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THE FOSCHINI GROUP LIMITED - Unaudited interim condensed consolidated results for the half-year ended 30 September 2018

Release Date: 08/11/2018 13:30
Code(s): TFG TFGP
 
Wrap Text
Unaudited interim condensed consolidated results for the half-year ended 30 September 2018

The Foschini Group Limited
Registration number: 1937/009504/06
Share codes: TFG-TFGP
ISIN codes: ZAE000148466 – ZAE000148516

Unaudited interim condensed consolidated results for the half-year
ended 30 September 2018



The following are The Foschini Group Limited’s results for the half-
year ended 30 September 2018.

This report  has not been audited or reviewed by the company’s
auditors.


SALIENT FEATURES
• Group retail turnover up 28,6% to R15,9 billion
• Gross margin expansion to 53,6% (Sept 2017: 51,0%)
• Headline earnings growth of 14,3% to a record R1,2 billion
(excluding acquisition costs* +9,1%)
• Headline earnings per share up 8,3% to 506,0 cents
• Free cash flow generated equal to 85% of net profit for the
period
• Interim dividend declared of 330,0 cents per share




INTRODUCTION OF NEW ACCOUNTING STANDARDS - IFRS 9 AND IFRS 15

During the period, the Group adopted IFRS 9 ‘Financial Instruments’
and IFRS 15 ‘Revenue from Contracts with Customers’. The   Group
adopted IFRS 9 retrospectively and elected to reflect  it    as   an
opening adjustment on 1 April 2018 and not to restate its comparative
financial statements. IFRS 15 was adopted fully retrospectively by
the Group as at the start of the earliest period presented in these
unaudited interim condensed consolidated results (‘financial
results’).


Further information with regard to the impact of these changes in
accounting policies is provided in note 14 of these financial
results.
COMMENTARY


PERFORMANCE OVERVIEW
In all three of our major territories, South Africa, the United
Kingdom and Australia, trading   conditions remained  difficult and
constrained  during the first half of our financial year.
Notwithstanding, the Group delivered a strong result for the period
with good performance in each of the territories relative to our
respective peer groups.


Group retail turnover for the six-month period grew by 28,6% with
turnover growth of 8,4% (ZAR) for TFG Africa, 50,7% (GBP) for TFG
London and 170,7% (AUD) for TFG Australia.  Including comparable^
numbers for Hobbs (TFG London) and RAG  (TFG Australia) acquired
during the previous financial year, turnover grew by 2,3% and 14,9%
respectively for TFG London and TFG Australia. Pleasing comparable
store turnover growth of 4,8% was achieved for TFG Africa.


TFG London’s comprehensive omni-channel offering enabled online
turnover growth of 15% for this channel, in a market where trading
has shifted rapidly from high    street to online retail. With the
launch of online selling for two additional TFG Africa brands, Donna
and The FIX, online turnover through 22 of the Group’s 28 brands now
contributes 7,9% of Group turnover.


Group cash turnover growth of 39,9% was achieved for the period with
good growth of 9,8% (ZAR) for TFG Africa. In line with the Group’s
strategy, the cash versus credit turnover split is well diversified
at 72:28 with a split of 55:45 for TFG Africa. The adoption of the
IFRS 15 revenue accounting standard referred to above, resulted in a
c.4% shift in contribution from credit to cash turnover at a TFG
Africa level. Group credit turnover growth of 6,8% was driven by
growth in the active account base following the setting aside of the
Affordability Regulations with regard to the submission of proof of
income.


The   Group’s gross margin expanded to 53,6% compared to 51,0% at
September 2017. An encouraging increase from 46,6% to 47,6% was
achieved for TFG Africa, with improved gross margins across most
merchandise categories. TFG London’s gross margin was 63,0% (Sept
2017: 63,6%) and TFG Australia’s gross margin was 64,4% (Sept 2017:
63,9%).


Total headline earnings grew by 14,3% to R1,2 billion. Excluding the
acquisition costs incurred in the prior period relating to the Hobbs
and   RAG   acquisitions, headline earnings grew  by  9,1%. With the
additional 17,2 million shares issued in    the prior year, total
headline earnings per share grew by 8,3% to 506,0 cents per share.
Excluding the acquisition costs, headline earnings per share grew by
3,4%.


An interim dividend of 330,0 cents per share has been declared, an
increase of 1,5% on the previous comparable period.


In line with the continued focus on working capital management, the
Group   achieved free cash flow of R988 million for the period,
equivalent to 85% of net profit after tax. The debt-to-equity ratio
at September 2018 was stable at 63,9% (March 2018: 62,0%).


The Group’s outlets increased to 4 041 outlets in 32 countries as at
the end of September 2018. During the past six months, the following
movements occurred in the estate portfolio:


                                                       TFG             TFG
                 TFG Africa       TFG London
                                                     Australia         Consolidated
                Number of        Number of           Number of         Number of
                outlets           outlets            outlets           outlets
New outlets         22                68                22             112

Closed
                    26                73                6               105
outlets

Net movement        (4)               (5)               16               7



TFG Africa had gross new / enlarged space growth of 5,0% and, in line
with our focus   on capital optimisation, closures / reductions in
space of 2,2%, resulting in a net trading space increase for TFG
Africa of 2,8% compared to September 2017.


