Foschini earnings to take a knock after KZN floods
THE FOSCHINI Group’s (TFG’s) earnings for the 12 months to March 2022 have been knocked by the KwaZuluNatal floods and the Covid-19 pandemic.
In a trading update released yesterday the retailer said its headline profit should be more than 692.6 cents per share, compared to 197.9c per share in the previous year.
“The expected earnings ranges have been impacted, inter alia, by the Covid-19 pandemic and the related government-enforced lockdowns and related store closures in all three of our main trading jurisdictions during the prior period, as previously reported,” the group said.
TFG, which owns American Swiss and @home, said 36 of its stores as well as a cloth warehouse in KZN were damaged to varying degrees during the floods.
The floods, which hit KZN, killed 435 people, leaving thousands homeless and causing at least R10 billion of damage to infrastructure.
“These damages are not considered to be material in the context of the group’s South African operations, and all affected stores have since resumed trading. The group has appropriate insurance cover and has notified its insurers accordingly,” it said.
TFG also said it established a task team that was continuously assessing the impact on its employees and business operations. “The group is saddened by the recent unprecedented flooding in KZN in South Africa that has caused tremendous devastation across the province.
“The group is deeply concerned for the well-being of those affected by the flooding and our priority was and is to ensure the safety and welfare of our employees as we work towards fully restoring our operations across the province,” it said.
TFG said it continued strong trading performance across all three of its main territories in the third quarter for the year 2022, as previously reported, and in the fourth quarter for year 2022.
This offset the impact of the July unrest in KZN as well as a R2.7bn goodwill impairment at its TFG London operations.
“The acquisition of certain commercially viable stores and selected assets of Jet in South Africa (effective September 25, 2020) and in Botswana, the Kingdom of eSwatini, Lesotho and Namibia (effective on various dates in December 2020 and January 2021).
“The inclusion of a bargain purchase gain on acquisition of R709 million in the prior period specifically affected basic EPS (earnings per share) and diluted EPS,” the group said.
Last month, the group announced that it would acquire Tapestry Home Brands – which owns Coricraft, Diala-Bed, Volpes and The Bed Store – for R2.43 billion as it expands into the homeware space.
In afternoon trade, TFG’s share price was up 1.26 percent at R141.16.