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TFG TFGP
TFG
TFG/TFGP - The Foschini Group Limited - The Foschini Group Limited`s
results for the half-year ended 30 September 2011.
The Foschini Group Limited (formerly Foschini Limited) unaudited interim
condensed consolidated results
Registration number: 1937/009504/06
Share codes: TFG-TFGP
ISIN codes: ZAE000148466 - ZAE000148516
The following are The Foschini Group Limited`s results for the half-year
ended 30 September 2011.
This report has not been audited or reviewed by the company`s auditors.
SALIENT FEATURES
* Retail turnover up 18,5% to R5,4 billion
* Headline earnings per share up 25,6% to 341,9 cents
* Interim dividend up 37,7% to 190,0 cents per share
* Sustained strong financial position
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Sept. 2011 Sept. 2010 March 2011
Unaudited Unaudited Audited
Rm Rm Rm
ASSETS
Non-current assets
Property, plant and 1 208,1 1 003,0 1 086,9
equipment
Goodwill and intangible 36,9 43,0 37,0
assets
Staff housing loans 0,6 0,9 0,7
RCS Group private label card 256,1 258,5 320,8
receivables
RCS Group loan receivables 553,9 493,3 521,7
Participation in export 61,7 70,4 72,5
partnerships
Deferred taxation asset 242,2 162,7 249,9
---------- ---------- ----------
2 359,5 2 031,8 2 289,5
---------- ---------- ----------
Current assets
Inventory (note 10) 1 843,3 1 407,4 1 804,7
Trade receivables - retail 4 155,8 3 388,5 3 823,0
RCS Group private label card 1 930,5 1 646,6 1 709,4
receivables
Other receivables and 266,5 190,8 194,3
prepayments
RCS Group loan receivables 394,1 307,7 336,7
Participation in export 11,4 11,3 6,4
partnerships
Preference share investment 200,0 200,0 200,0
Cash 468,6 296,9 338,5
---------- ---------- ----------
9 270,2 7 449,2 8 413,0
---------- ---------- ----------
Total assets 11 629,7 9 481,0 10 702,5
========== ========== ==========
EQUITY AND LIABILITIES
Equity attributable to 5 763,0 4 981,3 5 462,9
equity holders of The
Foschini Group Limited
Non-controlling interest 513,4 455,6 485,6
-------- -------- --------
Total equity 6 276,4 5 436,9 5 948,5
-------- -------- --------
Non-current liabilities
Interest-bearing debt 225,8 187,4 262,8
RCS Group external funding 1 010,0 490,9 491,0
Non-controlling interest 214,4 120,3 144,3
loans
Operating lease liability 160,3 141,1 146,1
Deferred taxation liability 173,2 136,3 165,2
Post-retirement defined 91,0 87,0 91,0
benefit plan
---------- ---------- ----------
1 874,7 1 163,0 1 300,4
---------- ---------- ----------
Current liabilities
Interest-bearing debt 1 134,4 1 135,0 1 246,8
RCS Group external funding 490,0 201,1 417,0
Trade and other payables 1 754,2 1 499,5 1 710,7
Taxation payable 100,0 45,5 79,1
---------- ---------- ----------
3 478,6 2 881,1 3 453,6
---------- ---------- ----------
Total liabilities 5 353,3 4 044,1 4 754,0
---------- ---------- ----------
Total equity and liabilities 11 629,7 9 481,0 10 702,5
========== ========== ==========
CONDENSED CONSOLIDATED
INCOME STATEMENT
6 months 6 months Year ended
ended ended 31.03.2011
30.09.2011 30.09.2010
Unaudited Unaudited % Audited
Rm Rm change Rm
Revenue (note 5) 6 815,1 5 758,9 12 370,6
======= ======= =======
Retail turnover 5 428,3 4 581,6 18,5 9 936,5
Cost of turnover (3 156,0) (2 674,0) (5 768,1)
(note 6)
------- ------- -------
Gross profit 2 272,3 1 907,6 4 168,4
Interest income 813,0 736,3 1 486,2
(note 7)
Dividend income 5,7 6,3 12,1
Other revenue (note 568,1 434,7 935,8
8)
Trading expenses (2 415,1) (2 077,0) (4 301,3)
(note 9)
--------- --------- ---------
Operating profit 1 244,0 1 007,9 23,4 2 301,2
before finance
charges
Finance cost (137,1) (122,0) (250,1)
