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Condensed consolidated financial statements for the year ended 31 March 2024, ordinary and preference share dividend
THE FOSCHINI GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1937/009504/06)
Ordinary share code: TFG
ISIN: ZAE000148466
Preference share code: TFGP
ISIN: ZAE000148516
("TFG" or "the Company" and together with its affiliates "the Group")
Condensed consolidated financial statements for the year ended 31 March 2024,
ordinary and preference share dividend declarations
SALIENT FEATURES
- Revenue up 8,9% to a record R60,1 billion;
- Retail turnover up 8,6% to R56,2 billion;
- TFG Africa retail turnover up 10,4%, with year-long market share gains
across all major merchandise categories;
- Online retail turnover up 22,0% to R5,6 billion, contributing 9,9% to
total retail turnover, the growth largely attributable to strong online
retail turnover growth in South Africa via our Bash platform;
- Strong cash retail turnover growth of 9,9%, contributing 82,3% to total
retail turnover;
- Gross profit up 8,6% to a record R27,0 billion;
- TFG Africa gross margin of 41,1%, fully recovered in H2'2024 after
clearance activity in H1'2024;
- Operating profit before finance costs up 9,9% to a record R5,9 billion;
- Headline earnings up 0,8% to R3,1 billion;
- Basic earnings per share (EPS) down 0,4% to 934,7 cents (FY2023: 938,5
cents);
- Headline earnings per share (HEPS) up 0,2% to 970,7 cents (FY2023:
968,9 cents);
- Cash generated from operations up 76,5% to R12,5 billion, used to fund
growth, acquisitions, dividends and repay debt; and
- Final dividend declared of 200,0 cents per share (March 2023: 150,0
cents per share), an increase of 33,3%.
EFFECTIVE INVENTORY MANAGEMENT AND COST CONTROL SUPPORTS SOLID PERFORMANCE
The Group delivered solid results for the year ended 31 March 2024 ("FY2024"
or "current period") despite tough trading conditions and significant
headwinds. Our results reflect two distinct halves, influenced by various
macro-economic factors in all three territories that affected customers and,
consequently, our performance.
Retail turnover grew by 8,6%, supported by the expansion of our footprint
and brand portfolio, and further growth in online retail turnover in South
Africa via our Bash platform.
The strong trading performance and sustained gross profit margins, along
with our continued focus on resetting the cost base, enabled growth of 9,9%
in operating profit before finance costs, which pleasingly was ahead of
retail turnover growth. Despite increased finance costs and a higher
effective tax rate, the Group's strong H2'2024 supported HEPS growth of 0,2%.
GROUP FINANCIAL PERFORMANCE
Group retail turnover growth (in ZAR) in each business segment was as follows:
FY2024
Contribution
H1'2024 H2'2024 to Group
vs vs FY2024 vs retail
Business segment H1'2023 H2'2023 FY2023 turnover
TFG Africa (ZAR'm) 17,3% 5,1% 10,4% 69,7%
TFG London (ZAR'm) 6,3% 14,6% 10,4% 13,6%
TFG Australia (ZAR'm) 0,7% 0,0% 0,3% 16,7%
Group (ZAR'm)* 12,4% 5,4% 8,6%
* Non comparable growth resulting from the acquisition of Tapestry Home
Brands in the prior year. Excluding the acquisition, retail turnover grew by
6,9%^ for the full year.
Cash retail turnover increased by 9,9% compared to the prior period and now
contributes 82,3% to total Group retail turnover.
Online retail turnover increased by 22,0% and now contributes 9,9% to total
Group retail turnover.
The Group maintained its gross margin percentage and increased gross profit
by 8,6% to a record R27,0 billion in line with the growth in retail turnover.
Trading expenses were tightly controlled, increasing 9,3% due to 272 new
stores, the annualisation of the Tapestry acquisition, and strategic
investments in online and manufacturing in TFG Africa.
Finance costs for the period increased to R1,8 billion driven by higher
average interest rates in South Africa and the UK, and the annualisation of
the impact on net debt resulting from the acquisition of Tapestry.
HEPS increased by 0,2% and Basic EPS decreased by 0,4%.
STATEMENT OF FINANCIAL POSITION
Group inventories were 11,6% lower than the elevated position in the prior
year brought about by load shedding in South Africa, as well as the post
COVID-19 normalisation in trading conditions in other territories.
The Group generated cash from operations of R12,5 billion for the year
(FY2023: R7,1 billion), delivered through a robust trading performance and
continued effective management of working capital.
The Group's pre-IFRS 16 net debt^ declined by 31,3% to R4,9 billion,
reflecting the improved working capital position.
