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Summary of the interim results for the half-year ended 30 September 2024, ordinary & preference dividend declaration
THE FOSCHINI GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1937/009504/06)
Ordinary share code: TFG
A2X share code: TFG
ISIN: ZAE000148466
Preference share code: TFGP
ISIN: ZAE000148516
("TFG" or "the Company" and together with its affiliates "the Group")
SUMMARY OF THE UNAUDITED INTERIM CONDENSED CONSOLIDATED RESULTS FOR THE HALF-
YEAR ENDED 30 SEPTEMBER 2024, ORDINARY AND PREFERENCE DIVIDENDS DECLARATIONS
SALIENT FEATURES
- Group gross profit up 2,5% to a record R12,8 billion;
- Group gross margin increased by 220 basis points, as gross margins
continued to improve across all territories;
- Sales were 0,1% lower in TFG Africa, 8,2% lower in TFG London and
2,4% lower in TFG Australia (in local currency);
- Group revenue 1,4% lower to R28,0 billion;
- Group online sales grew 9,9% to R2,8 billion, contributing 10,7% to
total retail sales; the growth largely attributable to growth of
47,9% in South Africa via our Bash platform;
- Credit sales now contribute 26,8% (H1'2024: 26,3%) to TFG Africa sales;
- Operating profit before finance costs 3,4% lower to R2,5 billion;
- Basic earnings per share (EPS) 4,8% lower at 368,3 cents (Sept 2023:
386,8 cents);
- Headline earnings per share (HEPS) 5,6% lower at 371,6 cents (Sept
2023: 393,6 cents); and
- Interim dividend declared of 160,0 cents per share (Sept 2023: 150,0
cents per share), an increase of 6,7%;
IMPROVED GROSS MARGINS AGAINST A CHALLENGING OPERATING ENVIRONMENT
GROUP FINANCIAL PERFORMANCE
Sales growth (in ZAR'm) in each business segment for the six months ended 30
September 2024 ('H1'2025' or 'current period') was as follows:
H1'2025
H1'2025 vs Contribution
H1'2024 to Group
Business segment sales
TFG Africa -0,1% 69,8%
TFG London -8,7% 13,1%
TFG Australia -4,1% 17,1%
Group -2,0%
Group sales declined by 2,0%, due to the difficult trading conditions in all
territories, and impacted by the high clearance-driven sales base in TFG
Africa in the comparative period. However, the improvement from the 3,5%
decline reported in our 21-week guidance in September 2024 highlights the
noticeable improvement in trading activity experienced in all territories
since September 2024, and through to November 2024.
Online sales grew by 9,9% and now contribute 10,7% to total Group sales.
Gross margins were a key focus in all territories and increased by an
aggregate 220 basis points to 49,5%, leading to an increase in gross profit
for the Group of 2,5% to a record R12,8 billion.
Trading expenses were also tightly controlled, increasing by 5,7% despite
stubbornly high inflation and the opening of 58 new stores during the period.
Finance costs of R0,9 billion were broadly level against the prior period.
HEPS decreased by 5,6% and Basic EPS decreased by 4,8%.
STATEMENT OF FINANCIAL POSITION
The Group balance sheet is stronger than at the same point last year, and
broadly in line with the position at the financial year ended 31 March 2024.
Inventories have ended the half year 7,5% higher, mainly driven by TFG Africa
where inventories were low going into the new financial year due to port
delays. Inventory health has also improved markedly in all territories.
The Group's net debt^ position (excluding IFRS 16 liabilities) declined 2,3%
to R7,6 billion compared to 30 September 2023.
STORE PORTFOLIO
At 30 September 2024, the Group traded from 4 720 stores in 23 countries,
with 58 new stores opening during the current period. 104 stores were closed.
