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Johannesburg - The Foschini Group [JSE:TFG] produced a solid result for the year in a difficult trading environment characterised by the extremely challenging credit market, CEO Doug Murray said on Monday at the 77th annual general meeting.
Enhanced credit risk management practices constrained credit turnover growth to 5.7%. Cash sales were, however, buoyant growing by 15.9%.
Total retail turnover increased by 9.8% to R14.2bn whilst diluted headline earnings per share increased by 6.0% to 902.7 cents per share.
The final dividend increased by 8.5% to 293 cents with a total dividend for the year of 536 cents per share - an increase of 5.9%.
Prospects for 2015
"We expect trading conditions in the credit side of our business to remain challenging, while we anticipate that we will continue to benefit from strong cash sales growth," said Murray.
"In line with our strategy of investing for long term growth we will continue to open new stores and we anticipate increasing trading space by approximately 7% in the current year."
Trading for the first five months of this financial year reflect total sales growth of 10.3% over the previous period with same store sales growth of 4.9%.
Credit sales which have been constrained by the enhanced credit risk measures grew by 2.8%, while cash sales have been buoyant growing by 21.0%.
"In the current credit environment, our retail debtors' book is performing within management expectations and some signs of improvement have become evident," said Murray.
"As was advised on Sens on August 6 2014, the transaction in relation to our 55% holding in RCS has been completed with a closing date of August 6 2014. Our share of the net proceeds is approximately R1.45bn."
The board continues to evaluate alternatives regarding the use of the net proceeds.
"Notwithstanding the current environment, we believe the group is well positioned to deliver a satisfactory result for this year, remembering that the second half of the year is heavily dependent on Christmas trading, which will largely determine the performance of the group in the second half," he said.
Enhanced credit risk management practices constrained credit turnover growth to 5.7%. Cash sales were, however, buoyant growing by 15.9%.
Total retail turnover increased by 9.8% to R14.2bn whilst diluted headline earnings per share increased by 6.0% to 902.7 cents per share.
The final dividend increased by 8.5% to 293 cents with a total dividend for the year of 536 cents per share - an increase of 5.9%.
Prospects for 2015
"We expect trading conditions in the credit side of our business to remain challenging, while we anticipate that we will continue to benefit from strong cash sales growth," said Murray.
"In line with our strategy of investing for long term growth we will continue to open new stores and we anticipate increasing trading space by approximately 7% in the current year."
Trading for the first five months of this financial year reflect total sales growth of 10.3% over the previous period with same store sales growth of 4.9%.
Credit sales which have been constrained by the enhanced credit risk measures grew by 2.8%, while cash sales have been buoyant growing by 21.0%.
"In the current credit environment, our retail debtors' book is performing within management expectations and some signs of improvement have become evident," said Murray.
"As was advised on Sens on August 6 2014, the transaction in relation to our 55% holding in RCS has been completed with a closing date of August 6 2014. Our share of the net proceeds is approximately R1.45bn."
The board continues to evaluate alternatives regarding the use of the net proceeds.
"Notwithstanding the current environment, we believe the group is well positioned to deliver a satisfactory result for this year, remembering that the second half of the year is heavily dependent on Christmas trading, which will largely determine the performance of the group in the second half," he said.