STORE PORTFOLIO
At 31 March 2024, the Group traded out of 4 766 stores across 23 countries,
with 272 new stores opening during the year, while 203 stores were closed,
including 54 concessions in TFG London.
TFG
Stores TFG Africa TFG London Australia Group
Opening balance at 1 April 2023 3 524 589 584 4 697
New stores 212 33 27 272
Closed stores (115) (75) (13) (203)
Closing balance at 31 March 2024 3 621 547 598 4 766
SEGMENTAL PERFORMANCE UPDATE
TFG AFRICA
Retail turnover growth of 10,4% was driven largely by Clothing, with a
particularly strong performance in Sport and Womenswear as well as in
Homeware. Trading densities in TFG Africa also grew by 10,0%. Port delays
impacted imports, but our local manufacturing capability mitigated the worst
impact. Load shedding continues to impact trade with c.393 000 lost trading
hours during FY2024.
TFG Africa's retail turnover growth (in ZAR) per merchandise category was as
follows:
FY2024
H1'2024 vs H2'2024 vs FY2024 vs Contribution to
Merchandise H1'2023 H2'2023 FY2023 TFG Africa
category retail turnover
Clothing 14,1% 6,2% 9,7% 72,5%
Homeware 62,8% 4,2% 25,0% 13,6%
Cosmetics 4,5% 4,9% 4,7% 2,6%
Jewellery 1,8% -0,1% 0,7% 3,7%
Cellphones 5,1% -0,3% 2,3% 7,6%
Total TFG Africa* 17,3% 5,1% 10,4%
* Non comparable growth resulting from the acquisition of Tapestry Home
Brands in the prior year. Excluding the acquisition, retail turnover grew by
7,9%^ for the full year.
Cash retail turnover (74,6% of total) grew by 13,3%.
Store retail turnover continued to see strong growth up 9,3%. Following our
continued investment in our e-commerce platform, Bash, online retail turnover
grew 44,4% and now contributes 4,2% to retail turnover.
Gross profit margins recovered strongly in the second half of the year after
the significant inventory clearance activity in H1'2024 necessitated by the
impact of load shedding at the beginning of 2023. The improved stock position
was maintained through to the year end.
Gross profit increased 10,6% to R16,1 billion (FY2023: R14,5 billion).
CREDIT – TFG AFRICA
Credit retail turnover grew by 2,8% and credit sales contributed 25,4%
(FY2023: 27,3%) to total TFG Africa retail turnover.
The debtors' book grew by 7,5% to R8,3 billion. Acceptance rates for new
accounts remained conservative at 17,7% (FY2023: 19,0%) and the provision
for impairment decreased to 18,7% (FY2023: 20,0%).
ACQUISITION OF STREET FEVER
The Group acquired Street Fever, an independent retailer of affordable
branded footwear and apparel, with effect from 26 April 2023. The integration
of the 91 Street Fever stores into Sneaker Factory has allowed us to quickly
scale this business to 213 stores.
TFG LONDON
With inflation and interest rates still elevated, the UK consumer remains
under pressure, which resulted in a decline in retail turnover of 4,2% (GBP)
off a high, post-COVID-19 recovery base.
Store retail turnover declined 6,6%, whilst online retail turnover declined
0,8%, now contributing 42,7% (FY2023: 41,2%) to TFG London's retail turnover.
TFG London maintained gross profit margins through careful inventory
management and an increase in own-channel mix, growing gross profit by 1,4%
compared to the prior period.
TFG London continued to manage the cost base which helped limit the decline
in operating profit before finance costs to 5,3%. TFG London delivered the
second highest operating profit before finance costs in its history.
From 1 April 2023, the corporate tax rate in the UK increased from 19% to
25%.
TFG AUSTRALIA
As with the UK, higher inflation and interest rates meant that consumers in
Australia remain under pressure, impacting consumer confidence and demand.
TFG Australia's performance is also set against a strong post-COVID-19
recovery base. Consequently, retail turnover was 5,6% (AUD) lower.
Store retail turnover declined 6,5%, whilst online retail turnover grew 7,5%,
now contributing 7,3% to TFG Australia's retail turnover.
Gross profit margin remained strong, but the impact of inflation on the cost
base contributed to the decline in operating profit before finance costs of
28,9%. TFG Australia still delivered the second highest operating profit
before finance costs in its history.
SUPERVISORY BOARD UPDATES
As was announced on SENS on 7 July 2023, Mr Jan Potgieter was appointed as
an independent non-executive director of the Board and member of the Audit
and Risk Committees with effect from 10 July 2023, and Mr Nkululeko Sowazi
was appointed as an independent non-executive director of the Board with
effect from 1 January 2024.
