South Africa's TFG sees retail turnover growth of 11.3% in six months

TFG Africa has recorded retail turnover growth of 16.1 per cent (9.7 per cent excluding Tapestry) and like-for-like retail turnover growth of 3.3 per cent. Cash retail turnover growth for TFG Africa of 21.8 per cent. Cash retail turnover now contributes 73.4 per cent to total TFG Africa retail turnover and 82 per cent to total group retail turnover. TFG London's retail turnover declined 12.4 per cent (GBP) off a high post COVID-19 base. TFG Australia's retail turnover declined 6.6 per cent (AUD) off a post COVID-19 record prior period base, the company said in a press release.

The group online retail turnover grew a pleasing 23.2 per cent during the current period with online retail turnover contributing 10.1 per cent to total group retail turnover compared to 9.1 per cent in the prior period.

As previously reported on SENS, the results of TFG's international operations were positively impacted, in the prior period, by the inflated, post COVID-19 spending recovery and consequently earnings for the six months ended September 30, 2022 ('H1 FY23') were unsustainably high. In the current period, their performance has returned to growing off pre COVID-19 levels. As a result of this, combined with the impact of high levels of load shedding that persists in disrupting operations in South Africa, especially during April, May and June 2023, earnings for the six months ending September 30, 2023 ('H1 FY24') are expected to be 15 per cent to 25 per cent lower than H1 FY23 earnings.

The growth outlook for the remainder of 2024 financial year, both globally and in South Africa, is likely to remain challenging. Disposable income and consumer confidence is only anticipated to recover in the second half of the 2024 financial year, with the anticipation of further reductions in inflation and as interest rates begin to decline.

The current period has seen TFG's operations in all territories dealing with challenging economic conditions, albeit at differing levels and for different reasons. Furthermore, all regions have had to deal with inventory bought-in for growth and at peak trading periods in the prior financial year. For TFG Africa, this resulted in a c.'300 bps' margin decline in the prior period; however, closing stock balance was down c.4 per cent year to date.

ALCHEMPro News Desk (RR)