Fashion group TFG received a large profit bump from its acquisition of Jet stores, recognising an almost R700m accounting gain from the deal.
The group, whose brands include American Swiss, Foschini and Markham, reported profit of R416.3m for its six months to end-September, from R1.23bn previously, recognising a R694.3m gain on purchase, with this calculation a provisional one.
Though an accounting measure, this is some indication of the value that TFG may have unlocked from the deal.
In a surprise move in July, the group announced it had made a R480m bid for commercially viable Jet stores; the transaction proceeded in September, with TFG picking up 425 stores across Southern Africa.
TFG, however, swung into a headline loss of R221m, from headline earnings of R1.2bn previously, while group revenue fell more than a quarter to R13.9bn as Covid-19 shuttered stores and hit economic activity in general.
Headline earnings is a widely used profit measure in SA, and excludes certain one-off items to better represent underlying performance.
The group reported significant trading disruption across the UK, SA and Australia, with most of the group’s 4,083 outlets closed throughout April.
TFG said the outlook for trading conditions remained uncertain as consumer confidence remained under pressure and further lockdowns as a result of the second wave of Covid-19 infections have already been experienced in TFG Australia, and are being experienced in TFG London at present.
“We are, however, confident that the group is well positioned to take advantage of any economic recovery and that our continued investment in our brands ... will continue to benefit the group,” the statement read.
TFG’s share was up 6.23% to R93.79 in morning trade on Thursday, on track for its best day in almost two months.
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