Stores TFG Africa TFG London TFG Group
Australia
Opening balance at 1 April 3 621 547 598 4 766
2024
New stores 34 14 10 58
Closed stores (45) (53) (6) (104)
Closing balance at 30 3 610 508 602 4 720
September 2024
SEGMENTAL PERFORMANCE UPDATE
TFG AFRICA
Sales growth (in ZAR) per merchandise category was as follows:
H1'2025
Contribution
H1'2025 vs. to TFG
Merchandise H1'2024 Africa sales
category
Clothing -1,0% 71,6%
Homeware 6,1% 14,5%
Cosmetics 11,6% 2,9%
Jewellery 1,1% 3,6%
Cellphones -7,1% 7,4%
Total TFG Africa -0,1%
The lower sales growth in TFG Africa must be seen against the aggressive
inventory clearance activity in the prior period. Sales growth compared to
the first 6 months of the 2023 financial year (1 April to 30 September 2022),
which removes the distorting impact of last year's clearance activity was
17,1%, i.e. an average growth rate of 8,2% p.a. over the two years.
Following our continued investment in our e-commerce platform, Bash, online
sales grew 47,9% and now contributes 5,6% (H1'2024: 3,8%) to sales.
After the significant promotional activity in H1'2024, gross margin recovered
by 270 basis points. The improved stock position was maintained with an
improvement in overall stock health with 58% of stock less than 8 weeks old,
compared to 52% at the end of the comparative period.
Gross profit increased 6,6% to a record R7,6 billion (H1'2024: R7,2 billion).
CREDIT – TFG AFRICA
Credit sales increased by 1,7% year on year for H1'2025 contributing 26,8%
(H1'2024: 26,3%) to total TFG Africa sales.
The debtors' book grew 6,0% to R8,3 billion. Acceptance rates have increased
to 20,3% (H1'2024: 17,4%) but remain conservative. The allowance for
impairment decreased to 17,8% (H1'2024: 19,3%) indicating the improved health
of the book and payment behaviour.
TFG LONDON
TFG London was significantly impacted by inventory delays due to shipping
disruptions in the Red Sea, high inflation and elevated interest rates. In
addition, weak consumer demand drove an increased promotional environment.
The 8,2% sales decline (in GBP) is mainly the result of weak concession
partner performance, with total own-store sales declining by 5,0%. Online
sales contributed 42,0% to total sales, an increase of 120 basis points
against the prior period.
The focus of TFG London's management has been on growing the direct-to-
consumer channel and the protection of gross margin, which improved by 360
basis points compared to the prior period. However, this was insufficient to
offset the lower sales activity, with gross profit (in GBP) in value terms
3,1% lower.
TFG AUSTRALIA
TFG Australia also suffered from the impact of persistently high inflation
and elevated interest rates, with consumers continuing to remain under
pressure, impacting demand. Despite a 2,4% contraction in sales (in AUD),
management's focus on inventory management ensured an improvement in gross
margin (in AUD) of 120 basis points to 65,1%.
ACQUISITION OF WHITE STUFF (UK)
Effective 25 October 2024, the Group acquired, through its UK subsidiary TFG
Brands (London) Limited ('TFG London'), 100% of the issued share capital of
White Stuff, a British fashion and lifestyle retailer, for an amount of
£51,7m.
White Stuff was founded in 1985 and specialises in unique, thoughtfully
designed clothing and accessories for women, men and children. White Stuff
has 113 stores and 46 concessions in the UK. The business also operates 6
stores and 25 concessions across Europe. The brand sells internationally via
its website and has 606 wholesale stockists (178 in the UK and Ireland and
428 internationally). Online sales currently contribute 43% of total sales.
White Stuff has a solid track record of financial performance and in the
financial year to 30 April 2024, the business achieved revenue of £154,8m
and EBITDA of £8,6m.
OUTLOOK
The Group continues to invest in its key strategic initiatives to further
strengthen its differentiated business model. We will continue to focus on
margin improvement, inventory management, cost control and ensure ongoing
realisation benefits from key strategic projects.
In South Africa, the outlook is positively buoyed by the formation of the
Government of National Unity, suspension of load shedding and establishment
of the two-pot retirement system. Sales in TFG Africa for the 5 weeks ended
2 November 2024 have been 8,3% higher.
In the UK, conditions remain tough with some positive indicators emerging
in the macro environment with lower inflation and interest rates expected.
It is expected that customers will continue to seek value, which could
drive further promotional activity. We maintain our focus on improving
gross margins. Sales in TFG London for the 5 weeks ended 2 November 2024
have been 0,3% higher.
The acquisition of White Stuff represents a significant milestone in TFG
London's medium-term strategy to add new brands to its existing portfolio.
