Foschini will enter Nigeria and Mozambique in addition to expanding in its existing markets, the Cape Town-based company said in a statement today. Foschini operates 87 stores outside of South Africa, with 58 in Namibia, 11 in Botswana, 12 in Zambia, four in Swaziland and two in Lesotho.
With 1,857 stores as of March 31, Foschini is following other South African retailers such as Shoprite Holdings Ltd. (SHP) and Massmart Holdings Ltd. (MSM) in expanding across the continent to tap rising consumer spending.
Foschini plans to offer credit purchases in the African countries outside of South Africa in which it operates, Chief Financial Officer Ronnie Stein said in a telephone interview from Cape Town today. Outside of South Africa, the company only offers credit sales in Namibia and Botswana.
Net income in the year ended March 31 climbed 22 percent from a year earlier to 1.58 billion rand ($192 million). Diluted earnings per share excluding one-time items rose 24 percent to 7.66 rand, beating the 7.59-rand median estimate of 14 analysts surveyed by Bloomberg.
Foschini’s shares advanced 0.5 percent to 118.10 rand at the close of trading in Johannesburg, bringing the gain this year to 12 percent.
Bad debt as a percentage of the debtors’ book rose to 9.4 percent, from 9.2 percent in the previous year. It won’t rise to more than 10 percent in the new financial year, Stein predicted.
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