RESULTS PRESENTATION FOR THE YEAR ENDED 31 MARCH 2018
RESULTS PRESENTATION FOR THE YEAR ENDED 31 MARCH 2018 AGENDA OPERATING CONTEXT Doug Murray BUSINESS OVERVIEW Doug Murray Doug Murray Anthony Thunström Chief Executive Officer Chief Financial Officer FINANCIAL REVIEW Anthony Thunström TFG FINANCIAL SERVICES Jane Fisher TFG LONDON Ben Barnett Jane Fisher Ben Barnett TFG London Group Director TFG AUSTRALIA Gary Novis OUTLOOK Anthony Thunström Gary Novis TFG Australia RESULTS PRESENTATION 2 FOR THE YEAR ENDED 31 MARCH 2018 TFG Results presentation 2018 1 www.tfglimited.co.za
OPERATING CONTEXT OUR OPERATING CONTEXT GEOGRAPHIC TURNOVER ONLINE TURNOVER CASH VS CREDIT TURNOVER CONTRIBUTION CONTRIBUTION CONTRIBUTION Online turnover contribution 6,5% TFG Australia Credit 11,0% turnover contribution TFG 34,1% London 18,7% Outlet TFG turnover Cash Africa contribution turnover 70,3% 93,5% contribution 65,9% RESULTS PRESENTATION 4 FOR THE YEAR ENDED 31 MARCH 2018 TFG Results presentation 2018 2 www.tfglimited.co.za
OPERATING CONTEXT – SOUTH AFRICA Latest Comparative period period CPI % 3,8 6,1 GDP 1,3 0,6 Consumer Confidence Index +26 -5 Business Confidence Index 45 40 − Political uncertainty in South Africa continued to impact the economy for most of the financial year. Outlook has however improved with the inauguration of President Ramaphosa mid February 2018. − Foreign and local credit ratings affirmed – outlook revised from negative to stable (Moody). − Rand remained volatile for most of the year, strengthening in early 2018. − Outlook for SA economy: • Improved outlook for consumer spending – growth forecast at 2,3% for 2018. • Interest rate expected to remain flat. • Inflation outlook stable averaging just below 5% for 2018. • GDP forecast 1,9% for 2018 and 2% for 2019. Source: Stats SA, BER RESULTS PRESENTATION 5 FOR THE YEAR ENDED 31 MARCH 2018 OPERATING CONTEXT – UK Latest Comparative period period CPI % 2,5 2,3 GDP 1,8 1,9 GfK Consumer Sentiment -7 -6 CBI Business Optimism -4 1 − Political and economic uncertainty relating to outcome of Brexit negotiations continues. − Economic growth slowed during 2017 as growth in consumer spending moderated and consumer price inflation increased. − UK growth rated slowest of G7 countries in 2017, and had the weakest consumer confidence of major EU countries − The interest rate increased to 0,5% from 0,25% in November 2017, the first increase in more than a decade, with further increases likely in 2018. − The Pound remains weak and volatile compared to its pre-Brexit levels, particularly against the Euro. − UK retailers face increasing headwinds as a number of high street brands fall into administration (e.g. Jacques Vert, EAST, Jones the Bootmaker, Agent Provocateur, Jaeger) as well as increased threats of store closures from larger retailers (New Look, Mothercare, Carpetright, Homebase etc). Source: Office for National Statistics, GfK, Tradingeconomics.com RESULTS PRESENTATION 6 FOR THE YEAR ENDED 31 MARCH 2018 TFG Results presentation 2018 3 www.tfglimited.co.za
OPERATING CONTEXT – AUSTRALIA Latest Comparative period period CPI % 1,9 2,1 GDP 2,1 2,8 Consumer Sentiment 3,2 0,6 Business Confidence 7 6 − Consumer confidence in Australia is slightly more optimistic. − The level of unemployment remains low and unchanged. − Within the retail sector, declining traffic in shopping centres partially attributable to changes in consumer behaviour as customers shift to online sales channels. − Recent retail results indicate tough trading conditions in Australia. Source: Australian Bureau of Statistics, Westpac-Melbourne Institute, Tradingeconomics.com, National Australia Bank, Reserve Bank of Australia RESULTS PRESENTATION 7 FOR THE YEAR ENDED 31 MARCH 2018 BUSINESS OVERVIEW TFG Results presentation 2018 4 www.tfglimited.co.za
BUSINESS OVERVIEW: TFG − Diverse group with a successful portfolio of 28 leading fashion retail brands − Diversification through: • Cash and credit turnover • Geography – 4 034 outlets in 32 countries on 5 continents • Full OMNI offering – brick and mortar, concessions and online • Broad product offering across various merchandise categories: • Clothing, jewellery, homeware & furniture, cellphones and cosmetics RESULTS PRESENTATION 9 FOR THE YEAR ENDED 31 MARCH 2018 SIGNIFICANT CHANGES DURING THE YEAR CHANGES IN GROUP STRUCTURE − TFG London • Phase Eight: buy-out of c.15% minority interest completed December 2017 • Hobbs: 4 months‘ trading included in current year, no trading included in prior year (effective date 25 November 2017) − TFG Australia • Retail Apparel Group: 8 months‘ trading included in current year, no trading included in prior year (effective date 24 July 2017) CAPITAL RAISE − R2,5 billion accelerated bookbuild launched 31 July 2017 to fund acquisition of RAG • 17,2 million ordinary shares issued at R145 per share • Shares issued at 0,9% premium to 30-day VWAP • Offer 3 times oversubscribed RESULTS PRESENTATION 10 FOR THE YEAR ENDED 31 MARCH 2018 TFG Results presentation 2018 5 www.tfglimited.co.za
