Wrap Text
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')
TRADING UPDATE FOR THE FIRST 23 WEEKS OF THE 2023 FINANCIAL YEAR
- Group retail turnover growth of 21,6% was delivered despite continued
pressure on consumers;
- TFG Africa generated retail turnover growth of 14,7% compared to the same
period in FY2022, underpinned by 17,3% retail turnover growth in Clothing
and 15,7% retail turnover growth in Homeware;
- The womenswear and menswear categories in TFG Africa continue to make strong
market share gains according to the RLC data. Womenswear like-for-like
retail turnover and full price retail turnover grew 21,5% and 37,5%
respectively for the 23 weeks;
- Like-for-like retail turnover growth in TFG Africa of 8,7%;
- Cash retail turnover growth for TFG Africa of 13,6% for the period
contributed 70,0% to total TFG Africa retail turnover;
- Exceptional retail turnover growth of 42,3% in TFG Australia (AUD);
- Robust TFG London performance with a pleasing 23,5% retail turnover growth
(GBP);
- Group online retail turnover growth of 5,1% for the period, contributing
9,2% to total Group retail turnover; and
- The Tapestry Home Brands ('Tapestry') acquisition was implemented with an
effective date of 1 August 2022 but has not yet been incorporated into these
results.
OPERATING CONTEXT
The Group continued its strong start to the 2023 financial year. In South Africa,
comparative performance was impacted by increased levels of load shedding in the
current year (leading to more lost trading hours) and by social unrest experienced
in the prior year. Consumer inflation reached a 13 year high of 7.8% in July 2022
which put further pressure on consumer spending. In the UK, inflation continued
to accelerate to the highest levels experienced since the early 1980s and breached
double digit levels in July 2022. While solid growth is expected in Australia as
the country recovers from strict COVID-19 lockdowns, increasing fuel and housing
costs are driving up consumer prices at record rates.
ESKOM LOAD SHEDDING
TFG Africa lost a further 80,000 trading hours during the first 23 weeks of FY2023
due to continued load shedding across all provinces in South Africa. This
represents a 59,0% increase in lost trading hours on the same period in the
previous financial year.
TFG AFRICA PERFORMANCE UPDATE
TFG Africa's retail turnover grew by 14,7% during the first 23 weeks of FY2023
compared to the same period in the previous financial year. All merchandise
categories grew retail turnover during the period including Cellphones, despite
continued supply challenges. Retail turnover growth was achieved despite the
economic challenges mentioned above, while the Group's strong localised, quick
response clothing supply chain and sourcing model continued to shield the business
from international supply chain disruptions.
TFG Africa's like-for-like retail turnover performance has been very strong with
growth of 8,7% for the first 23 weeks of FY2023.
The growth in TFG Africa's retail turnover compared to the same period in the
previous financial year in the respective merchandise categories were as follows:
Merchandise category 27 March 2023 Contribution to
to 3 September TFG Africa
2023 retail turnover
Clothing 17,3% 76,4%
Homeware 15,7% 7,4%
Cosmetics 6,8% 2,9%
Jewellery 6,2% 4,2%
Cellphones 0,8% 9,1%
Total 14,7% 100,0%
Cash retail turnover for the first 23 weeks of FY2023 grew by 13,6% compared to
the same period in FY2022 and contributed 70,0% to TFG Africa's retail turnover.
Credit retail turnover was 17,0% up on the same period in FY2022 with acceptance
rates down 2,9% to 21,1% due to prevailing economic conditions.
Online retail turnover for the first 23 weeks of FY2023 grew by 19,8% compared to
the same period in FY2022 and now contributes 3,2% to total TFG Africa turnover
(FY2022: 3,1%).
TFG LONDON PERFORMANCE UPDATE
TFG London performance was moderated by growing consumer pressure and rising
levels of inflation. Increased people mobility and a growing demand for our key
categories have supported sales in the region. The first 23 weeks of FY2023
delivered retail turnover growth of 23,5% (GBP)compared to the same period in the
previous financial year.
Store retail turnover growth was 39,6% on the same period in FY2022. Online retail
turnover from TFG London's own sites were down 0,2% (GBP) in the period, while
retail turnover via third party online channels grew by 7,6% (GBP), both off a
high base in the prior year. Online retail turnover contributed 37,0%(GBP) for
the period (FY2022: 44,2%) to TFG London's total retail turnover.
TFG AUSTRALIA PERFORMANCE UPDATE
TFG Australia continued to accelerate its performance with retail turnover growth
of 42,3% (AUD) in the first 23 weeks of FY2023. This growth is indicative of
strong demand for our products.
Online retail turnover growth for the period declined by 7,7% (AUD)compared to
the same period in FY2022 as the channel mix normalised post the prior year
lockdown. Online retail turnover contributed 6,7% (AUD)to total TFG Australia
retail turnover for the period (FY2022: 7,0%).
GROUP PERFORMANCE UPDATE
Overall, the Group delivered a very strong performance during the first 23 weeks
of FY2023 with retail turnover growth of 21,6% compared to the same period in
FY2022.
Online retail turnover performance continues to normalise with growth of 5,1% for
the first 23 weeks of FY2023 compared to the same period in FY2022. The
contribution of online retail turnover to total retail turnover for the period
was 9,2% (FY2022: 10,6%) as customers return to physical stores and become less
dependent on online shopping.
OUTLOOK
The Group continues to invest in its key strategic initiatives to further
strengthen its differentiated business model. It has made progress on its key
strategic objectives and its speciality brand business portfolio which remains
very well positioned for further organic and inorganic growth. A specific focus
will be the integration of the Tapestry business to extract the maximum value from
our investment.
Shareholders are advised that the financial information on which this trading
update is based has not been reviewed and reported on by the Company's external
auditors.
Cape Town
7 September 2022
Sponsor:
Rand Merchant Bank (A division of FirstRand Bank Limited)
Date: 07-09-2022 03:43:00
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