--------- --------- ------ ---------
Profit before tax 1 106,9 885,9 24,9 2 051,1
Income tax expense (359,7) (280,0) (662,3)
--------- --------- ------ ---------
Profit for the 747,2 605,9 1 388,8
period
========= ========= =========
Attributable to:
Equity holders of 699,0 566,3 23,4 1 301,8
The Foschini Group
Limited
Non-controlling 48,2 39,6 87,0
interest
--------- --------- ---------
Profit for the 747,2 605,9 1 388,8
period
========= ========= =========
EARNINGS PER
ORDINARY SHARE
(CENTS)
Basic 341,6 272,3 25,5 630,4
Headline 341,9 272,3 25,6 632,3
Diluted (basic) 333,1 268,5 24,1 618,1
Diluted (headline) 333,3 268,5 24,1 619,9
Weighted average 204,6 208,0 (1,6) 206,5
ordinary shares in
issue (millions)
SUPPLEMENTARY INFORMATION
Sept. 2011 Sept. 2010 March 2011
Unaudited Unaudited Audited
Net ordinary shares in issue 204,6 204,6 205,3
(millions)
Weighted average ordinary 204,6 208,0 206,5
shares in issue (millions)
Tangible net asset value per 2 798,9 2 413,6 2 642,9
ordinary share (cents)
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
6 6 Year ended
months months
ended ended
30.09.2011 30.09.2010 % change 31.03.2011
Unaudited Unaudited Audited
Rm Rm Rm
Profit for the 747,2 605,9 1 388,8
period
---------- ---------- ----------
OTHER COMPREHENSIVE
INCOME
Movement in 82,2 (11,3) (0,6)
effective portion of
changes in fair
value of cash flow
hedges
Foreign currency 5,7 (2,2) 1,0
translation reserve
movements
Movement in 0,1 - 2,9
insurance cell
reserves
---------- ---------- ----------
Other comprehensive 88,0 (13,5) 3,3
income for the
period before tax
Deferred tax on (26,9) 4,0 0,1
movement in
effective portion of
cash flow hedges
---------- ---------- ----------
Other comprehensive 61,1 (9,5) 3,4
income for the
period, net of tax
---------- ---------- ----------
Total comprehensive 808,3 596,4 1 392,2
income for the
period
========== ========== ==========
Attributable to:
Equity holders of 760,1 556,8 36,5 1 305,2
The Foschini Group
Limited
Non-controlling 48,2 39,6 87,0
interest
---------- ---------- ----------
Total comprehensive 808,3 596,4 1 392,2
income for the
period
========== ========== ==========
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Equity Non- Total
holders of controlling equity
The interest
Foschini
Group
Limited
Rm Rm Rm
Equity at 31 March 2010 5 058,3 427,0 5 485,3
Profit for the period 566,3 39,6 605,9
OTHER COMPREHENSIVE INCOME
Movement in effective portion (11,3) - (11,3)
of changes in fair value of
cash flow hedges
Foreign currency translation (2,2) - (2,2)
reserve movements
Deferred tax on movement in 4,0 - 4,0
effective portion of cash
flow hedges
---------- ---------- ----------
Total comprehensive income 556,8 39,6 596,4
for the half-year
CONTRIBUTIONS BY AND
DISTRIBUTIONS TO OWNERS
Share-based payments reserve 19,0 - 19,0
movements
Dividends paid (355,0) (11,0) (366,0)
Shares purchased in terms of (297,8) - (297,8)
share incentive schemes
---------- ---------- ----------
Equity at 30 September 2010 4 981,3 455,6 5 436,9
Profit for the period 735,5 47,4 782,9
OTHER COMPREHENSIVE INCOME
Movement in effective portion 10,7 - 10,7
of changes in fair value of
cash flow hedges
Foreign currency translation 3,2 - 3,2
reserve movements
Movement in insurance cell 2,9 - 2,9
reserves
Deferred tax on movement in (3,9) - (3,9)
effective portion of cash
flow hedges
---------- ---------- ----------
Total comprehensive income 748,4 47,4 795,8
for the half-year
CONTRIBUTIONS BY AND
DISTRIBUTIONS TO OWNERS
Share-based payments reserve 36,9 - 36,9
movements
Dividends paid (282,5) (17,4) (299,9)
Shares purchased in terms of (156,0) - (156,0)
share incentive schemes
Proceeds on delivery of 134,8 - 134,8