MERCHANDISE CATEGORIES
Turnover growth in the various merchandise categories was as follows:


                                                    % same                      %
                                              %      store          %   turnover
                                 %   turnover     turnover   turnover     growth
                          turnover     growth       growth     growth         (TFG
                            growth         (TFG       (TFG       (TFG   Australi
                           (Group)    Africa)      Africa)    London)          a)
                              ZAR*          ZAR        ZAR       GBP*         AUD*
Clothing                      36,1         11,2        7,2       50,7        170,7
Jewellery                      2,7          2,7        1,0
Cellphones                   (2,6)         (2,6)      (4,2)
Homeware & furniture           7,8          7,8        2,8
Cosmetics                      1,0          1,0          -
Total turnover                28,6          8,4        4,8       50,7        170,7


* Non-comparable due to inclusion of Hobbs (TFG London) and RAG (TFG
Australia)


Product price deflation in TFG Africa averaged approximately 5,5%.
CREDIT
The retail net debtors’ book of R7,1 billion grew by 2,7% year-on-
year (Sept 2017: 6,3%). Net bad debt increased by 10,8% (Sept 2017: -
4,3%). Bad debt write off growth at 10,4% (Sept 2017: +0,7%) was in
line with the gross debtors’ book growth of 9,1% (Sept 2017: +8,2%).
Net bad debt as a percentage of the debtors’ book at September 2017
was 9,8%, down from 10,6% at September 2017.


IFRS 9 was adopted retrospectively on 1 April 2018 with an adjustment
to   the   Group’s   opening   retained    earnings.   Comparative  financial
statements were not restated as permitted by IFRS 9. The initial
adjustment   to   the   allowance   for   impairment   of   R542,5   million   on
adoption of IFRS 9, resulted in a 39,1% increase in the provision, to
R1,9 billion. The adoption of IFRS 9 increased the allowance for
impairment as a % of the debtors’ book to 21,5% (Sept 2017: 16,7% per
IAS 39). A significant component of the increase in the allowance for
impairment on implementation is due to the consideration of macro-
economic and forward-looking information which was neither required
nor allowed under the previous accounting standard.


MANAGEMENT AND BOARD UPDATES
As previously announced on SENS (dated 12 March 2018, 24 May 2018, 1
August 2018 and 3 September 2018) the following Supervisory Board
changes occurred during the past six months:
• Doug Murray stepped down as the Group’s CEO on 3 September 2018 and
retired from the Group at the end of September 2018.   Doug has been
appointed by the Supervisory Board as a consultant to the end of
September 2019 and as a non-executive director from 1 October 2019.
• Anthony Thunstr?m, previously the Group’s CFO, assumed the position
of CEO on 3 September 2018.
• Bongiwe Ntuli has been appointed as the Group’s CFO and as an
executive director with effect from 14 January 2019.


It is with great sadness that the Board notes the passing of Martin
Mendelsohn, an Operating Board member of our Group.            Martin was with
the Group since 1982 and had a long and proud association with TFG.
He led major strategic initiatives and was integral in building many
of TFG’s retail brands as well as the development of the Group’s
local supply chain.       Martin will be greatly missed and all at TFG
extend their condolences to Martin’s family.


OUTLOOK
We expect trading conditions to remain challenging in all three of
our major territories as consumer spending and business confidence
remain under pressure.


The   Group’s    diversification   strategy    has    proven   its   success   in
supporting  the   resilience   of   the   Group    in   difficult    trading
conditions. This, together with the Group’s continued focus on cost
control and working capital optimisation, its strategic longer-term
investment in digital transformation and its continued commitment to
the Group’s strategic pillars of Customer, Leadership, Profit and
Growth, will underpin the Group’s performance in the second half.


The second half of the Group’s financial year, as always, remains
heavily dependent on Black Friday, Cyber Monday and Christmas trade.
The TFG London results will remain sensitive to the impact of the
ongoing department store reorganisation currently playing out in the
United Kingdom.


Retail trade performance for the first four weeks of our second half
is at similar levels to the first half across TFG Africa, TFG London
and TFG Australia.


PRO FORMA INFORMATION
Unaudited pro forma management account information for Hobbs and RAG
were used in this announcement for illustrative purposes only to
provide an indicative turnover growth for the TFG London and TFG
Australia business segments.  This pro forma information, because of
its nature, may not be a fair reflection of the Group’s results of
operation, financial position,  changes in  equity or cash flows.
There are no events subsequent to the reporting date which require
adjustment to the pro forma information.


The pro forma management account numbers used were:

                                            Sept-17           Sept-18
                                                 £m                £m               % change
 TFG London as previously
 disclosed                                    133,0             200,4                50,7%
 Hobbs (April 2017 – Sept
 2017)                                         63,0
 TFG London including Hobbs                   196,0             200,4                 2,3%

                                            Sept-17           Sept-18
                                               A$m               A$m              % change
 TFG Australia as previously
 disclosed                                    88,3              239,0               170,7%
 RAG (April 2017 – July
 2017)                                        119,7
 TFG Australia including RAG                  208,0             239,0                14,9%


The directors are responsible for compiling the unaudited pro forma
financial information in accordance with the JSE Limited Listings
Requirements and in compliance with the SAICA Guide on Pro Forma
Financial     Information. The  underlying  information used in the
preparation of the pro forma financial information has been prepared
using   the   accounting policies in place for the  period ended 30
September 2018.


PREFERENCE DIVIDEND ANNOUNCEMENT


Dividend no. 164 of 3,25% (6,5 cents per share) (gross) in respect of
the six months ending 31 March 2019 has been declared from income
reserves,     payable   on   Monday,   18   March  2019   to  holders  of  6,5%
preference shares recorded in the books of the company at the close
of business on Friday, 15 March 2019. The last day to trade (“cum”
the   dividend)   in  order  to   participate  in  the   dividend will be
Tuesday, 12 March 2019. The Foschini Group Limited preference shares
will commence trading “ex” the dividend from   the commencement of
business  on    Wednesday,  13   March  2019  and the  record  date,  as
indicated, will be Friday, 15 March 2019.


Preference shareholders should take note that share certificates may
not be dematerialised or rematerialised during the period Wednesday,
13 March 2019 to Friday, 15 March 2019, 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 20%;
      2) The withholding tax, if applicable at the rate of 20%, will
      result in a net cash dividend per share of 5,20000 cents;
      3) The issued preference share capital of The Foschini Group
      Limited is 200 000 shares at 8 November 2018; and
      4)  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
330,0 cents per ordinary share from income reserves, for the period
ended   30    September   2018,  payable  on  Monday,  7  January  2019  to
ordinary shareholders recorded in the books of the company at the
close of business on Friday, 4 January 2019. The last day to trade
(“cum” the dividend) in order to participate in the dividend will be
Monday, 31 December 2018. The Foschini Group Limited ordinary shares
will commence trading “ex” the dividend from    the commencement of
business  on    Wednesday,  2  January 2019  and the  record  date,    as
indicated, will be Friday, 4 January 2019.


