Bloomberg Anywhere Remote Login Bloomberg Terminal Request a Demo

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Foschini Shares Gain on Improved Credit Risk Management

May 30 (Bloomberg) -- The Foschini Group Ltd., a South African clothing retailer, climbed in Johannesburg trading after it said full-year profit rose 13 percent and its credit risk management had improved.

The shares rose 2.7 percent to 111 rand by the close, the highest price since May 16. That pares the stock’s decline this year to 21 percent.

Foschini is seeing an improvement in late debt collections as it starts to bring these “in-house,” Chief Financial Officer Ronnie Stein said in telephone interview from Cape Town. The company has also made changes to its credit score cards so that it can predict risk better, he said.

“The credit lines seem to be under control and the market will be monitoring its credit risk management practices,” Henre Herselman, a derivatives trader at Nedbank Private Wealth, said by phone in Johannesburg.

South African retailers have reported slower sales growth this year as shoppers defaulted on their credit card loans amid slowing economic growth and rising unemployment. Retail sales growth slowed to 2.8 percent in March from 3.9 percent in February, while the economy grew 0.9 percent in the first quarter, the slowest rate since the 2009 recession.

Africa Expansion

Foschini is following other South African retailers such as Shoprite Holdings Ltd. and Massmart Holdings Ltd. in expanding across the continent to tap rising consumer spending and offset slower growth in its home market.

The retailer plans to double its outlets in the region over the next three years, opening more than 100 stores in the countries where it already operates such as Botswana, Zambia and Nigeria, as well as entering Mozambique, Angola and Ghana.

Net income for the 12 months through March was 1.79 billion rand ($179 million), compared with 1.58 billion rand a year earlier, the Cape Town-based company said in a statement today. Earnings per share excluding one-time items rose 11 percent to 8.59 rand, missing the 8.71-rand median estimate of 13 analysts surveyed by Bloomberg.

To contact the reporter on this story: Janice Kew in Johannesburg at jkew4@bloomberg.net

To contact the editor responsible for this story: Celeste Perri at cperri@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.