shares by share trust
---------- ---------- ----------
Equity at 31 March 2011 5 462,9 485,6 5 948,5
Profit for the period 699,0 48,2 747,2
OTHER COMPREHENSIVE INCOME
Movement in effective portion 82,2 - 82,2
of changes in fair value of
cash flow hedges
Foreign currency translation 5,7 - 5,7
reserve movements
Movement in insurance cell 0,1 - 0,1
reserves
Deferred tax on movement in (26,9) - (26,9)
effective portion of cash
flow hedges
---------- ---------- ----------
Total comprehensive income 760,1 48,2 808,3
for the half-year
CONTRIBUTIONS BY AND
DISTRIBUTIONS TO OWNERS
Share-based payments reserve 39,9 - 39,9
movements
Dividends paid (435,4) (20,4) (455,8)
Shares purchased in terms of (76,6) - (76,6)
share incentive schemes
Proceeds on delivery of 12,1 - 12,1
shares by share trust
---------- ---------- ----------
Equity at 30 September 2011 5 763,0 513,4 6 276,4
========== ========== ==========
6 months 6 months Year ended
ended ended
30.09.2011 30.09.2010 31.03.2011
Unaudited Unaudited Audited
DIVIDEND PER ORDINARY SHARE
(CENTS)
Interim 190,0 138,0 138,0
Final - - 212,0
------ ------ ------
Total 190,0 138,0 350,0
------ ------ ------
Dividend cover 1,8 2,0 1,8
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
6 months 6 months Year ended
ended ended
30.09.2011 30.09.2010 31.03.2011
Unaudited Unaudited Audited
Rm Rm Rm
CASH FLOWS FROM OPERATING
ACTIVITIES
Operating profit before 1 441,2 1 145,7 2 630,3
working capital changes (note
11)
Increase in working capital (569,3) (17,5) (824,1)
---------- ---------- ----------
Cash generated by operations 871,9 1 128,2 1 806,2
Interest income 7,3 6,7 16,8
Finance cost (137,1) (122,0) (250,1)
Taxation paid (344,6) (365,8) (769,0)
Dividend income 5,7 6,3 12,1
Dividends paid (455,8) (366,0) (665,9)
---------- ---------- ----------
Net cash (outflows) inflows (52,6) 287,4 150,1
from operating activities
---------- ---------- ----------
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchase of property, plant (275,7) (148,4) (382,8)
and equipment
Proceeds from sale of 4,3 3,2 7,5
property, plant and equipment
Decrease in participation in 5,8 3,3 6,1
export partnerships
Decrease in staff housing 0,1 - 0,2
loans
---------- ---------- ----------
Net cash outflows from (265,5) (141,9) (369,0)
investing activities
---------- ---------- ----------
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds on delivery of 12,1 - 134,8
shares by share trust
Shares purchased in terms of (76,6) (297,8) (453,8)
share incentive schemes
Increase (decrease) in non- 70,1 (358,0) (334,0)
controlling interest loans
Increase in RCS Group 592,0 319,9 535,9
external funding
(Decrease) increase in (149,4) 203,3 390,5
interest-bearing debt
---------- ---------- ----------
Net cash inflows (outflows) 448,2 (132,6) 273,4
from financing activities
---------- ---------- ----------
Net increase in cash during 130,1 12,9 54,5
the period
Cash at the beginning of the 338,5 284,0 284,0
period
---------- ---------- ----------
Cash at the end of the period 468,6 296,9 338,5
========== ========== ==========
NOTES
1. The unaudited interim condensed consolidated results for the half-
year ended 30 September 2011 have been prepared in accordance with the
presentation and disclosure requirements of the South African Companies
Act (No 71 of 2008, as amended), and IAS 34 Interim Financial Reporting,
using the group`s accounting policies, that are in line with the
measurement and recognition principles of International Financial
Reporting Standards (IFRS)and the AC 500 Standards as issued by the
Accounting Practices Board or its successor and have been consistently
applied to prior periods except as described in note 2.