Ordinary shareholders should take note that share certificates may
not be dematerialised or rematerialised during the period Wednesday,
2 January 2019 to Friday, 4 January 2019, 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 20%;
      2) The withholding tax, if applicable at the rate of 20%, will
      result in a net cash dividend per share of 264,00000 cents;
      3)     The   issued    ordinary    share      capital     of    The   Foschini   Group
      Limited is 236 756 814 shares at 8 November 2018; and
      4)    The   Foschini  Group  Limited’s    tax    reference number   is
      9925/133/71/3P.


Signed on behalf of the Board.


M Lewis             A E Thunstr?m
Chairman            CEO


Cape Town
8 November 2018


* Headline earnings excluding acquisition costs is defined in note 10
of the unaudited interim condensed consolidated results.
^ Unaudited pro forma numbers included in the prior period base to
calculate an indicative turnover growth.


CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION


                                                  Restated*    Restated*
                                          Sept         Sept       March
ASSETS                                    2018         2017       2018
                                     Unaudited   Unaudited     Audited
Non-current assets                          Rm          Rm         Rm
Property, plant and equipment          2 931,6     2 792,3     2 861,9
Goodwill and intangible assets         8 484,4     8 236,9    7 667,2
Deferred taxation asset                  891,4       729,3      663,6
                                      --------    --------    --------
                                      12 307,4    11 758,5    11 192,7
                                      --------    --------    --------
Current assets
Inventory (note 4)                     7 609,5     6 412,5     6 900,6
Trade receivables – retail             7 083,2     6 895,0     7 373,6
Other receivables and prepayments      1 082,2       838,8       821,8
Concession receivables                   184,7       267,9       296,8
Cash and cash equivalents              1 002,5       744,8     1 206,1
                                      --------    --------    --------
                                      16 962,1    15 159,0    16 598,9
                                      --------    --------    --------
Total assets                          29 269,5    26 917,5    27 791,6
                                      ========    ========    ========
EQUITY AND LIABILITIES
Equity attributable to equity
holders of The Foschini Group
Limited                               13 538,6    13 190,0    13 121,5
Non-controlling interest                     -         4,1         4,5
                                      --------    --------    --------
Total equity                          13 538,6    13 194,1    13 126,0
                                      --------    --------    --------
LIABILITIES
Non-current liabilities
Interest-bearing debt                  4 929,7     5 724,9     4 825,7
Put option liability                      80,8       113,2        72,7
Cash-settled share incentive
                                             -         7,3           -
scheme
Operating lease liability                373,8       323,8       335,1
Deferred taxation liability              923,0       915,5       829,4
Post-retirement defined benefit
plan                                     224,8       241,6       215,8
                                      --------    --------    --------
                                       6 532,1     7 326,3     6 278,7
                                      --------    --------    --------

Current liabilities
Interest-bearing debt                  4 728,0     2 821,6     4 524,9
Trade and other payables               4 376,2     3 497,3     3 724,3
Operating lease liability                 22,5        18,9        30,7
Taxation payable                          72,1        59,3       107,0
                                      --------    --------    --------
                                       9 198,8     6 397,1     8 386,9
                                      --------    --------    --------
Total liabilities                     15 730,9    13 723,4    14 665,6
                                      --------    --------    --------
Total equity and liabilities          29 269,5    26 917,5    27 791,6
                                      ========    ========    ========

* Refer to note 14 for the impact of the changes in accounting policies
CONDENSED CONSOLIDATED INCOME STATEMENT

                                                                Restated*
                                          Restated*                  Year
                             6 Months      6 Months              ended 31
                             ended 30      ended 30                 March
                            Sept 2018     Sept 2017        %         2018
                            Unaudited     Unaudited   change      Audited
                                   Rm            Rm                    Rm

Revenue (note 5)             17 466,7      13 880,6             31 463,0
                             ========      ========             ========
Retail turnover              15 913,1      12 377,5     28,6     28 519,5
Cost of turnover            (7 386,5)     (6 065,4)                   (13
                                                                   557,5)
                             --------      --------              --------
Gross profit                  8 526,6       6 312,1              14 962,0
Interest income (note           878,4         883,2               1 755,8
6)
Other income (note 7)           675,2         619,9               1 187,7
Trading expenses (note      (8 165,5)     (6 029,7)
8)                                                              (13 779,0)
                             --------      --------               --------

Operating profit before
acquisition costs and
finance costs                 1 914,7       1 785,5       7,2     4 126,5
Aquisition costs                    -        (48,6)                (79,4)
Finance costs                 (373,7)       (339,4)               (696,6)
                             --------      --------               --------
Profit before tax             1 541,0       1 397,5               3 350,5
Income tax expense            (384,0)       (390,6)               (942,3)
                             --------      --------               --------
Profit for the period         1 157,0       1 006,9                2 408,2
                             ========      ========               ========

Attributable to:
Equity holders of The
Foschini Group Limited        1 156,8       1 006,1                2 406,9
Non-controlling                                  0,
interest                          0,2             8                     1,3
                             --------      --------               --------
Profit for the period         1 157,0       1 006,9                2 408,2
                                                                   =======
                             ========      ========                   =


Earnings per ordinary
share (cents)
Total
Basic                               500,8       459,5        9,0     1 070,2
Diluted (basic)                     496,8       456,9        8,7     1 060,0

* Refer to note 14 for the impact of the changes in accounting policies


CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

                                                       Restated*    Restated*
                                         6 months       6 months   Year ended
                                         ended 30       ended 30           31
                                        Sept 2018      Sept 2017   March 2018
                                        Unaudited      Unaudited      Audited
                                               Rm             Rm           Rm

