Newly acquired Jet is TFG’s Covid-19 lifesaver as turnover grows

TFG SENS statement:

Trading update for Q3 FY2021 and the nine months to 26 December 2020

Salient features:

  • TFG Africa Q3 FY2021 turnover growth of 14.7% (excluding Jet flat on prior year);
  • Cash turnover growth for TFG Africa of 36.5% for Q3 FY2021 and 8.5% for the nine months to 26 December 2020. Cash turnover now contributes approximately 68.5% to total TFG Africa turnover;
  • Further approvals received for the acquisition of the remainder of Jet’s operations in Africa; 
  • Continued focus on cost containment;
  • Gearing further reduced; and
  • Group online turnover for the nine months to 26 December 2020 contributed 12.0% (comparable prior period: 8.1%) to total Group turnover. 

Background

The devastating impacts of the Covid-19 pandemic continue to be felt across the globe. Many countries, including our three main territories, South Africa, the United Kingdom (UK) and Australia, are experiencing second waves of the pandemic, with governments in these countries being left with no alternative but to impose further lockdown restrictions to protect its citizens and curb the spread of the virus.

In South Africa, the country reverted to adjusted Level 3 restrictions from 29 December 2020. In the UK, following the second national lockdown from 5 November to 2 December 2020, a third national lockdown was announced on 4 January 2021. In Australia, different states and territories have different levels of restrictions based on the specific number of positive cases in each region.

Read also: What’s next for Foschini, Jet after Covid-19? TFG update

While the government-enforced lockdowns are required to protect peoples’ lives, they also impact the countries’ economies, increase unemployment, place further strain on already impacted consumers and force store closures.

Despite the ongoing challenges described above, the Group continued seeking growth opportunities, and acquired the Jet business in South Africa, effective 25 September 2020 and the Jet businesses in Botswana, the Kingdom of Eswatini, Lesotho and Namibia at various effective dates in December 2020 and January 2021. Consequently, the results below include Jet, unless otherwise indicated.

TFG Africa update

TFG Africa’s turnover grew by 14.7% during Q3 FY2021 compared to the same period in the previous financial year. Excluding the newly acquired Jet business, turnover for the quarter declined by 0.7%*, a satisfactory performance in difficult trading conditions and against a record high November Black Friday and November month in the previous financial year. All merchandise categories grew turnover compared to the same quarter in the previous financial year, except for the most discretionary categories, cosmetics and jewellery.

* Pro forma management account numbers used to calculate an indicative turnover growth

TFG Africa’s like-for-like turnover growth (which by definition excludes Jet) has been particularly encouraging with growth of 5.3% in October and 0.8% in December. November turnover was against a record Black Friday (c.R515m) recorded in the previous financial year (this financial year c.R341m), which led to a like-for-like turnover decline in November of 10.2% being reported as we ensured compliance with several Covid-19 requirements, including the restriction on the number of customers in store and curtailed operational hours.

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