2. During the period the group adopted the following revised accounting
standards:
-IFRS 7 Financial Instruments: Disclosures (amendments resulting from
May 2010 Annual Improvements to IFRS)
- IAS 1 Presentation of Financial Statements (amendments resulting from
May 2010 Annual Improvements to IFRS)
- IAS 24 Related Party Disclosures (revised definition of related
parties)
- IAS 34 Interim Financial reporting (amendments resulting from May 2010
Annual Improvements to IFRS)
The adoption of these standards has had no significant effect on these
results.
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.
4. Included in share capital are 24,0(September 2010: 24,0) million
shares which are owned by a subsidiary of the company, and
11,8(September 2010: 11,8) million shares which are owned by the share
incentive trust. These have been eliminated on consolidation.
Sept. 2011 Sept. 2010 March 2011
Unaudited Unaudited Audited
Rm Rm Rm
5. REVENUE
Retail turnover 5 428,3 4 581,6 9 936,5
Interest income (refer note 813,0 736,3 1 486,2
7)
Dividend income - retail 5,7 6,3 12,1
Other revenue (refer note 8) 568,1 434,7 935,8
------- ------- --------
6 815,1 5 758,9 12 370,6
======= ======= ========
6. COST OF TURNOVER
Cost of goods sold (2 893,7) (2 466,3) (5 239,7)
Costs of purchase, conversion (262,3) (207,7) (528,4)
and other costs
-------- -------- --------
(3 156,0) (2 674,0) (5 768,1)
======== ======== ========
7. INTEREST INCOME
Trade receivables - retail 405,5 344,4 705,2
Receivables - RCS Group 400,2 385,2 764,2
Sundry 7,3 6,7 16,8
------- ------- -------
813,0 736,3 1 486,2
======= ======= =======
8. OTHER REVENUE
Merchants` commission - RCS 17,1 15,1 30,9
Group
Club income - retail 148,6 119,7 248,6
Club income - RCS Group 2,3 2,5 4,9
Customer charges income - 62,1 21,8 55,7
retail
Customer charges income - RCS 138,5 114,5 249,4
Group
Insurance income - retail 116,4 90,1 203,2
Insurance income - RCS Group 53,9 45,3 90,8
Cellular income - one2one 26,7 23,6 47,5
airtime product
Sundry income - retail 2,5 2,1 4,8
------- ------- -------
568,1 434,7 935,8
======= ======= =======
9. TRADING EXPENSES
Depreciation: land and (3,3) (3,2) (6,4)
buildings
Depreciation: shopfitting, (146,3) (133,7) (275,9)
vehicles, computers and
furniture and fittings
Amortisation (0,2) (0,2) (0,4)
Goodwill impairment - - (5,8)
Employee costs: normal (865,2) (742,0) (1 600,2)
Employee costs: share-based (39,9) (19,0) (55,9)
payments
Occupancy costs: normal (494,2) (434,8) (912,7)
Occupancy costs: operating (14,2) (4,2) (9,2)
lease liability adjustment
Net bad debt (345,4) (323,9) (632,8)
Other operating costs (506,4) (416,0) (802,0)
---------- ---------- ----------
(2 415,1) (2 077,0) (4 301,3)
========== ========== ==========
10. INVENTORY
Merchandise 1 692,7 1 310,6 1 678,8
Raw materials 75,1 60,4 82,3
Goods in transit 54,5 12,3 22,5
Shopfitting stock 17,7 19,9 17,1
Consumables 3,3 4,2 4,0
---------- ---------- ----------
1 843,3 1 407,4 1 804,7
========== ========== ==========
11. OPERATING PROFIT BEFORE
WORKING CAPITAL CHANGES
Profit before tax 1 106,9 885,9 2 051,1
Finance cost 137,1 122,0 250,1
---------- ---------- ----------
Operating profit before 1 244,0 1 007,9 2 301,2
finance charges
Interest income - sundry (7,3) (6,7) (16,8)
Dividend income (5,7) (6,3) (12,1)
Non-cash items 210,2 150,8 358,0
---------- ---------- ----------
Operating profit before 1 441,2 1 145,7 2 630,3
working capital changes
========== ========== ==========
12. RECONCILIATION OF PROFIT FOR THE PERIOD
TO HEADLINE EARNINGS