Profit for the period                        1 157,0     1 006,9     2 408,2
                                            --------    --------    --------
Other comprehensive income
(loss):
Items that will never be
reclassified to profit or loss
Actuarial gain on post-retirement
defined benefit plan                               -           -        34,2
Deferred tax on items that will
never be reclassified to profit
or loss                                            -           -       (9,6)
Items that are or may be
reclassified to profit or loss
Movement in effective portion of
changes in fair value of cash
flow hedges                                    111,8        32,8        27,2
Foreign currency translation
reserve movements                              814,3       331,6     (555,7)
Deferred tax on items that are or
may be reclassified to profit or
loss                                          (32,7)       (9,2)      (8,6)
                                            --------    --------    --------
Other comprehensive income (loss)
for the period, net of tax                     893,4       355,2     (512,5)
                                            --------    --------    --------
Total comprehensive income for
the period                                   2 050,4     1 362,1    1 895,7
                                            ========    ========    ========
Attributable to:
Equity holders of The Foschini
Group Limited                                2 050,2     1 361,3    1 894,4
Non-controlling interest                         0,2         0,8        1,3
                                            --------    --------    --------
Total comprehensive income for
the period                                   2 050,4     1 362,1     1 895,7
                                        ========   ========      ========

                                                   Restated*     Restated*
                                       Sept 2018   Sept 2017    March 2018
Supplementary Information              Unaudited   Unaudited       Audited

Net number of ordinary shares in
issue (millions)                           230,9      230,6         231,3
Weighted average number of
ordinary shares in issue
(millions)                                 231,0      219,0         224,9
Tangible net asset value per
ordinary share (cents)                   2 188,9    2 147,9       2 358,1

* Refer to note 14 for the impact of the changes in accounting
policies.


CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

                                           Equity
                                       holders of       Non-
                                     The Foschini controllin        Total
                                    Group Limited g interest       equity
                                               Rm        Rm            Rm

Equity at 31 March 2017 -               10 515,3          4,2    10 519,5
audited
IFRS 15 transition*                      (118,4)          -       (118,4)
                                        --------   --------      --------
Equity at 31 March 2017 -
audited - restated*                     10 396,9        4,2      10 401,1
                                        --------   --------      --------
Profit for the period - restated*        1 006,1        0,8       1 006,9
Other comprehensive income
Movement in effective portion of
changes in fair value of cash
flow hedges                                 32,8            -        32,8
Foreign currency translation
reserve movements                          331,6            -       331,6
Deferred tax on movement in other
comprehensive income                       (9,2)          -         (9,2)
                                        --------    --------      --------
Total comprehensive income for
the period                               1 361,3          0,8     1 362,1
Contributions by and
distributions to owners
Share-based payments reserve
movements                                   71,9       -        71,9
Dividends paid                           (865,8)     (0,9)     (866,7)
Share capital issued and share
premium raised                           2 474,5          -     2 474,5
Proceeds from sale of shares in
terms of share incentive schemes             6,8          -       6,8
Shares purchased in terms of
share incentive schemes                  (225,6)          -    (225,6)
Increase in the fair value of the
put option liability                      (30,0)          -     (30,0)
                                        --------   --------   --------
Equity at 30 September 2017 –
unaudited – restated*                 13 190,0        4,1   13 194,1
Profit for the period – restated*      1 400,8        0,5    1 401,3
Other comprehensive income
Actuarial gain on post-retirement
benefit plan                            34,2          -       34,2
Movement in effective portion of
changes in fair value of cash
flow hedges                            (5,6)          -     (5,6)
Foreign currency translation
reserve movements                    (887,3)          -    (887,3)
Deferred tax on movement in
other comprehensive income             (9,0)          -      (9,0)
                                    --------   --------   --------
Total comprehensive income for
the period                             533,1        0,5     533,6
Contributions by and
distributions to owners
Share-based payments reserve
movements                               83,1          -       83,1
Dividends paid                       (760,4)      (0,1)    (760,5)
Share capital issued and share
premium raised                         (1,5)          -     (1,5)
Proceeds from sale of shares in
terms of share incentive schemes        84,9          -       84,9
Shares purchased in terms of
share incentive schemes                (6,0)          -     (6,0)
Increase in the fair value of the
put option liability                   (1,7)          -      (1,7)
                                    --------   --------   --------
Equity at 31 March 2018 – audited
- restated*                         13 121,5        4,5   13 126,0
IFRS 9 transition*                   (517,4)          -    (517,4)
                                    --------   --------   --------
Equity at 1 April 2018 –            12 604,1        4,5   12 608,6
unaudited
Profit for the period                1 156,8        0,2    1 157,0
Other comprehensive income
Movement in effective portion of
changes in fair value of cash
flow hedges                          111,8          -        111,8
Foreign currency translation
reserve movements                    814,3          -        814,3
Deferred tax on movement in
other comprehensive income           (32,7)          -       (32,7)
                                   --------     --------     --------
Total comprehensive income for
the period                         2 050,2           0,2     2 050,4
Contributions by and
distributions to owners
Share-based payments reserve
movements                             82,5            -        82,5
Dividends paid                       (983,3)          -     (983,3)
Proceeds from sale of shares in
terms of share incentive schemes       13,8           -        13,8
Shares purchased in terms of
share incentive schemes              (228,7)          -      (228,7)
Realisation on disposal of non-
controlling interest                     -        (4,7)        (4,7)
                                   --------     --------     --------
Equity at 30 September 2018 -
unaudited                          13 538,6           -     13 538,6
                                   ========     ========     ========

* Refer to note 14 for the impact of the changes in accounting
policies.


