Foschini Group to keep its focus on expansion

THE FOSCHINI Group would continue to focus on its local expansion programme and acquisitions internationally to cement its footprint in the fragile retail sector on the continent, it said yesterday.

The group said it would not change its approach as its diversification, product offering and value for the customer proved to be the cornerstone of its success in the period.

Chief executive Doug Murray said the group would continue to invest in its business because the retail sector was a very competitive business with a lot of players.

“Given our continued focus on cost containment, our ongoing South African and African expansion strategy, complimented by our international acquisitions and growth, we have delivered good returns for our shareholders, despite the tough economic climate and market uncertainty,” Murray said. The group yesterday posted a 17.6 percent increase in headline earnings a share from continuing operations (excluding once-off acquisition costs) to 1 055.8 cents for the year to the end of March.

Turnover growth

Murray said the company now traded out of 176 stores in six countries in the rest of Africa.

He said with the exception of Namibia (which is being hurt by the weak commodity cycle affecting the Angolan economy), all its businesses recorded turnover growth of 31.6 percent to 14.6 percent, taking overall growth to 16.6 percent including Namibia.

“Expanding our footprint in the rest of Africa remains a group objective,” Murray said.

The diversified retail group now trades in 31 countries.

The group said its total retail sales grew 31.2 percent.

It said profit for the year in review went up 13.7 percent to R2.16 billion and revenue rose 31.2 percent to R21.11bn.

The group saw credit turnover growth slowing in the second half to 5.1 percent from 6.8 percent in the first half, resulting in full-year credit turnover growth of 5.9 percent.

It said its retail debtors’ book of R6.7bn increased by 8 percent and net bad debt reduced by 7.4 percent compared with an increase of 9.4 percent in the previous year.

Foschini shares rose 2.3 percent to close at R142.20 yesterday.