Profit for the period 699,0 566,3 1 301,8
attributable to equity holders
of The Foschini Group Limited
Adjusted for the after-tax
effect of:
Goodwill impairment - - 5,8
Less: non-controlling interest - - (2,6)
-------- -------- --------
Goodwill impairment - - - 3,2
effective portion
Profit on disposal of (0,2) (0,4) (0,2)
property, plant and equipment
Loss on disposal of property, 0,7 0,4 0,8
plant and equipment
-------- -------- --------
Headline earnings 699,5 566,3 1 305,6
======== ======== ========
13. CONTINGENT LIABILITIES
The Foschini Group has provided RCS Group with a liquidity facility of
R603,9 million in respect of their DMTN programme. This facility was
R101,75 million at March 2011.
14. RELATED PARTIES
Related party transactions similar to those disclosed in the group`s
annual financial statements for the year ended 31 March 2011 took place
during the period.
GROUP SEGMENTAL ANALYSIS
Retail TFG Central Total RCS Group
trading Financial and retail
divisions Services shared
services
6 months ended Unaudited Unaudited Unaudited Unaudited Unaudited
30.09.2011
Rm Rm Rm Rm Rm
External 5 428,3 327,1 34,9 5 790,3 211,8
revenue
External - 405,5 4,2 409,7 403,3
interest
income
--------- --------- -------- -------- --------
Total revenue* 5 428,3 732,6 39,1 6 200,0 615,1
======== ======== ======== ======== ========
Inter-segment - - 37,9 37,9 4,5
revenue
External - - (52,5) (52,5) (84,6)
finance cost
Depreciation - - (142,2) (142,2) (7,6)
and
amortisation
======== ======== ======== ======== ========
Segmental 1 178,8 213,6 (355,8) 1 036,6 151,9
profit before
tax
Other material
non-cash items
Foreign (27,5) -
exchange
transactions
Share-based (39,9) -
payments
Operating (14,2) -
lease
liability
adjustment
------- -------
Group profit 955,0 151,9
before tax
Capital 263,0 12,7
expenditure
Segment assets 8 231,9 3 397,8
Segment 3 029,9 2 323,4
liabilities
Retail TFG Central Total RCS Group
trading Financial and Retail
divisions Services shared
services
6 months ended Unaudited Unaudited Unaudited Unaudited Unaudited
30.09.2010
Rm Rm Rm Rm Rm
External 4 581,6 231,6 32,0 4 845,2 177,4
revenue#
External - 344,4 4,2 348,6 387,7
interest
income
--------- --------- -------- -------- --------
Total revenue* 4 581,6 576,0 36,2 5 193,8 565,1
======== ======== ======== ======== ========
Inter-segment - - 35,7 35,7 5,5
revenue
External - - (68,1) (68,1) (53,9)
finance cost
Depreciation - - (130,2) (130,2) (6,9)
and
amortisation
======== ======== ======== ======== ========
Segmental 905,9 176,0 (297,6) 784,3 121,8
profit before
tax#
Other material
non-cash items
Foreign 3,0 -
exchange
transactions
Share-based (19,0) -
payments
Operating (4,2) -
lease
liability
adjustment
------- -------
Group profit 764,1 121,8
before tax
Capital 144,5 3,9
expenditure
Segment assets 6 548,2 2 932,8
Segment 2 109,4 1 934,7
liabilities
Retail TFG Central Total RCS Group
trading Financial and Retail
divisions Services shared
services
Year ended Audited Audited Audited Audited Audited
31.03.2011
Rm Rm Rm Rm Rm
External 9 936,5 507,5 64,4 10 508,4 376,0
revenue#
External - 705,2 8,9 714,1 772,1
interest
income
--------- --------- -------- -------- --------
Total revenue* 9 936,5 1 212,7 73,3 11 222,5 1 148,1
======== ======== ======== ======== ========
Inter-segment - - 95,5 95,5 11,2
revenue
External - - (138,7) (138,7) (111,4)
finance cost
Depreciation - - (268,7) (268,7) (14,0)
and
amortisation
======== ======== ======== ======== ========
Segmental 2 192,5 311,7 (664,9) 1 839,3 281,4
profit before
tax
Other material
non-cash items