                                       6 months      6 months   Year ended
                                       ended 30      ended 30           31
                                      Sept 2018     Sept 2017   March 2018
                                      Unaudited     Unaudited      Audited
Dividend per ordinary share
(cents)
Interim                                   330,0        325,0        325,0
Final                                         -            -        420,0
                                       --------     --------     --------
Total                                     330,0        325,0        745,0
                                       ========     ========     ========


CONDENSED CONSOLIDATED CASH FLOW STATEMENT
                                                    Restated*    Restated*
                                       6 months      6 months   Year ended
                                       ended 30      ended 30     31 March
                                      Sept 2018     Sept 2017         2018
                                      Unaudited     Unaudited      Audited
                                             Rm            Rm           Rm

Cash flows from operating
activities
Operating profit before working
capital changes (note 9)                2 460,6      2 159,6      5 029,7
Increase in working capital             (376,3)       (26,1)      (937,2)
                                       --------    --------    --------
Cash generated from operations          2 084,3     2 133,5     4 092,5
Interest income                            18,4        25,8        48,0
Finance costs                           (373,7)     (339,4)     (696,6)
Taxation paid                           (487,9)     (492,4)     (960,2)
Dividends paid                          (983,3)     (866,7)   (1 627,2)
                                       --------    --------    --------
Net cash inflows from operating
activities                                257,8       460,8         856,5
                                       --------    --------      --------
Cash flows from investing
activities
Purchase of property, plant and
equipment and intangible assets         (462,2)     (372,3)      (896,6)
Acquisition of assets through
business combinations                         -   (2 712,3)    (2 898,9)
Acquisition of management buy-out             -           -       (41,3)
Proceeds from sale of property,
plant and equipment                         5,2        5,8          40,4
Proceeds from disposal of non-
controlling interest                        3,5           -            -
                                       --------    --------      --------
Net cash outflows from investing
activities                              (453,5)   (3 078,8)     (3 796,4)
                                       --------    --------      --------
Cash flows from financing
activities
Shares purchased in terms of
share incentive schemes                 (228,7)     (225,6)       (231,6)
Proceeds on issue of share
capital                                       -    2 474,5       2 473,0
Proceeds from sale of shares in
terms of share incentive schemes           13,8         6,8          91,7
Increase in interest-bearing debt         151,4       238,2       1 067,9
                                       --------    --------      --------
Net cash (outflows) inflows from
financing activities                     (63,5)     2 493,9       3 401,0
                                       --------    --------      --------
Net (decrease) increase in cash
during the period                       (259,2)     (124,1)        461,1
Cash at the beginning of the
period                                  1 206,1       878,5        878,5
Cash held in non-controlling
interest                                  (6,4)           -            -
Effect of exchange rate
fluctuations on cash held                  62,0       (9,6)       (133,5)
                                       --------    --------      --------
Cash at the end of the period           1 002,5       744,8       1 206,1
                                       ========    ========      ========

* Refer to note 14 for the impact of the changes in accounting
 policies.


CONDENSED CONSOLIDATED SEGMENTAL ANALYSIS

                         TFG Africa                                    TFG
                          retail*** Credit***      TFG London    Australia
                           Unaudited   Unaudited     Unaudited    Unaudited
                                  Rm          Rm            Rm           Rm
6 months ended 30
September 2018
External revenue          10 437,3       219,9        3 558,9     2 372,2
External interest
income                        18,4        860,0             -           -
                           -------      -------       -------     --------
Total revenue**           10 455,7      1 079,9       3 558,9     2 372,2
                          ========     ========      ========     =======
External finance costs     (334,8)            -        (31,1)       (7,8)
Depreciation and
amortisation               (272,3)            -        (85,7)      (79,0)
Segmental profit
before tax                 1 012,8        323,8         127,3        179,2


                          Restated* Restated
                         TFG Africa                                    TFG
                          retail*** Credit***      TFG London    Australia
                         Unaudited Unaudited        Unaudited    Unaudited
                                Rm         Rm              Rm           Rm
6 months ended 30
September 2017
External revenue           9 657,3       171,0        2 272,8        896,3
External interest
income                        25,4        857,4             -         0,4
                          --------     --------      --------     -------
Total revenue**            9 682,7      1 028,4       2 272,8       896,7
                          ========     ========      ========     =======
External finance costs     (296,7)            -        (38,7)       (4,0)
Depreciation and
amortisation               (245,5)            -        (57,5)      (28,3)
Segmental profit
before tax                  972,0       323,6         156,1         33,5


                          Restated* Restated
                         TFG Africa                                    TFG
                          retail*** Credit***      TFG London    Australia
                           Audited    Audited         Audited      Audited
                                Rm         Rm              Rm           Rm
Year ended 31 March
2018
External revenue            20 861,5        364,2      5 348,9      3 132,6
External interest
income                          47,3       1 707,8           -          0,7
                            --------      --------    --------     --------
Total revenue**             20 908,8       2 072,0     5 348,9      3 133,3
                            ========      ========    ========      =======
External finance costs       (617,1)             -      (66,5)       (13,0)
Depreciation and
amortisation                  (510,2)            -     (132,2)      (103,1)
Segmental profit
before tax                    2 367,7        742,8       202,1        253,1


                                                                  Restated*
                                            Total    Restated*        Total
                                          30 Sept        Total     31 March
                                             2018 30 Sept 2017         2018
                                        Unaudited    Unaudited      Audited

External revenue                          16 588,3    12 997,4     29 707,2
External interest
income                                       878,4       883,2      1 755,8
                                          --------    --------     --------
Total revenue**                           17 466,7    13 880,6     31 463,0
                                          ========    ========     ========
External finance costs                     (373,7)     (339,4)      (696,6)
Depreciation and
amortisation                              (437,0)      (331,3)      (745,5)
Segmental profit before tax               1 643,1      1 485,2      3 565,7
Reconciling items to Group profit
before tax
Foreign exchange transactions                  4,0       (1,5)       (13,2)
Share-based payments                        (82,5)      (71,9)      (155,0)
Operating lease
liability adjustment                        (23,6)      (14,3)       (47,0)
Group profit before tax                    1 541,0     1 397,5      3 350,5
Capital expenditure                          462,2       372,3        896,6


* Refer to note 14 for the impact of the changes in accounting
policies.
** Includes retail turnover, interest income and other income.
*** The chief operating decision-maker assessed the Group's current operating
segments and concluded that the value-added services and central and shared
services segments would be allocated to TFG Africa as this better reflects
the current operating segments within the Group. In addition, certain costs
were reallocated between credit and TFG Africa. The comparable prior periods
information has been restated accordingly.