As was announced on SENS on 13 October 2023, Ms Bongiwe Ntuli resigned as
Chief Financial Officer as well as executive director of the Company.
Following the confirmation from the JSE Limited, Mr Anthony Thunström
fulfilled the role of both Chief Executive Officer and executive financial
director for the period 1 December 2023 until the appointment of the new
Chief Financial Officer.
As was announced on SENS on 28 March 2024, Mr Ralph Buddle was appointed as
Chief Financial Officer and executive director with effect from 1 April 2024.
Mr Buddle was also appointed as a member of the Risk Committee with effect
from 1 April 2024.
OUTLOOK
The outlook remains cautious due to continued challenging macro conditions
across all territories. As such, we have strengthened our balance sheet by
reducing our stock holdings and decreasing our net debt.
The Group continues to invest in its key strategic initiatives to further
strengthen its differentiated business model. Notably, the construction of
our Riverfields Distribution Centre was completed during the year within
budget and ahead of schedule. We are moving each of our apparel retail brands
into this facility as part of a phased plan to mitigate any risks.
We have made good progress in the execution of our strategy and we remain
confident in our ability to grow our businesses. With our robust balance
sheet and diversified business model, the Group is well-positioned to capture
additional market share from competitors.
As a Group, we continue to seek out strategic adjacencies and high-quality
acquisitions.
Any forecast financial information contained herein has not been reviewed or
reported on by the Group's external auditors.
^ Non-IFRS measures in respect of Group and TFG Africa retail turnover
excluding Tapestry and Pre-IFRS 16 net debt – refer to note 18 of the full
reviewed condensed consolidated financial statements for the year ended 31
March 2024.
FINAL ORDINARY CASH DIVIDEND DECLARATION
Notice is hereby given that the directors have declared a final gross cash
dividend of 200,0 cents (160,00000 cents net of dividend withholding tax)
per ordinary share for the six-month period ended 31 March 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 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, 7 June 2024
Last day of trade to receive a dividend Tuesday, 16 July 2024
Shares commence trading "ex" dividend Wednesday, 17 July 2024
Record date Friday, 19 July 2024
Payment date Monday, 22 July 2024
Share certificates may not be dematerialised or rematerialised between
Wednesday, 17 July 2024 and Friday, 19 July 2024, both days inclusive.
PREFERENCE DIVIDEND DECLARATION
Notice is hereby given that the directors have declared a gross preference
dividend (no. 175) of 3,25% or 6,5 cents per share (5,20000 cents net of
dividend withholding tax) per preference share for six-month period ending
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 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, 7 June 2024
Last day of trade to receive a dividend Tuesday, 10 September 2024
Shares commence trading "ex" dividend Wednesday, 11 September 2024
Record date Friday, 13 September 2024
Payment date Monday, 16 September 2024
Share certificates may not be dematerialised or rematerialised between
Wednesday, 11 September 2024 and Friday, 13 September 2024, both days
inclusive.
RESULTS PRESENTATION WEBCAST
A live webcast of the results presentation will be broadcast at 10:00 am
(SAST) on Friday, 7 June 2024. A registration link for the webcast will be
available on the Company's website at www.tfglimited.co.za. The slides for
the annual 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.
Signed on behalf of the Supervisory Board.
M Lewis A E Thunström
Chairman Chief Executive Officer
Cape Town
6 June 2024
Date of release on SENS: 7 June 2024
ABOUT THIS ANNOUNCEMENT
This results announcement is the responsibility of the Company's directors
and is only a summary of the information contained in the full reviewed
condensed consolidated financial statements for the year ended 31 March 2024
("FY2024 results"). The FY2024 results were approved by the Board of
Directors on 6 June 2024 and the information in this announcement has been
correctly extracted from the FY2024 results. As this announcement does not
contain full details, any investment decisions by investors and/or
shareholders should be based on consideration of the FY2024 results, which
are available through the JSE cloudlink:
https://senspdf.jse.co.za/documents/2024/JSE/ISSE/TFG/FY2024.pdf and on the
Company's website at https://tfglimited.co.za/investor-
information/financial-reports-and-presentations/.
This announcement has not been reviewed or reported on by the Group's external
auditors. The Group's auditors, Deloitte & Touche, have reviewed the FY2024
results and expressed an unmodified review conclusion thereon.
DIRECTORATE AND STATUTORY INFORMATION
Non-executive Directors:
M Lewis (Chairman), Prof. F Abrahams, C Coleman, G H Davin, D Friedland, B
L M Makgabo-Fiskerstrand, A D Murray, E Oblowitz, J N Potgieter, N V Simamane,
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)
Date: 07-06-2024 09:00:00
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