Goodwill - (5,8)
impairment
Foreign exchange 1,3 -
transactions
Share-based payments (55,9) -
Operating lease liability (9,2) -
adjustment
------- -------
Group profit before tax 1 775,5 275,6
Capital expenditure 367,4 15,4
Segment assets 7 599,3 3 103,2
Segment liabilities 2 675,8 2 078,2
Consolidated Consolidated Consolidated
6 months 6 months Year ended
ended ended
30.09.2011 30.09.2010 31.03.2011
Unaudited Unaudited Audited
Rm Rm Rm
External revenue 6 002,1 5 022,6 10 884,4
External interest income 813,0 736,3 1 486,2
--------- --------- --------
Total revenue* 6 815,1 5 758,9 12 370,6
======== ======== ========
Inter-segment revenue 42,4 41,2 106,7
External finance cost (137,1) (122,0) (250,1)
Depreciation and (149,8) (137,1) (282,7)
amortisation
======== ======== ========
Segmental profit before tax 1 188,5 906,1 2 120,7
Other material non-cash
items
Goodwill impairment - - (5,8)
Foreign exchange (27,5) 3,0 1,3
transactions
Share-based payments (39,9) (19,0) (55,9)
Operating lease liability (14,2) (4,2) (9,2)
adjustment
------- ------- -------
Group profit before tax 1 106,9 885,9 2 051,1
Capital expenditure 275,7 148,4 382,8
Segment assets 11 629,7 9 481,0 10 702,5
Segment liabilities 5 353,3 4 044,1 4 754,0
* includes retail turnover, interest income, dividend income and other
income
# September 2011 reflects a change in the reportable segments as defined
by the board, being the chief operating decision-maker. The March 2011
and September 2010 comparatives have been restated accordingly.
COMMENTARY
GROUP OVERVIEW
Improved consumer spending which became evident to us last year and more
particularly in the second half of last year has continued into the
first half of this financial year. This, together with the strategic
initiatives undertaken by our group has produced a pleasing result for
the first half of this year.
Notwithstanding the inflated turnover figures in last year`s base as a
result of the 2010 FIFA World CupTrade Mark, retail turnover increased
by 18,5% to R5,4 billion whilst profit before tax increased by 24,9%.
Headline earnings per share increased by 25,6% to 341,9 cents, whilst
diluted headline earnings per share increased by 24,1% to 333,3 cents.
In line with our strategy of driving top line growth, buying
efficiencies achieved during the period were passed on to our customers
resulting in the gross margin being marginally up on the previous
period. These efficiencies were achieved as a result of our supply
chain initiatives.
The group`s operating margin for the period increased to 22,9% from
22,0%.
At 31 March 2011 the dividend cover was changed from 2 times to 1,8
times and consistent with that, the interim dividend has increased by
37,7% to 190,0 cents per share.
Supporting our strategy of investing for the longer term, the group
continued to grow trading space in certain of our formats and 71 stores
were opened during the period, an increase in trading area of 3,6%
during the period. Space growth for the full financial year is expected
to be around 7%.
MERCHANDISE CATEGORIES
Total sales have grown by 18,5% over the previous period with growths in
the various merchandise categories as follows:
- Clothing 19,9%
- Jewellery 7,4%
- Cosmetics 11,1%
- Homewares 15,5%
- Cellphones 29,4%
All merchandise categories continue to perform well, and we have gained
market share in all categories, particularly our largest product
category, clothing. Jewellery, being a more discretionary commodity has
traded satisfactorily taking into account the substantial increase in
the gold price.