NOTES
1. The unaudited interim condensed consolidated results for the half-
year ended 30 September 2018 are prepared in accordance with and
containing information required by IAS 34: Interim Financial
Reporting, as well as the SAICA Reporting Guides as issued by the
Accounting Practices Committee and Financial Pronouncements as issued
by the Financial Reporting Standards Council and in accordance with
the requirements of the Companies Act of South Africa. The accounting
policies in the preparation of these unaudited interim condensed
consolidated results are in terms of International Financial Reporting
Standards ("IFRS") and are consistent with those applied in the
previous consolidated annual financial statements except as disclosed
in note 2. These results were prepared by the TFG Finance and Advisory
department acting under supervision of Anthony Thunström CA(SA), CEO
of The Foschini Group Limited.


2.       During   the   period, the Group adopted the following revised
accounting standards:
     •    IFRS 15: Revenue from Contracts with Customers
     •    IFRS 9: Financial Instruments

          Refer to note 14 for the impact of the changes in accounting
          policies.

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.


                                               Restated*
                                    6 months    6 months    Restated*
                                       ended       ended  Year ended
                                     30 Sept     30 Sep    31 March
                                       2018        2017        2018
                                   Unaudited   Unaudited    Audited
                                      Rm             Rm         Rm
4. Inventory
Inventory at period end              7 609,5    6 412,5     6 900,6
                                    ========   ========    ========
Inventory write-downs included       138,2      113,9        260,2
above
                                   --------    --------   --------
5. Revenue
Retail turnover                    15 913,1    12 377,5   28 519,5
Interest income (note 6)              878,4       883,2    1 755,8
Other income (note 7)                 675,2       619,9    1 187,7
                                   --------    --------   --------
                                   17 466,7    13 880,6   31 463,0
                                   --------    --------   --------
6. Interest income
Trade receivables – retail            860,0       857,4    1 707,8
Sundry                                 18,4        25,8       48,0
                                   --------    --------   --------
                                      878,4       883,2    1 755,8
                                   --------    --------   --------


7. Other income
Value-added services                  446,5       429,9      806,6
Collection cost recovery              219,9       171,0      364,2
Sundry income                           8,8        19,0       16,9
                                   --------    --------   --------
                                      675,2       619,9    1 187,7
                                   --------    --------   --------


8. Trading expenses
Depreciation and amortisation       (436,9)     (331,3)     (745,5)
Employee costs                    (2 876,1)   (2 062,4)   (4 948,0)
Occupancy costs                   (2 048,6)   (1 461,1)   (3 411,5)
Net bad debt                        (514,8)     (464,6)     (837,5)
Other operating costs             (2 289,1)   (1 710,3)   (3 836,5)
                                   --------    --------    --------
                                                                (13
                                  (8 165,5)   (6 029,7)
                                                             779,0)
                                   --------    --------    --------

9. Operating profit before
working capital changes
Profit before tax                   1 541,0     1 397,5    3 350,5
Finance cost                          373,7       339,4      696,6
                                   --------    --------   --------
Operating profit before finance
costs                               1 914,7     1 736,9    4 047,1
Interest income – sundry             (18,4)      (25,8)     (48,0)
Non-cash items
Depreciation and amortisation         436,9       331,3      745,5
Operating lease liability
adjustment                             23,6        14,3       47,0
Share-based payments                   82,5        71,9      155,0
Post-retirement defined benefit         9,0         8,5       16,9
medical aid movement
Foreign currency translation
reserve movements                     (4,0)           1,5     13,2
Cash-settled share incentive
                                       - -            0,1
Profit on disposal of non-
controlling interest                  (1,4)           -         -
Loss on disposal of property,
plant and equipment                   18,0          21,4       54,4
Profit on disposal of property,
plant and equipment                   (0,3)         (0,4)      (1,5)
                                    --------      --------    --------
                                     2 460,6       2 159,6     5 029,7
                                    --------      --------     --------

10. Reconciliation of profit for
the period to headline earnings
Profit for the period
attributable to equity holders of
The Foschini Group Limited           1 156,8       1 006,1       2 406,9
Adjusted for:
Profit on disposal of property,
plant and equipment                    (0,3)         (0,4)         (1,5)
Loss on disposal of property,
plant and equipment                    18,0          21,4           54,4
Profit on disposal of non-
controlling interest                  (1,4)             -            -
                                       --------      --------    --------
Headline earnings before tax            1 173,1       1 027,1     2 459,8
Tax on headline earnings
                                                                   (11,0)
adjustments                               (4,3)         (4,3)
                                       --------      --------     --------
Headline earnings                       1 168,8       1 022,8      2 448,8
Acquisition costs                             -          48,6        79,4
                                       --------      --------      --------
Headline earnings excluding
                                                                   2 528,2
acquisition costs**                     1 168,8       1 071,4
                                       --------      --------     --------

                                                                   Restate
                                               Restated                d*
                                                      *              Year
                                    6 months   6 months             ended
                                       ended      ended                31
                                     30 Sept    30 Sept          %   March
                                        2018       2017      change  2018
                                               Unaudite
                                   Unaudited          d               Audited
Earnings per ordinary share (cents)
Total
Basic                                500,8        459,5         9,0   1 070,2
Headline                                 506,0    467,1         8,3   1 088,8
Diluted (basic)                          496,8    456,9         8,7   1 060,0
Diluted (headline)                       502,0    464,5         8,1   1 078,4

Total (excluding acquisition
costs)**
Basic                                    500,8    481,7         4,0   1 105,5
Headline                                 506,0    489,3         3,4   1 124,1
Diluted (basic)                          496,8    479,0         3,7   1 094,9
Diluted (headline)                       502,0    486,6         3,2   1 113,4

* Refer to note 14 for the impact of the changes in accounting
policies.
** Headline earnings excluding acquisition costs is calculated to
remove the impact of the prior period acquisition costs of the RAG, G-
star Raw and Hobbs acquisitions as well as the TFG London management
buy-out.

