Foschini to double headline earnings as Covid restrictions ease
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THE Foschini Group (TFG) yesterday flagged a doubling in headline earnings for the half-year ended September 2021 as the acquisition of profitable Jef stores paid off and the stringent Covid-19 pandemic restrictions were relaxed.
TFG, whose brands include Foschini, Fabiani and sportscene, said it would report a 100 percent increase in headline earnings a share in the six months ended September up from -91 cents per share a year earlier.
TFG expects earnings per share to be more than 50 percent higher than the 161.5 cents per share reported in 2020.
The group said among others, the acquisition of certain commercially viable stores and selected assets of Jet in South Africa, Botswana, the Kingdom of Eswatini, Lesotho and Namibia had impacted its earnings. It said the inclusion of a bargain purchase gain on acquisition of R694.3 million in the prior period, specifically affected basic earnings a share and diluted earnings a share.
TFG acquired 382 Jet stores in South Africa from Edcon for R333.2m as part of a strategy to expand into the value segment of the Southern African retail apparel market.
Speaking to the media this week, TFG chief executive Anthony Thunström said TFG planned to roll out 200 new stores this year and said it was gratifying to see how Jet stores had developed since they were merged into the group.
“Jet was pretty much on its knees. It had no banking facilities, no stocks and were being drip fed money by business rescue practitioners to keep the lights on and most suppliers had stopped supplying them because they believed they would not get paid ,” said Thunström, adding that Jet stores had exceeded expectations in terms of margin growth.
TFG, whose stores are spread across South Africa, the UK and Australia, said the majority of stores which were impacted by the wave of civil unrest in parts of Gauteng and KwaZulu-Natal in July had resumed operations.
TFG said of the 198 stores confirmed as looted and damaged to varying degrees, 145 stores were now open and trading with a further 24 stores to reopen shortly and 29 stores would only reopen in 2022 due to extensive structural damage caused. JET stores were the hardest hit during the looting.
TFG estimated the total the South African Special Risk Insurance Association (Sasria) claim for damages and asset losses at R613m and the said group had received its first interim insurance payment of R200m from Sasria, with further payments expected during the second half of the financial year.
“The group is also evaluating its anticipated recoveries for its insured business interruption losses of profit, which have not been finalised as yet,” said TFG.
Sasria said this week R3.9 billion would be disbursed from the National Treasury following the conclusion of the recently tabled Special Appropriation Bill Parliamentary processes.
“This is intended to assist Sasria in meeting its obligations until the end of the current financial year which ends on March 32, 2022,” said Sasria this week.
BUSINESS REPORT ONLINE