TRADING DIVISIONS
Retail turnover and growths in the various trading divisions were as
follows:
Number of Retail % change
stores turnover Rm
@home 84 350,3 15,5
Exact 210 533,6 25,3
Foschini division 500 2 067,1 18,4
Jewellery division 389 592,4 10,3
Markham 256 920,2 22,7
TFG Sports 350 964,7 17,8
-------- -------- --------
Total 1 789 5 428,3 18,5
-------- -------- --------
Same store turnover grew by 12,1% whilst product inflation averaged
approximately 5% for the period. Credit sales as a percentage of total
sales increased to 63,1% from 61,8%.
@home increased its store base by 1 store and is now trading out of 84
stores, 13 of which are the larger @homelivingspace stores. Turnover
grew by 15,5% to R350,3 million. With the rate of new store openings
having declined, greater focus is being placed on merchandise
efficiencies. Same store turnover growth was 11,6%.
Exact increased its store base by 2 stores during the period to 210
stores. The focus on clothing price points has continued to be very
successful. Clothing turnover increased by 27,4% with clothing same
store turnover growth of 23,4%. Cellphone turnover increased by 14,5%.
Total same store turnover increased by 21,4%.
The Foschini division comprising Foschini, Donna-Claire, Fashion Express
and Luella increased its store base by 16 stores to 500 stores during
the period with turnover of R2 067,1 million. Clothing turnover grew
by 20,6% with clothing same store turnover growth of 14,4%. Cosmetics
same store turnover grew by 6,4%. Same store turnover of cellphones
increased by 12,7% whilst total same store turnover increased by 12,5%.
The jewellery division comprising American Swiss Jewellers, Sterns and
Matrix increased its store base during the period by 8 stores to 389
stores with turnover of R592,4 million. Trading was satisfactory with
jewellery merchandise turnover increasing by 7,8% and cellphone turnover
increasing by 24,6%. Jewellery same store turnover grew by 1,8% and
total same store turnover increased by 4,5%.
The Markham division increased its store base by 9 stores during the
period to 256 stores. Clothing turnover growth for the period was 22,3%
whilst cellphone turnover increased by 25,0%. Clothing same store
turnover for the period grew by 16,5% whilst cellphone same store
turnover increased by 18,9%. Total same store turnover increased by
16,9%.
TFG Sports division, trading as Totalsports, Sportscene and Duesouth,
grew its clothing turnover by 13,7%, notwithstanding the 2010 FIFA World
CupTrade Mark inflated base. It increased its store base by 26 stores
to 350 stores. Same store turnover grew by 7,3%. Excluding the World
Cup months of May and June, same store clothing turnover growth was
15,9%. During the period this division introduced cellphones into its
product offering.
TFG Financial Services` retail debtors` book, which amounts to R4,2
billion, increased by 8,7% since the year-end reflecting the impact of
good account growth, increased credit sales and the increase in the
number of 12-month accounts. With the increase in new active accounts,
there is an inherently greater risk of bad debt than from established
accounts. Bad debt as a percentage of closing debtors` book was 9,3%.
RCS GROUP
The RCS Group is an operationally independent consumer finance business
that provides a broad range of financial services under its own brand in
South Africa, Namibia and Botswana. It is structured into two operating
business units, namely transactional finance and fixed term finance.
The transactional finance business comprises the RCS general-purpose
card and other private label card programmes, whilst the fixed term
finance business comprises RCS personal loans.
Despite interest margin compression arising from the interest-capping
formula under the National Credit Act, the RCS Group performed well
during the period with net profit before tax increasing by 24,7% to
R151,9 million. Net bad debt further improved with a reduction of 25,5%
compared to the previous period. Its debtors` book of R3,1 billion
increased by 8,5% during the period.
Its Domestic Medium-Term Note (DMTN) programme continues to be
successfully implemented with over R1,5 billion of funding being raised
in a mixture of long- and short term paper. The RCS Group now has
surplus funding of approximately R1 billion which is available to
support its future growth.
