JOHANNESBURG - Clothing and homeware retailer TFG chief executive Doug Murray yesterday bemoaned the criteria that government sought to introduce in order to curb reckless lending, saying the affordability assessment criteria were unnecessary.
The Western Cape High Court in March ruled in favour of Truworths, TFG and Mr Price, who challenged the requirements of the National Credit Act. The companies took the Department of Trade and Industry and the National Credit Regulator to court and won.
Speaking after the release of the company’s results for the year ended March 31, Murray was indifferent about the court victory. “(The court ruling) takes us back to where we were,” he said. He said the regulations were incorrect and unnecessary. “We are a responsible creditor,” he said.
Meanwhile, TFG’s shares yesterday slumped 7.37percent despite the group increasing group turnover in the year by 21.4percent to R28.6billion.
Headline earnings were up 9.6percent to R2.5bn. The group declared a final dividend of 420cents a share. Total dividend for the year was 745c a share.
The results included eight months’ trading of Australian menswear company Retail Apparel Group, which TFG acquired with effect from July 24 last year. On the other hand, the trading of UK womenswear brand Hobbs was included for four months.
The group’s clothing turnover was almost 29percent, while jewellery and homeware and furniture turnover increased by less than 1percent. Cosmetics and cellphones were down 2.4percent and 0.2percent, respectively.
“Our international acquisitions, strong growth in Africa, focus on cost control and optimal capital allocation, together with our portfolio of brands from value to upper end, have enabled us to deliver robust returns for our shareholders under difficult conditions,” said Murray.
In the year, TFG - the owner of Foschini, Markham, Total Sports and other brands - grew group credit turnover by 5.3percent. “This was in line with expectations, as the negative impact of the Affordability Regulations is now in the base,” he said.
TFG added 602 outlets as part of the TFG Australia and Hobbs acquisitions. The company opened 281 outlets - 146 in TFG Africa, 91 in TFG London and 44 in TFG Australia. It closed 177 under-performing outlets.
He said TFG was cautious about the economic and political outlook, both in South Africa and abroad. UK uncertainty about the Brexit negotiations, among other factors, continued to affect consumer and business confidence.
He said the recent court ruling on the Affordability Regulations signalled an improved outlook for the South African credit environment, “but caution is required regarding future regulatory developments in this sector”.