This   pro  forma   financial  information   has  been   prepared  for
illustrative purposes only to provide information on the headline
earnings excluding acquisition costs per share. Because of its nature,
the pro forma financial information may not be a fair reflection of
the Group’s results of operation, financial position, changes in
equity or cash flows. There are no events subsequent to the reporting
date which require adjustment to the pro forma information. The
directors are responsible for compiling the pro forma financial
information in accordance with the JSE Limited Listings Requirements
and in compliance with the SAICA Guide on Pro Forma Financial
Information. The underlying information used in the preparation of the
pro forma financial information has been prepared using the accounting
policies in place for the period ended 30 September 2018.

11. Related parties
During the period, the Group entered into related party transactions
in the ordinary course of business, the substance of which are similar
to those disclosed in the Group’s annual financial statements for the
year ended 31 March 2018.

12. Subsequent events
No significant events took place between the period ending 30
September 2018 and date of issue of this report.

13. Changes to directors
During the current period the following changes took place:
  • Doug Murray stepped down as CEO on 3 September 2018 and retired from
      the Group at the end of September 2018.
  •   Anthony Thunström, previously the CFO of the Group, assumed the
      position of CEO on 3 September 2018.

14.   Change in accounting policies
14.1 IFRS 15: Revenue from Contracts with Customers

     During the current year, the Group has adopted IFRS 15. This
     standard applies specific rules whereby the timing of cash
     payments specified in a contract are different to the transfer of
     control of the related goods to the customer, thus changing when
     the related revenue is recognised.

     IFRS 15 Revenue from Contracts with Customers replaces IAS 18
     Revenue and IAS 11 Construction Contracts. It is a single,
     comprehensive revenue recognition model for all contracts with
     customers and has the objective of achieving greater consistency
     in the recognition and presentation of revenue.

     In terms of the new standard, revenue is recognised based on the
     satisfaction of performance obligations, which occurs when
     control of goods transfers to a customer.

     The Group previously accounted for lay-by revenue on the
     initiation of the contract. With the adoption of IFRS 15, the
     Group now accounts for the revenue once the contract is concluded
     and risks and rewards have been transferred to the customer. Upon
     receipt of final payment from the customer, control of the goods
     will transfer to the customer and the sale will be concluded. On
     conclusion, the full revenue will be recognised by the Group at
     this point in time.

     The Group has adopted this standard fully retrospectively as at
     the start of the earliest period presented, as is permitted in
     the transitional arrangements. The change in accounting policy
     has therefore resulted in a restatement of the comparative
     figures   on  the  statement   of  financial  position,  income
     statement, statement of changes in equity and statement of cash
     flows.

     Refer to the details below for a summary of the effect of this
     change in the IFRS 15 accounting policy.



                                   Audited               Restated
                                  31 March               31 March
                                      2017     IFRS 15   2017
                                   Rm           Rm        Rm
Consolidated statement of
financial position
Non-current assets
Deferred taxation asset            483,6       31,8      515,4

Current assets
Inventory                         5 511,2      92,6    5 603,8
Trade receivables - retail        7 000,7   (157,4)    6 843,3

Equity
Total equity                     10 519,5   (118,4)   10 401,1

Current liabilities
Trade and other payables          2 751,3      85,4    2 836,7

                                Unaudited             Restated
                                  30 Sept              30 Sept
                                     2017   IFRS 15       2017
                                       Rm        Rm         Rm
Consolidated statement of
financial position
Non-current assets
Deferred taxation asset             683,9      45,4      729,3

Current assets
Inventory                         6 276,0     136,5    6 412,5
Trade receivables - retail        7 121,0   (226,0)    6 895,0

Equity
Total equity                     13 346,6   (152,5)   13 194,1

Current liabilities
Trade and other payables          3 388,9     108,4    3 497,3

Consolidated income statement
Retail turnover                  12 469,1    (91,6)    12 377,5
Cost of turnover                (6 109,3)      43,9   (6 065,4)
Income tax expense                (404,2)      13,6     (390,6)

Consolidated cash flow
statement
Operating cash flows before
working capital changes           2 207,3    (47,7)    2 159,6
Increase in working capital        (73,8)      47,7     (26,1)

                                  Audited              Restated
                                 31 March              31 March
                                     2018   IFRS 15        2018
                                       Rm        Rm         Rm
Consolidated statement of
financial position
Non-current assets
Deferred taxation asset             620,6      43,0      663,6

Current assets
Inventory                         6 773,6     127,0    6 900,6
Trade receivables - retail        7 573,8   (200,2)    7 373,6
Equity
Total equity                     13 272,3   (146,3)   13 126,0

Current liabilities
Trade and other payables         3 608,2     116,1     3 724,3

Consolidated income statement
Retail turnover                  28 593,0   (73,5)    28 519,5
Cost of turnover               (13 591,9)    34,4   (13 557,5)
Income tax expense                (953,5)    11,2      (942,3)

Consolidated cash flow
statement
Operating cash flows before
working capital changes          5 068,8   (39,1)     5 029,7
Increase in working capital      (976,3)    39,1      (937,2)

14.2 IFRS 9: Financial
Instruments

IFRS 9: Financial Instruments (IFRS 9) was issued in July 2014 and has
replaced IAS 39: Financial Instruments: Recognition and Measurement
(IAS 39). The standard is effective from 1 January 2018 and was
implemented by the Group from 1 April 2018. This standard incorporates
amendments to the classification and measurement of financial
instruments, hedge accounting guidance and the accounting requirements
for the impairment of financial assets measured at amortised cost and
fair value through other comprehensive income (OCI).

