| Wed 9 Sep 2009, 14:00 | | FOS/FOSP - Foschini Ltd - Results of Annual General Meeting and Statement by the |
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FOS FOSP
FOS
FOS/FOSP - Foschini Ltd - 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
STATEMENT BY THE CEO
At Foschini`s 72nd Annual General Meeting held earlier today, CEO Doug Murray
updated the meeting as follows:
"RESULTS FOR 2009
In the context of the economic climate which prevailed during the 2009 financial
year both locally and in global markets, we believe our result is satisfactory,
particularly the second half performance. Whilst the first half of the year
produced turnover growth of 2,9% and a reduction in headline earnings of 2,7%,
the second half saw a significant improvement with turnover growth of 7,8% and
an increase in headline earnings of 6,1%. For the year as a whole retail
turnover increased by 5,5%, whilst headline earnings per share increased by
2,3%. Diluted headline earnings per share was up 2,8%. Our total dividend for
the year was maintained at 288 cents per share.
Whilst trading was difficult the year saw highlights, some of which are as
follows:
* Operating margin improved to 25,0% from 24,8%.
* Operating profit before finance charges and tax in excess of R2 billion.
* Good performance from our retail debtors` book.
* The group`s return on equity of 26,9%.
As referred to in our annual report, there were two major challenges for our
group during this year. Firstly, Foschini stores, which represents 30% of our
group retail turnover, had significantly underperformed our other trading
divisions and the market place for a number of years. The repositioning and
turnaround strategy which was put in place is proving successful, resulting in
far better merchandise selection and store layout. This is evidenced by a
significantly improved second half financial performance. Secondly, our
financial services division, RCS Group, mainly as a result of the world wide
banking crisis, had to restructure its activities to the level of its funding as
well as consider new sources of funding other than from its shareholders. The
business has been restructured and will be able to trade profitably for the
whole of the current financial year without any source of new funding.
PROSPECTS FOR THE 2010 FINANCIAL YEAR
I would now like to comment briefly on the group`s prospects for 2010.
* Notwithstanding the reduction in interest rates and inflation, we expect
trading conditions to remain difficult.
*All our divisions have strategies in place to contend with difficult times.
*Our retail debtors` book is performing satisfactorily in the current climate.
*In line with our strategy of investing for long-term growth we will continue to
open new stores in certain of our formats that are under-represented and we
anticipate increasing trading space by between 9% and 10% in the current year.
*Trading conditions for the first five months of this financial year have
remained extremely tough and volatile. Total sales have grown by 8,3% over the
previous period with growths in the various merchandise categories as follows:
- Clothing: 12,0%
- Jewellery: -3,0%
- Cosmetics: 17,7%
- Cellphones: -13,0%
- Homewares: 20,4%
Whilst the growth in jewellery sales is negative, our view is that this
division, in the current climate, has performed well.
The most disappointing category is cellphones where we are currently
experiencing supply issues and remain understocked. This stock position should
be regularized by November.
*Our expectation is that the economy will start improving but only from the last
quarter of our financial year, as lower interest rates begin to assist
consumers. In addition, the second half of the year is heavily dependant 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, 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.
The special resolution will be lodged for registration with the Registrar of
Companies.
Cape Town
9 September 2009
SPONSOR:
UBS South Africa (Pty) Ltd
Date: 09/09/2009 14:00:01 Produced by the JSE SENS Department.
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