG and
trading Financial shared Total
divisions Services services retail RCS Group
6 months ended
Unaudited Unaudited Unaudited Unaudited Unaudited
30 Sept 2013
Rm Rm Rm Rm Rm
External
6 660,9 499,5 42,1 7 202,5 299,4
revenue
External
interest
- 540,4 7,8 548,2 541,5
income
--------- --------- --------- --------- ---------
Total
6 660,9 1 039,9 49,9 7 750,7 840,9
revenue*
--------- --------- --------- --------- ---------
Inter-segment
25,9 25,9 4,3
revenue
External
(66,3) (66,3) (126,2)
finance costs
Depreciation
and
(173,2) (173,2) (8,2)
amortisation
Segmental
profit before
1 452,3 202,6 (497,3) 1 157,6 207,2
tax
Other material
non-cash items
Foreign
exchange
(0,1) -
transactions
Share-based
(43,8) -
payments
Operating
(16,1) -
lease
liability
adjustment
------- -------
Group profit
1 097,6 207,2
before tax
------- -------
Capital
256,2 15,2
expenditure
11 099,8 5 427,2
Segment assets
Segment
5 047,9 3 735,6
liabilities
Central
Retail TFG and
trading Financial shared Total
divisions Services services Retail RCS Group
6 months ended
Unaudited Unaudited Unaudited Unaudited Unaudited
30 Sept 2012
Rm Rm Rm Rm Rm
External
6 112,2 385,6 35,8 6 533,6 249,9
revenue
External
interest
- 478,1 6,8 484,9 481,5
income
--------- --------- --------- --------- ---------
Total
6 112,2 863,7 42,6 7 018,5 731,4
revenue*
--------- --------- --------- --------- ---------
Inter-segment
34,4 34,4 5,4
revenue
External
(50,7) (50,7) (105,3)
finance costs
Depreciation
and
(148,3) (148,3) (9,4)
amortisation
Segmental
profit before
1 308,1 214,5 (393,5) 1 129,1 185,6
tax
Other material
non-cash items
Foreign
exchange
(11,0) -
transactions
Share-based
(30,4) -
payments
Operating
lease
liability
(15,2) -
adjustment
------- -------
Group profit
1 072,5 185,6
before tax
------- -------
Capital
300,2 4,5
expenditure
9 652,9 4 340,8
Segment assets
Segment
3 875,3 3 004,5
liabilities
Central
Retail TFG and
trading Financial shared Total
divisions Services services Retail RCS Group
Year ended 31
Audited Audited Audited Audited Audited
March 2013
Rm Rm Rm Rm Rm
External
12 896,4 789,5 73,2 13 759,1 529,3
revenue
External
interest
- 983,6 14,3 997,9 998,7
income
--------- --------- --------- --------- ---------
Total
12 896,4 1 773,1 87,5 14 757,0 1 528,0
revenue*
--------- --------- --------- --------- ---------
Inter-segment
56,3 56,3 8,0
revenue
External
(108,4) (108,4) (219,5)
finance costs
Depreciation
and
(316,6) (316,6) (18,4)
amortisation
Segmental
profit before
2 810,1 424,8 (853,8) 2 381,1 414,8
tax
Other material
non-cash items
Foreign
exchange
8,3 -
transactions
Share-based
(65,8) -
payments
Operating
lease
liability
(24,7) -
adjustment
------- -------
Group profit
2 298,9 414,8
before tax
------- -------
Capital
567,6 17,1
expenditure
10 435,6 4 951,0
Segment assets
Segment
4 269,5 3 367,8
liabilities
Consolidated Consolidated Year ended
6 months 30 6 months 30 31 March
Sept 2013 Sept 2012 2013
Unaudited Unaudited Audited
Rm Rm Rm
External revenue 7 501,9 6 783,5 14 288,4
External interest income 1 089,7 966,4 1 996,6
-------- -------- --------
Total revenue* 8 591,6 7 749,9 16 285,0
-------- -------- --------
Inter-segment revenue 30,2 39,8 64,3
External finance costs (192,5) (156,0) (327,9)
Depreciation and
amortisation (181,4) (157,7) (335,0)
Segmental profit before
tax 1 364,8 1 314,7 2 795,9
Other material non-cash
items
Foreign exchange
(0,1) (11,0) 8,3
transactions
Share-based payments (43,8) (30,4) (65,8)
Operating lease liability
(16,1) (15,2) (24,7)
adjustment
-------- -------- --------
Group profit before tax 1 304,8 1 258,1 2 713,7
-------- -------- --------
Capital expenditure 271,4 304,7 584,7
Segment assets 16 527,0 13 993,7 15 386,6
Segment liabilities 8 783,5 6 879,8 7 637,3
-------- -------- --------
* includes retail turnover, interest income, dividend income and
other income.
