Retail group TFG expects to see further green shoots for the rest of the 2025 financial year on the back of the imminent interest rate cuts and strengthening rand, with the group set for another stellar results when it publishes its interim results in November.
The company on Wednesday in a trading update for the 21 weeks ended August said its African operations achieved a record gross profit of about R5.9bn in the period, with group online sales boosted by a surge in its Bash platform, which reported 42.7% growth.
Overall, the group’s online sales grew 7.8%, now accounting for nearly 11% of total sales.
“While trade remains inconsistent, indicating a consumer still under pressure, the outlook for the remainder of the 2025 financial year is likely to improve in line with both the outlook for the coming interest rate cutting cycle and the benefits in SA of a potentially stronger rand from the post-election political environment,” it said.
“Management continues to focus on both margin improvement and cost control, including ensuring ongoing realisation benefits from key strategic projects including distribution, e-commerce, and manufacturing, as well as progress in achieving the expected returns on investments from the Jet and Tapestry acquisitions.”
The SA Reserve Bank is largely expected to start cutting the cost of credit at its meeting later this month as inflation inches closer to its preferred 4.5% midpoint target.
TFG has been on an acquisition spree, which included the purchase for R2.3bn of Tapestry Home Brands, the owner of furniture stores Coricraft, Volpes, Dial-a-Bed and The Bed Store.
TFG paid about R400m for Jet in 2020.
The group said TFG London’s performance in the period was affected by continuing headwinds from low consumer confidence, which impacted non-food retail, particularly in the premium categories where its brands operate, with sales 12% lower.
TFG Australia’s sales were 3.9% lower as macro conditions continue to dampen consumer demand.
“TFG London was significantly impacted by inventory delays due to shipping disruptions in the Red Sea, high inflation and elevated interest rates. In addition, weak consumer demand drove an increased promotional environment,” the group said.
“TFG Australia also suffered from the impact of persistently high inflation and elevated interest rates, with consumers continuing to remain under pressure, impacting demand.”
TFG has just come from a record breaking financial year to end-March — a period in which it took market share from rivals — a performance that saw its annual revenue breach the R60bn mark for the first time.
The group, which has more than 30 brands, beat many of its targets for the year. These included reducing its debt levels from R7.1bn to R4.9bn against a target of R6.4bn.
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