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FOS FOSP
FOS
FOS / FOSP - Foschini - Results of Annual General Meeting and Statement by
the Chairman at the Annual General Meeting
Foschini Ltd
Registration number 1937/009504/06
Share codes: FOS-FOSP
ISIN codes: ZAE000031019 - ZAE000031027
Results of Annual General Meeting and Statement by the Chairman
STATEMENT BY THE CHAIRMAN
At Foschini`s 71st Annual General Meeting held earlier today, Chairman Eliot
Osrin updated the meeting as follows:
"RESULTS FOR 2008
As appears from our published accounts, the advance in profit achieved by our
group for the year ended March 2008 was more modest than in the previous six
years, with headline earnings per share increasing by 2,4% and diluted
headline earnings per share increasing by 4,5%. This reflects the more
difficult trading environment which prevailed, particularly in the credit non-
durables sector.
Whilst trading was difficult the year saw highlights, some of which are as
follows:
* Operating margin of 24,8%, close to our record of 26,1%.
* Net profit before tax in excess of R1,7 billion.
* The final dividend being maintained at 170,0 cents per share.
* Good performance from our retail debtors` book.
* Return on average equity of 29,6%.
The businesses in which we trade are cyclical in nature and after our
previous six years of above average compound growth in earnings, it was
inevitable that a slowdown would occur. The group is positioned as favourably
as possible to weather any downturn and emerge stronger than ever to continue
our above average growth when the economy turns.
Having regard to our strong balance sheet and cash flow, we have maintained
our final dividend at 170,0 cents per share, meaning that the total dividend
for the year has been increased by 6,7% to 288,0 cents per share.
TRADING DIVISIONS
All our divisions performed satisfactorily in the first half of the year, but
since mid-June 2007, trading conditions became more difficult.
RCS GROUP
Our RCS financial services division experienced a challenging year having
been affected by the introduction of the National Credit Act, which resulted
in a reduction in the number of new loans advanced. Profit before tax for the
year from this division reduced from R322,7 million to R269,6 million.
PROSPECTS FOR THE 2009 FINANCIAL YEAR
I would now like to comment briefly on the group`s prospects for 2009.
*Consumers are facing testing times as the economy slows down and inflation
rises. In attempting to maintain or improve our performance the group is
reliant on achieving good turnover levels while tightly containing costs.
*All our divisions have strategies in place to contend with difficult times.
The new management in our Foschini division, which underperformed last year,
is now fully entrenched in the business and next year we expect an improved
performance from this division. Our retail debtors` book is performing well
in the current climate, far better than what appears to be taking place in
the wider economy.
*We have been cautious in the past in the opening of new stores and whilst
this remains our approach, there are certain of our formats which are ready
for further roll-out and we anticipate opening well in excess of 100 stores
in the year ahead.
*Trading conditions for the first five months of this financial year have
been extremely tough and costs for the year have been curtailed to levels
appropriate to the expected turnover for the year. Total sales have grown by
2,2% over the previous period with growths in the various divisions being as
follows:
- @home: 3,7%
- Exact!: 4,9%
- Foschini division: -4,4%
- Jewellery division: 3,2%
- Markham: 11,5%
- Sports division: 8,2%
*We expect that the retail environment will continue to be extremely
difficult in the short term as consumers have to contend with high interest
rates and high inflation. The second half of this year is heavily dependant
on Christmas trading, which will determine whether we enjoy an increase in
earnings for the year.
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, notwithstanding the difficult trading conditions.
RESULTS OF ANNUAL GENERAL MEETING
Shareholders are advised that, at the annual general meeting of shareholders
of Foschini Ltd, which was held earlier today, all resolutions as proposed in
the notice of the annual general meeting were approved by the requisite
majority of members. Ordinary resolution number 5 was withdrawn due to Mr
Goodwin not wishing to stand for re-election.
The special resolution will be lodged for registration with the Registrar of
Companies.
Cape Town
3 September 2008
SPONSOR:
UBS South Africa (Pty) Ltd
Date: 03/09/2008 15:25:30 Produced by the JSE SENS Department.
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