Foschini inches into the green


Foschini inches into the green


Published Date: 2021-10-08 | Source: INCE|Community | Author: The Finance Ghost

Foschini inches into the green

The Foschini Group (TFG) has released a trading statement for the six months to September, with headline earnings per share (HEPS) expected to be at least 364 cents higher than the prior period, which was a loss of 91 cents.

The SENS annoyingly forces us to do the calculation instead of just giving the range. After checking on the calculator, it looks like HEPS is expected to be at least 273 cents.

That's R2.73 in six months, which doesn't look great against a share price of R133. The annualised P/E ratio on this business is higher than some of the sticker prices on its merchandise.

The company blames Covid, civil unrest and dilution from a rights offer in August 2020. From an earnings per share perspective, which I usually don't look at because of distortions, the base year benefitted from a once-off gain of R694 million on the acquisition of Jet, which wasn't repeated this year.

In the civil unrest, 198 stores were looted and damaged. 145 are open and trading, with a further 24 stores reopening shortly and 29 stores expected to open in 2022.

The total SASRIA claim is R613 million and the first payout has been received of R200 million, with further payments expected in the second half of the financial year. The group is also hoping for recoveries for business interruption losses of profit but does not give guidance in the SENS of the expected quantum.

To put those numbers in perspective, the market cap is R43.5 billion. Even a successful SASRIA claim wouldn't make much of a dent in the disconnect between the share price and the earnings.


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