| Wed 1 Sep 2010, 12:56 | | FOS/FOSP - Foschini Ltd - Statement by the CEO at the Annual General Meeting |
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FOS FOSP
FOS
FOS/FOSP - Foschini Ltd - Statement by the CEO 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 73rd Annual General Meeting held today, CEO Doug Murray updated
the meeting as follows:
"RESULTS FOR 2010
The 2010 financial year was difficult and volatile for our group with consumer
spending worsening during the second half of the year. The significantly higher
than projected unemployment figures also had a negative impact on our sector.
In the context of the economic climate which prevailed during the year, we
believe our result was slightly disappointing. After six exceptional years from
2002 to 2007, when our compounded HEPS grew at 48,4%, the economic cycle turned
and we have now completed the third year in the current down cycle.
The first half of the year produced turnover growth of 7,9% with an increase in
HEPS of 1,5% whilst the second half worsened with turnover growth of 5% and a
reduction in HEPS of 12,6%. For the year as a whole, turnover increased by 6,4%
while headline earnings per share decreased by 6,8%. Our total dividend for the
year was maintained at 288 cents per share.
PROSPECTS FOR THE 2011 FINANCIAL YEAR
I would now like to comment briefly on the group`s prospects for 2011.
*Notwithstanding the reduced interest rate and inflation environment, we expect
trading conditions to remain challenging.
*The 2010 FIFA World Cup did create a more positive consumer sentiment with
improved consumer spending, which in our experience has continued post the World
Cup.
*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 approximately 7% in the current year.
*Trading conditions for the first five months of this financial year have been
encouraging. Total sales have grown by 12,9% over the previous period with same
stores sales growth of 8,6%. Growths in the various merchandise categories are
as follows:
- Clothing: 12,4%
- Jewellery: 10,7%
- Cosmetics: 6,8%
- Cellphones: 23,3%
- Homewares: 16,8%
Particularly pleasing is the growth in clothing of 12,4% following its strong
growth of 12% in the corresponding period last year.
*Our retail debtors` book is performing satisfactorily in the current climate
and the quality of the book continues to improve.
*Whilst continued unemployment in the economy remains a potential risk, we are
cautiously optimistic regarding trading for the remainder of this year. As
always, 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.
Cape Town
1 September 2010
SPONSOR:
UBS South Africa (Pty) Ltd
Date: 01/09/2010 12:56:00 Produced by the JSE SENS Department.
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