Cape Town 091013. Foschini in the Golden Acre, Cape Town. PHOTO SAM CLARK, Buisness Report.

Fashion retailer Foschini Group (TFG) on Tuesday reported a 23.6% increase in diluted headline earnings per share from 619.9 cents to 766.1 cents for the year ended March.

Retail turnover for the year was up 17% to R11.6 billion.

The group declared a final dividend per share of 265 cents which was a 25% increase on last year, stretching the total dividend for the year by 30% to 455 cents per share.

“The strategic initiatives undertaken by our group have produced a good result for this year. In line with our strategy of driving top line growth, buying efficiencies achieved during the year were once again passed on to our customers resulting in the gross margin being the same as the previous year,” the group stated.

The group's operating margin for the year increased to 24.0% from 23.2%, moving closer to our medium-term target of 25%.

“Supporting our strategy of investing for the longer term, the group continued to grow trading space in the second half by opening a further 79 stores. 150 stores were opened in the full year whilst 20 were closed. At the year-end the group was trading out of 1 857 stores, with an increase in trading area of 7.7% compared to the previous year.”

The group currently trades out of 87 stores outside of South Africa, with 58 in Namibia, 11 in Botswana, 12 in Zambia, 2 in Lesotho and 4 in Swaziland. Over the next two years a further 39 stores are planned to be opened in the countries where it already operates as well as Mozambique and Nigeria.

Looking ahead, Foschini’s said that while there has been a softening in turnover since January of this year, retail turnover for the first eight weeks of the new financial year has been satisfactory, though some caution is warranted given the impact of fuel and utility increases on its customers, as well as the very strong comparative base.

“In line with our strategy of investing for long-term growth, we will continue to open new stores in certain of our formats. We anticipate opening in excess of 140 new stores in the year ahead which will increase trading space by approximately 6%,” the group concluded. - I-Net Bridge