COMMENTARY
GROUP OVERVIEW
The challenging trading conditions which became apparent in the
second half of last financial year, have continued into this
financial year. The unfavourable credit environment continues to
affect the consumer and credit turnover growth remains under
pressure.
Retail turnover increased by 9,0% to R6,7 billion whilst headline
earnings per share increased by 3,1% to 413,0 cents. Diluted
headline earnings per share increased by 3,8% to 411,2 cents.
The group’s gross margin in all categories remained the same as in
the previous period. The group’s operating margin was 22,5%, down
from 23,1% in the previous period.
The interim dividend has been increased by 3,0% to 243,0 cents per
share.
The group continued to grow trading space by opening a further 81
stores, 12 of which were outside South Africa. At the end of the
period the group was trading out of 2 050 stores with an increase
in trading area of 2,6% during the period. Full year trading space
growth is expected to be approximately 6%.
MERCHANDISE CATEGORIES
In the current difficult credit cycle, credit sales grew by 6,6%,
whilst cash sales have been strong with a growth of 12,7%.
Turnover growths in the various merchandise categories are as
follows:
% turnover growth % same store turnover growth
- Clothing 8,3% 2,7%
- Jewellery 5,0% 1,8%
- Cosmetics 11,1% 7,4%
- Homewares & furniture 14,1% 12,8%
- Cellphones 12,9% 7,2%
Same store turnover grew by 4% whilst product inflation averaged
approximately 6% for the period. Cash sales as a percentage of
total sales increased to 40% from 39% in the prior period.
FINANCIAL SERVICES
TFG Financial Services’ retail debtors’ book, which amounts to R5,5
billion, increased by 5,7% since year end. Bad debt as a
percentage of closing debtors’ book increased to 11,4% from 10,5%
at the year-end, within management’s expectations.
Enhanced credit risk measures have been put in place.
RCS GROUP
The group’s operationally independent consumer finance subsidiary
performed well during the period with net profit before tax
increasing by 11,6% to R207,2 million. Net bad debt as a
percentage of debtors’ book increased to 7,0% from 6,6% at the
year-end, which is satisfactory and indicates a prudent approach to
debtors’ management in a difficult credit environment. NPL (non-
performing loans) impairment cover is at 110,8%. The debtors’ book
of R4,5 billion increased by 6,1% since the year end. The largest
component of this business relates to its card receivables which
have grown by 10,2% to R3,4 billion. Unsecured loan receivables,
which have been conservatively granted, reduced by 5,5% to R1,1
billion and now represents 23% of the total receivables.
There is nothing further to report in relation to the August 2013
SENS announcement with regard to the unsolicited expression of
interest and the process is still ongoing.
AFRICA EXPANSION
The group currently trades out of 116 stores outside of South
Africa. These stores traded well during the period with turnover
growth of 25,0% and same store turnover growth of 15,2%. In the
next five years our expansion into the rest of Africa will
accelerate and we expect to be trading out of approximately 300
stores by 2018.
