Avior Capital Markets - Foschini Group Limited (105W) TFG | slow but steady wins the race

Report

Avior Capital Markets

Atiyyah Vawda

TFG | slow but steady wins the race

TFG's H1'18 results were in line with our expectations, delivering sales growth of 9.2%, GP margin expansion of 120bps in the local business and earnings growth of 5.6% (Avior: 6%) in a difficult operating environment. The results displayed the success of cost cutting and inventory optimisation strategies. In this note, we also provide feedback on the Launch of the Fabiani Women brand and our view on the announced Hobbs acquisition.

10/11/2017 1 EN

Underlying

Foschini Group Limited

Foschini Group is an investment holding company. Through its retail operating divisions - the @home, Exact!, the Foschini division, the Jewellery division, Markham and the Sports division; Retail Technology Division, TFG Design Centre; TFG Merchandise Procurement; and TFG Financial Services - retail clothing, jewellery, accessories, cosmetics, sporting and outdoor apparel and equipment, and homeware and furniture to the middle-income group throughout southern Africa. The RCS Group, an operationally independent consumer finance business that provides a range of financial services under its own brand in South Africa, Namibia and Botswana.

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ZAE000148466 Johannesburg Stock Exchange South Africa

Provider

Avior Capital Markets

Avior is a globally recognised capital markets research and trading firm, with the broadest research coverage within the region, with 100+ SA and 20+ SSA companies under coverage. Avior services clients from offices in London, Cape Town and Johannesburg.

Our research quality is consistently recognised in local and global surveys, with 18 analysts currently rated in their respective sectors (FM 2017). Value add through in-depth, innovative, high quality and consistent research with comprehensive underlying fundamental modelling supported by regular analyst and roadshow interactions.

Avior has proven that by working closely with our clients we can mutually develop dominant positions in certain sectors, going from strength to strength. Avior has a dedicated ESG team, having been ranked #1 in Corporate Governance research since 2008.

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Analysts

Atiyyah Vawda

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