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STATEMENT BY THE CEO AT THE ANNUAL GENERAL MEETING
THE FOSCHINI GROUP LTD
Reg. No.: 1937/009504/06
Share code : TFG - TFGP
ISIN : ZAE000148466 – ZAE000148516
(“TFG”)
STATEMENT BY THE CEO AT THE ANNUAL GENERAL MEETING
At TFG’s 80th Annual General Meeting held today, CEO Doug
Murray updated the meeting as follows:
RESULTS FOR 2017
Against a backdrop of challenging trading circumstances and
political and economic uncertainty across all the territories
in which we trade, the Group produced a satisfactory result
for the year. Our strategy to diversify our Group in terms of
cash and credit turnover, trading in different commodity types
and expanding in different geographies, has clearly supported
this year’s result on the back of several years of good
turnover and earnings growth.
Retail turnover for the year was R23,5 billion, a growth of
11,6%, with comparable turnover growth of 5,7%. Cash turnover
growth for the Group was 18,5%. Retail turnover growth in TFG
Africa was 8,0%, with cash turnover growth of 14,1%. Credit
turnover however continued to be impacted by the reduction in
new account openings as a result of the Affordability
Regulations and grew by only 2,3%.
Headline earnings grew by 10,1% for the year. Excluding the
acquisition costs incurred in the prior year in relation to
Whistles, headline earnings grew by 6,8%. Headline earnings
per share, excluding the acquisition costs, increased to
1 099,2 cents per share from 1 055,8 cents per share, a growth
of 4,1%.
A final cash dividend of 400,0 cents per share was declared,
representing an increase of 3,9%. Accordingly, the total
dividend for the year amounted to 720,0 cents per share, an
increase of 4,2%.
PROSPECTS FOR THE 2018 FINANCIAL YEAR
I would now like to comment briefly on the group’s prospects
for 2018.
- The challenging trading circumstances and the political and
economic uncertainty experienced during our 2017 financial
year across most of the territories in which we trade,
continued into the 2018 financial year.
- Despite the economic outlook, we believe that our continued
commitment to our strategic objectives around Customer,
Leadership, Profit and Growth, together with the continued
diversification of our Group, will support our future success.
- We anticipate increasing trading space by approximately 5%
in TFG Africa in the current year. In line with our focus on
capital optimisation, we will however continue to deal
aggressively with underperforming stores. In addition, we
plan to open in excess of 110 TFG International outlets. Our
investment in the UK and Australian markets strengthens our
diversified portfolio of brands and provides a solid platform
for further growth opportunities in these markets.
- Our e-commerce roll-out continues with @homelivingspace that
launched during April 2017 and Exact launching during the
second half of the year. This will bring our total number of
brands trading online to 17.
- Total turnover growth for the first five months of this
financial year is 6,2%, which we are extremely pleased with,
coming on top of a very high base in the corresponding period
of 17,2% turnover growth. Cash turnover growth was 6,0% and
credit turnover growth was 6,4%. As expected, credit turnover
growth was stronger with the negative impact of the
Affordability Regulations now in our base.
- Turnover growth in TFG Africa for the five months is 5,1%
with comparable turnover growth of 1,4%.
- Turnover growth in TFG International for the same period is
9,6%. Excluding the recently acquired G-Star Australia stores
as well as the Retail Apparel Group, turnover growth is 5,2%.
- As announced on SENS on 14 July, all conditions precedent in
respect of the RAG acquisition were fulfilled with an
effective date of 24 July. Thus far RAG is trading above
management’s expectation and integration into the Group is
well advanced.
- Growth in our retail debtors’ book is in line with
management’s expectation.
- We expect the current difficult trading conditions across
most territories to continue. As always, however, 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.
Shareholders are advised that the financial information
relating to the prospects for the 2018 financial year has not
been audited, reviewed or reported on by the Group’s auditors.
Cape Town
6 September 2017
Sponsor:
UBS South Africa Proprietary Limited
Date: 06/09/2017 12:20:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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