SIGNIFICANT CHANGES DURING THE YEAR (CONTINUED) CHANGES IN E-COMMERCE − Launched online selling of @homelivingspace, Exact, Foschini and SODA Bloc brands • 20 of our 28 brands now trade online CHANGES IN INTEREST RATE ENVIRONMENT − TFG Africa: • Current financial year: repo rate in South Africa reduced by 0,25% to 6,75% in July 2017 with a further 0,25% reduction in March 2018 • Prior financial year: no changes to repo rate − TFG London: • Current financial year: Interest rate in UK increased to 0,5% in November 2017 • Prior financial year: Interest rate in UK reduced from 0,5% to 0,25% in August 2016 − TFG Australia: • Unchanged at 1,5% RESULTS PRESENTATION 11 FOR THE YEAR ENDED 31 MARCH 2018 FY 2018: SALIENT FEATURES Headline earnings growth (excl acquisition costs) + 9,6% (constant currency = +10,2%) HEPS growth (excl acquisition costs) + 3,4% (constant currency = +4,0%) HEPS (cents) (excl acquisition costs) 1 136,5 Interim dividend (cents per share) 325,0 Final dividend (cents per share) 420,0 Growth in final dividend +5,0% Total dividend (cents per share) 745,0 Growth in total dividend +3,5% RESULTS PRESENTATION 12 FOR THE YEAR ENDED 31 MARCH 2018 TFG Results presentation 2018 6 www.tfglimited.co.za
FY 2018: SALIENT FEATURES (CONTINUED) GROUP GROUP March 2018 March 2017 Net bad debt as a % of debtors‘ book (TFG Africa) 10,0 11,3 Free cash flow (Rm) 1 880,6 1 298,8 Debt / equity – recourse (%) 54,6 53,6 Debt / equity – total (%) 61,4 65,3 RESULTS PRESENTATION 13 FOR THE YEAR ENDED 31 MARCH 2018 SEGMENTAL PERFORMANCE: TFG AFRICA TFG AFRICA TFG AFRICA TFG AFRICA March 2018 March 2017 % change Retail turnover (Rm) 20 111,7 18 912,8 6,3 Gross margin (%) 47,8 46,4 EBITDA excl acquisition costs (Rm) 4 074,9 3 823,0 6,6 New outlets 146 206 Closed outlets 83 79 Total outlets at end of year 2 652 2 589 − Turnover growth pleasing in difficult trading environment − Gross margin improvement – good performance in a deflationary product price environment and high levels of discounting in market − Focus on cost control continued, although increased marketing and promotional spend was required to drive turnover in tough retail market − Space growth of 3,5% • 4,9% new space added • 2,3% space closed • Balance – enlargements and relocations RESULTS PRESENTATION 14 FOR THE YEAR ENDED 31 MARCH 2018 TFG Results presentation 2018 7 www.tfglimited.co.za
SEGMENTAL PERFORMANCE: TFG LONDON TFG TFG TFG LONDON LONDON LONDON March 2018 March 2017 % change Retail turnover (GBPm) 310,9 251,8 23,5 Gross margin (%) 61,9 63,0 EBITDA excl acquisition costs (GBPm) 24,8 28,9 (14,2) Underlying EBITDA (GBPm) 28,0 27,8 0,7 New outlets 91 125 Closed outlets 83 49 Total outlets at end of year 935* 739 − Inclusion of Hobbs for four months in current financial year − As expected, tough trading conditions continued during 2018 driven by the shift in consumer spend from offline to online − Gross margin slightly down, reflective of trading conditions as well as shift to online − Phase Eight concession partners online sales negatively impacted in H1 by system platform changes in the UK and adverse weather in February of H2 − Underlying EBITDA: • As reported at interim, adverse forex impact in 2018 (loss of £0,7m) compared to 2017 gain (£1,4m) due to Brexit exchange rate movements • Proactively managing the store estate given the shift in consumer spend (March 2018: £2,5m and March 2017: £0,3m) * Includes 188 outlets acquired with Hobbs RESULTS PRESENTATION 15 FOR THE YEAR ENDED 31 MARCH 2018 SEGMENTAL PERFORMANCE: TFG AUSTRALIA TFG AUSTRALIA March 2018 Retail turnover (AUDm) 312,1 Gross margin (%) 65,5 EBITDA excl acquisition costs (AUDm) 39,6 New outlets 44 Closed outlets 11 Total outlets at end of year 447 − 8 months‘ trading of RAG and 12 months‘ trading of G -Star included − Turnover growth in AUD 8 month comparative period c.14% − Gross margin and EBITDA ahead of expectation − Strong performance despite pressure on consumer spend and increased competitive behaviour in Australian market RESULTS PRESENTATION 16 FOR THE YEAR ENDED 31 MARCH 2018 TFG Results presentation 2018 8 www.tfglimited.co.za
Recommend
More recommend