PROSPECTS
The difficult credit environment is unlikely to improve in the
second half of the year due to the high level of consumer
indebtedness and consequently, enhanced credit risk management
practices will continue to be implemented.
For the first five weeks of the second half, retail turnover has
continued at similar levels to the first half. Given the weaker
festive season performance last year, we expect a better second
half performance but, as always, it is heavily dependent on festive
season trading, which will largely determine the performance of the
group for this period.
We plan to open a further 92 stores in the second half.
PREFERENCE DIVIDEND ANNOUNCEMENT
Dividend no. 154 of 3,25% (6,5 cents per share) (gross) in respect
of the six months ending 31 March 2014 has been declared from
income reserves, payable on Monday, 24 March 2014 to holders of
6,5% preference shares recorded in the books of the company at the
close of business on Thursday, 20 March 2014.
The last day to trade (“cum” the dividend) in order to participate
in the dividend will be Thursday, 13 March 2014. The Foschini Group
Limited preference shares will commence trading “ex” the dividend
from the commencement of business on Friday, 14 March 2014 and the
record date, as indicated, will be Thursday, 20 March 2014.
Preference shareholders should take note that share certificates
may not be dematerialised or rematerialised during the period
Friday, 14 March 2014 to Thursday, 20 March 2014, both dates
inclusive.
In terms of section 11.17 of the JSE Listings Requirements, the
following additional information is disclosed:
1) Local dividend tax rate is 15%;
2) No STC credits were utilised in determining the net dividend;
3) The withholding tax, if applicable at the rate of 15%, will
result in a net cash dividend per share of 5,52500 cents
4) The issued preference share capital of The Foschini Group
Limited is 200 000 shares at 7 November 2013; and
5) The Foschini Group Limited’s tax reference number is
9925/133/71/3P
INTERIM ORDINARY DIVIDEND ANNOUNCEMENT
The directors have declared a gross interim ordinary dividend of
243,0 cents per ordinary share from income reserves, for the period
ended 30 September 2013, payable on Monday, 6 January 2014 to
ordinary shareholders recorded in the books of the company at the
close of business on Friday, 3 January 2014.
The last day to trade (“cum” the dividend) in order to participate
in the dividend will be Tuesday, 24 December 2013. The Foschini
Group Limited ordinary shares will commence trading “ex” the
dividend from the commencement of business on Friday, 27 December
2013 and the record date, as indicated, will be Friday, 3 January
2014.
Ordinary shareholders should take note that share certificates may
not be dematerialised or rematerialised during the period Friday,
27 December 2013 to Friday, 3 January 2014, both dates inclusive.
In terms of section 11.17 of the JSE Listings Requirements, the
following additional information is disclosed:
1) Local dividend tax rate is 15%;
2) No STC credits were utilised in determining the net dividend;
3) The withholding tax, if applicable at the rate of 15%, will
result in a net cash dividend per share of 206,55000 cents
4) The issued gross ordinary share capital of The Foschini Group
Limited is 225 162 840 shares at 7 November 2013; and
5) The Foschini Group Limited’s tax reference number is
9925/133/71/3P
-------------------------------------------------------------------
Signed on behalf of the Board
D M Nurek A D Murray
Chairman CEO
Cape Town
7 November 2013
Non-executive directors:
D M Nurek (Chairman), Prof F Abrahams, S E Abrahams, M Lewis, E
Oblowitz, N V Simamane, B L M Makgabo-Fiskerstrand
Executive directors:
A D Murray, R Stein, P S Meiring
Company secretary:
D Sheard
Registered office:
Stanley Lewis Centre, 340 Voortrekker Road, Parow East, 7500
Transfer secretaries:
Computershare Investor Services (Pty) Ltd, Ground Floor, 70
Marshall Street, Johannesburg, 2001
Sponsor:
UBS South Africa (Pty) Ltd
Visit our website at http://www.tfglimited.co.za/
Date: 07/11/2013 02:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
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