The addition diversifies and strengthens our existing womenswear portfolio,
adding the first lifestyle brand while also bringing a well-established
menswear offer. This business has the potential for strong, sustained growth.
In Australia, early signs are that the macro conditions are improving and
remain cautiously optimistic. Sales in TFG Australia for the 5 weeks ended
2 November 2024 have been 0,1% lower.
Shareholders are advised that all the financial information contained in
this announcement, including any forecast or estimate financial information
contained herein, has not been audited, reviewed or reported on by the
Group's external auditors and is the responsibility of the board of
directors of TFG.
^ Non-IFRS measures in respect of Pre-IFRS 16 net debt – refer to note 18 of
the unaudited interim condensed consolidated results for the half-year ended
30 September 2024.
RESULTS PRESENTATION WEBCAST
A live webcast of the interim results presentation will be broadcast at
10:00 am (SAST) on Friday, 8 November 2024. A registration link for the
webcast will be available on the Company's website at www.tfglimited.co.za.
The slides for the interim results presentation will be made available on
the Company's website prior to the commencement of the webcast. A delayed
version of the webcast will be available later on the same day.
INTERIM ORDINARY CASH DIVIDEND DECLARATION
Notice is hereby given that the directors have declared an interim gross
cash dividend of 160,0 cents (128,0 cents net of dividend withholding
tax) per ordinary share for the six-month period ended 30 September 2024.
The dividend has been declared from income reserves.
A dividend withholding tax of 20% will be applicable to all shareholders
who are not exempt. The issued ordinary share capital at the declaration
date is 331 027 300 ordinary shares.
The salient dates for the dividend will be as follows:
Publication of declaration data Friday, 8 November 2024
Last day of trade to receive a dividend Monday, 30 December 2024
Shares commence trading "ex" dividend Tuesday, 31 December 2024
Record date Friday, 3 January 2025
Payment date Monday, 6 January 2025
Share certificates may not be dematerialised or rematerialised between
Tuesday, 31 December 2024 and Friday, 3 January 2025, both days inclusive.
PREFERENCE CASH DIVIDEND DECLARATION
Notice is hereby given that the directors have declared a gross preference
dividend (no. 176) of 3,25% or 6,5 cents per share (5,20 cents net of
dividend withholding tax) per preference share for the six-month period
ending 31 March 2025.
The dividend has been declared from income reserves.
A dividend withholding tax of 20% will be applicable to all shareholders
who are not exempt.
The issued preference share capital at the declaration date is 200 000
preference shares.
The salient dates for the dividend will be as follows:
Publication of declaration data Friday, 8 November 2024
Last day of trade to receive a dividend Tuesday, 4 March 2025
Shares commence trading "ex" dividend Wednesday, 5 March 2025
Record date Friday, 7 March 2025
Payment date Monday, 10 March 2025
Share certificates may not be dematerialised or rematerialised between
Wednesday, 5 March 2025 and Friday, 7 March 2025, both days inclusive.
Signed on behalf of the Supervisory Board.
M Lewis A E Thunström
Chairman Chief Executive Officer
Cape Town
8 November 2024
ABOUT THIS ANNOUNCEMENT
Statement and availability
This results announcement is only a summary of the information contained in
the full unaudited interim condensed consolidated results which were approved
by the Board of Directors on 8 November 2024. As this announcement does not
contain full details, any investment decisions by investors and/or
shareholders should be based on consideration of the unaudited interim
condensed consolidated results, which are available through the JSE
cloudlink:
https://senspdf.jse.co.za/documents/2024/JSE/ISSE/TFG/Int2024.pdf and on
the Company's website at: https://tfglimited.co.za/investor-
information/financial-reports-and-presentations/
DIRECTORATE AND STATUTORY INFORMATION
Non-executive Directors:
M Lewis (Chairman), C Coleman, G H Davin, D Friedland, B L M Makgabo-
Fiskerstrand, A D Murray, E Oblowitz, J N Potgieter, N L Sowazi, R Stein
Executive Directors:
A E Thunström, R R Buddle
Company Secretary:
D van Rooyen
Registration number:
1937/009504/06
Tax reference number:
9925/133/71/3P
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:
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Visit our website at http://www.tfglimited.co.za
Date: 08-11-2024 09:00:00
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