Johannesburg – Fashion retailer Foschini [JSE: TFG] is relying on Christmas trading to boost it’s full-year performance, as its bottom line remained flat for its half-year results.
The group released its interim results for the period ended September 30 on Thursday. Its revenue was up 9.2% to R12.5bn. Its bottom line was slightly down to R1.041bn compared to R1.042bn reported last year. The group declared a dividend of 325c, up 1.6% from the previous year.
The group had to contend with difficult “political and economic ” conditions in South Africa and the United Kingdom, two of the three major economies in which it operates. The third is Australia.
“As always, the group is heavily dependent on Christmas trading which will largely determine our performance for the full year,” the group said in a note to shareholders.
During the period, the group through its wholly-owned subsidiary TFG Retailers in Australia, acquired the Retail Apparel Group (RAG). The agreement came into effect on July 24. The group’s acquisition of 14 G-Star RAW franchise stores in Australia, came into effect on April 3.
The group opened a total of 144 outlets in the period, 74 in TFG Africa, 46 in TFG London and 24 in TFG Australia. A total of 77 underperforming outlets were closed, 30 in TFG Africa, 39 in TFG London and 8 in TFG Australia. There were a total of 3 809 outlets in 32 countries as at the end of September.
The roll-out of its e-commerce offering continued with the launch of @homelivingspace and Exact, and it now has 17 brands trading online. “E-commerce remains a key strategic focus area for the group,” the report read.
During the period its cash turnover grew by 11.1%. Total cash turnover contributed 62.5% to total group turnover. Its credit turnover grew 6.2%, higher than growth of 1.4% reported in the previous period. Trading expenses increased 12.3%.
Earlier this year the National Credit Regulator (NCR) referred Foschini to the National Consumer Tribunal for being in breach of the National Credit Act. Following an investigation the NCR found that Foschini charged consumers a club fee on credit agreements.
The NCR wants the tribunal to order Foschini to refund the affected consumers the club fees charged, Fin24 reported.
The group said that it has initiated legal action against the NCR and the Department of Trade and Industry (dti) on the matter. A ruling is to be made on the case which was heard in August.
Foschini also affirmed its position in supporting a social contract between South Africa and Business Leadership South Africa (BLSA), of which it is a member. The contract seeks to promote inclusive growth while eradicating corruption.
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