Our group`s shareholding in RCS Group is 55% with the balance being held
by The Standard Bank of South Africa Limited.
NEW BRANDS
During the period our group entered into a franchise agreement with an
exciting footwear and accessory international brand, Charles & Keith.
Charles & Keith is a fashion-forward ladies footwear and accessories
brand that has international presence with over 200 stores in 28
countries. Our first store which opened in Canal Walk, Cape Town in
August 2011 has performed better than viability and further stores will
be rolled out in the future.
Effective from 1 October 2011, our group has acquired the luxury
menswear brand Fabiani which will give our group an entry into the high
end customer segment where we currently do not operate. Fabiani
currently trades out of 7 outlets and has great potential for expansion.
AFRICA EXPANSION
The group currently trades out of 70 stores outside of South Africa,
with 56 in Namibia, 6 in Botswana, 4 in Zambia and 4 in Swaziland. In
the next three years a further 57 stores are planned to be opened in the
countries where we already operate as well as Lesotho, Mozambique and
Nigeria.
PROSPECTS
For the first five weeks of the second half retail turnover has
continued to be encouraging, though some caution is warranted given the
very difficult and fragile global financial environment, as well as the
very strong comparative base. However, we remain confident that we can
again deliver a favourable result for the second half of this year. 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.
We expect to open a further 69 stores in the second half.
PREFERENCE DIVIDEND ANNOUNCEMENT
Dividend no. 150 of 3,25% (6,5 cents per share) in respect of the six
months ending 31 March 2012 has been declared, payable on Monday, 26
March 2012 to holders of 6,5% preference shares recorded in the books of
the company at the close of business on Friday, 23 March 2012.
The last day to trade ("cum" the dividend) in order to participate in
the dividend will be Thursday, 15 March 2012. The Foschini Group Limited
preference shares will commence trading "ex" the dividend from the
commencement of business on Friday, 16 March 2012 and the record date,
as indicated, will be Friday, 23 March 2012.
Preference shareholders should take note that share certificates may not
be dematerialised or rematerialised during the period Friday, 16 March
2012 to Friday, 23 March 2012, both dates inclusive.
INTERIM ORDINARY DIVIDEND ANNOUNCEMENT
The directors have declared an interim ordinary dividend of 190,0 cents
per ordinary share, for the period ending 30 September 2011, payable on
Monday, 9 January 2012 to ordinary shareholders recorded in the books of
the company at the close of business on Friday, 6 January 2012.
The last day to trade ("cum" the dividend) in order to participate in
the dividend will be Thursday, 29 December 2011. The Foschini Group
Limited ordinary shares will commence trading "ex" the dividend from the
commencement of business on Friday, 30 December 2011 and the record
date, as indicated, will be Friday, 6 January 2012.
Ordinary shareholders should take note that share certificates may not
be dematerialised or rematerialised during the period Friday, 30
December 2011 to Friday, 6 January 2012, both dates inclusive.
Certificated ordinary shareholders are reminded that all entitlements to
dividends with a value less than R5,00 per certificated shareholder will
be aggregated and the proceeds donated to a registered charity of the
directors` choice, in terms of the articles of association of the
company.
-------------------------------------------------------------------
Signed on behalf of the Board
D M Nurek, Chairman A D Murray, CEO
Cape Town
3 November 2011
Non-executive directors:
D M Nurek (Chairman), Prof F Abrahams, S E Abrahams, W V Cuba, K N
Dhlomo, M Lewis, E Oblowitz, D M Polak, N V Simamane
Executive directors:
A D Murray, R Stein, P S Meiring
Company secretary:
D Sheard
Registered office:
Stanley Lewis Centre, 340 Voortrekker Road, Parow East, 7500
Transfer secretaries:
Computershare Investor Services (Pty) Ltd, Ground Floor, 70 Marshall
Street, Johannesburg, 2001
Sponsor:
UBS South Africa (Pty) Ltd
Date:
3 November 2011
Visit our website at http://www.tfg.co.za/
Date: 03/11/2011 14:00:01 Produced by the JSE SENS Department.
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