Adoption of IFRS 9
As permitted by IFRS 9, the Group has elected not to restate its
comparative financial statements. IFRS 9 has been retrospectively
adopted on 1 April 2018 with an adjustment to the Group’s opening 1
April 2018 retained earnings.    Comparability will therefore not be
achieved due to the fact that the comparative financial information
has been prepared in accordance with IAS 39: Financial Instruments:
Recognition and Measurement (IAS 39).

Certain disclosures and classifications within these results were
aligned to provide comparable data. These did not result in a
restatement to the Group’s statement of financial position as at 31
March 2018.

Classification and measurement
IFRS 9 requires all financial assets to be classified and measured on
the basis of the Group’s business model for managing the financial
assets and the contractual cash flow characteristics of the financial
assets. Management have assessed the business models which apply to the
financial assets held by the Group and the financial instruments have
been classified into the appropriate IFRS 9 categories.
Trade receivables - retail, other receivables and prepayments and
concession receivables satisfy the conditions for classification at
amortised cost and hence there is no change to the classification and
measurement of these assets. There has been no change to the
classification of the Group’s financial liabilities which are
classified and measured at amortised cost.

Measurement of ECLs
Impairments in terms of IFRS 9 are determined based on an expected
credit loss (ECL) model, as opposed to an incurred loss model applied
in terms of IAS 39. The ECL model applies to all financial assets
measured at amortised cost. The measurement of ECLs reflects a
probability-weighted outcome, the time value of money and the best
forward-looking information available to the Group.         The Group
measures ECL using probability of write-off, exposure at write-off,
timing of when write-off is likely to occur and loss given write-off.
These components are multiplied together and adjusted for the
likelihood of write-off. The calculated ECL is discounted using the
original effective interest rate applicable to the financial asset.

The Group has adopted the simplified approach which recognises
lifetime expected credit losses regardless of stage classification.
Store account customer balances can move in both directions through
the stages of the impairment model.

At each reporting date the Group assesses whether financial assets
carried at amortised cost are credit-impaired and therefore classified
as stage 3. A financial asset is credit-impaired when one or more
events that have a detrimental impact on the estimated future cash
flows of the financial asset have occurred. The Group's definition of
credit-impaired is aligned to our internal definition of default. IFRS
9 does not define default. The Group has adopted the rebuttable
presumption that default is evident where a store account customer is
in arrears for more than 90 days based on contractual payment
requirements.

When a financial asset is classified as stage 3 impaired, interest
income is calculated on the impaired value (gross carrying amount less
impairment allowance) based on the original effective interest rate.
The contractual interest income on the gross carrying amount of the
financial asset is suspended and is only recognised in interest income
when the financial asset is reclassified out of stage 3.

No provision is made and held against unutilised facilities based on
the fact that the facility does not meet the definition of a loan
commitment, given that the Group can refuse or limit future purchases
at any point.

Forward-looking information
The calculation of the ECL incorporates forward-looking information
that can be sourced without undue cost or effort and which is deemed
to be reasonable and supportable. This forward-looking view includes:
- Information based on expected future macro-economic conditions;
- Potential impacts based on industry specific challenges, including
but not limited to potential legislative changes; and
- Expert management judgement.

Significant judgement and estimates are applied in the process of
incorporating forward-looking information into the ECL calculation.

The following approach will be followed to assess forward-looking
information via a formerly mandated governance committee. This would
entail:
- Use of third party economic reports and forecasts;
- Upside and downside scenarios based on alternative macro-economic
conditions which will be compared to our base scenario and will be
probability-weighted based on our best estimate of their relative
likelihood ; and
- A governance process to approve the probability-weighting and
scenarios used.

Write-off policy
The Group writes off its trade receivables when it has no reasonable
expectations of recovering the trade receivable in its entirety, or a
portion thereof.    The Group utilises both an in-house collection
department and external collection specialists in an effort to recover
outstanding amounts.    Trade receivables are written off where the
store account customer has not made a qualifying payment for 6 months.

Presentation of impairment
Loss allowances for financial assets measured at amortised cost are
deducted from the gross carrying amount of the assets, and the
amortised cost is presented on the face of the statement of financial
position.

Impact on the financial statements
The following table sets out the impact of the changes in accounting
policies and retrospective adjustments made for each individual line
item affected on the financial statements for IFRS 15 and the
retrospective impact of IFRS 9 recognised in the opening statement of
financial position on 1 April 2018. IFRS 9 was adopted without
restating comparative information and the impact is not reflected in
the restated comparatives.


                                                 Restate
                                                       d
                            Audited                   31
                           31 March                March            1 April
                               2018   IFRS 15*      2018   IFRS 9      2018
                                 Rm         Rm        Rm       Rm        Rm
Consolidated   statement
of financial position
Non-current assets
Deferred taxation asset       620,6      43,0       663,6    176,0     839,6

Current assets
Trade    receivables   -
retail                      7 573,8    (200,2)     7 373,6  (542,5)   6 831,1
Concession receivables        296,8         -       296,8   (150,9)     145,9

Equity
                                                                               
Total equity               13 272,3    (146,3)     13 126,0 (517,4)  12 608,6

* Refer to note 14.1 for the impact of the IFRS 15 change in
accounting policy.

Company information

Non-executive Directors:
M Lewis (Chairman), F Abrahams, S E Abrahams, G H Davin, D Friedland,
B L M Makgabo-Fiskerstrand, E Oblowitz, N V Simamane, R Stein
Executive Directors:
A E Thunström
Company Secretary:
D van Rooyen
Registered office:
Stanley Lewis Centre, 340 Voortrekker Road, Parow East, 7500, South
Africa
Transfer secretaries:
Computershare Investor Services Proprietary Limited
Rosebank Towers, 15 Biermann Avenue, Rosebank, Johannesburg, 2196,
South Africa
Sponsor:
UBS South Africa Proprietary Limited

Visit our website at http://www.tfglimited.co.za

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