TFG holds on to dividend and considers almost R4bn rights offer
The retailer says it wants to be prepared for the risks posed by Covid-19, as well as opportunities
Clothing group TFG has held on to its final dividend and is considering an almost R4bn rights offer as it prepares for economic uncertainty in the wake of the Covid-19 pandemic.
The fashion group reported a strong operational performance in its 11 months to end-February, but sales fell off sharply in March, with the group saying it wanted to prepare for both economic uncertainty amid the pandemic and opportunity.
TFG said it would be seeking shareholder approval to raise up to R3.95bn through a rights offer.
“This will allow TFG to strengthen its relative position through the recovery and insulate the balance sheet against potential future shocks, while at the same time positioning itself for future growth and opportunities,” the group said.
No final dividend was declared in the group’s year to end-March, with TFG paying out 450c previously. The group has about 237-million shares in issue.
Headline earnings per share fell 1.1% to 1,174.4c, while retail turnover for the 12 months to March 2020 grew 3.6% to R35.3bn. Cash sales increased by 5.9% and credit sales decreased by 2.5%.
TFG said that as of May 1, about 80% of stores in TFG Africa had reopened, all adhering to strict safety protocols. As of June 1, all stores had reopened, but the group said any reintroduction of more stringent lockdown restrictions could have a severe effect on its 2021 year.
In morning trade on Thursday, TFG’s share price was flat at R69.03, having more than halved so far in 2020.