The Star Late Edition

TFG share price rises sharply after strong dividend payout

THE FOSCHINI Group (TFG) share price was the biggest gainer on the JSE on Friday, closing 11.3% higher after it reported a 33% uplift in its final dividend to 200 cents a share for the year to March 31.

The share prices of the two other largest clothing groups on the JSE, Mr Price and Truworths, were also top gainers on the bourse, with their share prices ending Friday 5% and 5.16% higher, respective­ly.

TFG chief executive Anthony Thunström said they had grown revenue aggressive­ly at the expense of competitor­s and had managed costs tightly.

The group has a portfolio of 34 retail brands, with more than 4 700 outlets in 23 countries on five continents, offering products including fashion and sport apparel, jewellery, cosmetics, electronic­s, homeware and furniture.

“In many cases, revenues, margins, gross profit and earnings before interest and tax (Ebit) have been at record levels in rand terms across all of our territorie­s, demonstrat­ing the strength of our diversifie­d business,” he said in a statement.

TFG Africa’s retail turnover grew 10.4%, driven largely by clothing, with a strong performanc­e in Womenswear and Sport, as well as Homeware.

E-commerce platform Bash saw additional investment and online retail turnover grew 44.4% and contribute­d 4.2% to retail turnover. Group Ebit was up 24.9% to R4.2 billion.

TFG London experience­d elevated inflation and interest rates, and retail turnover of R7.6bn was 10.4% higher. Gross profit margins were maintained through inventory management and an increase in own-channel mix.

TFG Australia also experience­d higher inflation and interest rates, impacting consumer confidence and demand.

Compared against a strong postCovid-19 recovery base, revenue was up 0.2% to R9.4bn.

Online retail turnover grew 7.5%, contributi­ng 7.3% to TFG Australia’s retail turnover.

Thunström said TFG Africa had delivered year-long market share gains across all key categories.

“In a low growth environmen­t, this ability to continue to grow at the expense of competitor­s is critically important and speaks to the strength of TFG’s unique retail ecosystem,” he said.

Earlier in the year, the group committed to better working capital efficiency, reducing costs and paying down debt.

He said TFG exceeded all of those targets. Cash generated from operations was up 76% to R12.5bn, which, in part, drove the decrease in the group’s net debt by 31.3% to R4.9bn.

Better efficiency was reflected in the lowering of group inventorie­s by 11.6%.

The build-out and optimisati­on of stores continued, with 272 new stores opened, 100 stores were enlarged, revamped, relocated or reduced and 106 unprofitab­le stores were closed. Thunström said they had managed to increase trading densities by 10% across its more than 3 500 Africa stores in the year.

Bash saw a 45% increase in first time shoppers. Full price sales increased 63%.

“The group has purposeful­ly strengthen­ed its balance sheet and, given the ongoing tough consumer environmen­t, we see significan­t opportunit­y to build out our investment and brands, particular­ly in the value segment.

“We will also seek out strategic adjacencie­s and high-quality acquisitio­ns to bolster our retail portfolio,” Thunström said.