THE FOSCHINI GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1937/009504/06)
Ordinary share code: TFG
ISIN: ZAE000148466
Preference share code: TFGP
ISIN: ZAE000148516
(“TFG” or “the Company” and together with its affiliates “the Group”)


TRADING UPDATE FOR THE 22 WEEKS ENDED 26 AUGUST 2023 AND TRADING STATEMENT FOR
THE SIX MONTHS ENDING 30 SEPTEMBER 2023

SALIENT FEATURES
   - Group retail turnover growth of 11,3% for the 22 weeks ended 26 August 2023
      (‘current period’) compared to the 22 weeks ended 27 August 2022 (‘prior
      period’);
   - TFG Africa recorded retail turnover growth of 16,1% (9,7% excluding
      Tapestry*) and like-for-like retail turnover growth of 3,3%;
   - Cash retail turnover growth for TFG Africa of 21,8%. Cash retail turnover
      now contributes 73,4% to total TFG Africa retail turnover and 82,0% to total
      Group retail turnover;
   - TFG London’s retail turnover declined 12,4% (GBP) off a high post COVID-19
      base;
   - TFG Australia’s retail turnover declined 6,6% (AUD) off a post COVID-19
      record prior period base; and
   - Group online retail turnover grew a pleasing 23,2% during the current period
      with online retail turnover contributing 10,1% to total Group retail
      turnover compared to 9,1% in the prior period.

As previously reported on SENS, the results of TFG’s international operations were
positively impacted, in the prior period, by the inflated, post COVID-19 spending
recovery and consequently earnings for the six months ended 30 September 2022 (‘H1
FY2023’) were unsustainably high. In the current period, their performance has
returned to growing off pre COVID-19 levels. As a result of this, combined with
the impact of high levels of load shedding that persists in disrupting operations
in South Africa, especially during April, May and June 2023, earnings for the six
months ending 30 September 2023 (‘H1 FY2024’) are expected to be 15% to 25% lower
than H1 FY2023 earnings. For further detail, refer to the Trading Statement for
the six months ending 30 September 2023 included at the end of this announcement.

OPERATING CONTEXT

The Group delivered steady operational progress during the current period despite
a decline in retail turnover from the international business segments as explained
above. TFG Africa’s trading continues to be heavily impacted by load shedding in
South Africa.

ESKOM LOAD SHEDDING

TFG Africa excluding Tapestry lost c.250,000 trading hours during the current
period, 1,8 times more trading hours than the prior period due to the higher
levels of load shedding experienced. During the current period, c.91,000 trading
hours were lost in the Tapestry business.

As at 26 August 2023, 2,284 stores had back-up power, representing c.75% of TFG
Africa’s retail turnover (excluding Tapestry where we have recently installed back
up power solutions). Persistent load shedding is expected to depress economic
growth, prolonging the profound impacts on small business, employment, consumer
spending, our local supply chain partners and ultimately the retail sector.

INTERNATIONAL OPERATIONS
As explained above, TFG London and TFG Australia’s performance in the current
period is set against an unsustainable prior period, due to the buoyant sales
experienced in the post COVID-19 trading period. As a result of higher inflation
and interest rates, consumers in both Australia and the United Kingdom remain
under pressure which has adversely impacted both demand and consumer confidence
in their respective core operating markets.

Consequently, and in line with previously advised expectations, the TFG London
and TFG Australia business segments traded below prior period retail turnover
levels in the current period. At a gross margin level, TFG London managed to
maintain margins at prior period levels, whereas TFG Australia traded below prior
period levels due to promotional activity.

TFG AFRICA PERFORMANCE UPDATE

In TFG Africa, a pleasing retail turnover growth of 16,1% was achieved during the
current period and was driven largely by the clothing and homeware merchandise
categories. Excluding Tapestry, TFG Africa achieved a retail turnover growth of
9,7%*.

The growth in TFG Africa's retail turnover, compared to the same period in the
previous financial year, in the respective merchandise categories was as follows:

Merchandise category                      22 weeks ended    Contribution to
                                          26 August 2023         TFG Africa
                                                            retail turnover

Clothing                                           11,8%              72,3%

Homeware                                         **77,2%              13,7%

Cosmetics                                           3,8%               2,6%

Jewellery                                           0,1%               3,5%

Cellphones                                          2,5%               7,9%

Total                                              16,1%             100,0%


** 5,3% excluding Tapestry*

Cash retail turnover for the current period grew by 21,8% compared to the prior
period and contributed 73,4% to total TFG Africa retail turnover for the current
period.

Credit retail turnover for the current period grew by 2,9% compared to the prior
period. Average acceptance rates for new accounts at 17,4% for the current
period, remained stable when compared to the second half of the prior financial
year (17,0%).

Following the successful launch of TFG’s new online platform, Bash, online retail
turnover grew by a pleasing 34,0% during the current period (53,8% including
Tapestry*). Total online retail turnover now contributes 4,2% to total TFG Africa
retail turnover (3,2% during the prior period).

TFG Africa traded out of 3,668 stores as at 26 August 2023, a net increase of 144
stores since 1 April 2023.

TFG Africa’s gross margin is now tracking 3,3% behind the comparative prior year
period as a result of exchange rate related inflation and increased promotional
activity across the market.
The recent protracted taxi strike impacted trade within the Western Cape from 3
August to 10 August 2023. TFG Africa, excluding Tapestry, underperformed, the
prior comparative period (3 August to 10 August 2022), by R11 million, and Tapestry
underperformed by R9 million. The operational impact at key distribution centres
was managed, however, once off additional costs were incurred to secure facilities
and transport staff so that the impact on staff and customers could be minimized.

TFG LONDON PERFORMANCE UPDATE

In line with expectations, the retail turnover in TFG London contracted 12,4% on
the prior period, whilst online retail turnover declined 2,7% (both in GBP
currency). Management continues to focus on targeting gross margin expansion as
tough local economic conditions continue to prevail.

Online retail turnover’s contribution to total retail turnover increased from
36,8% in the prior period to 40,9% in the current period.

TFG AUSTRALIA PERFORMANCE UPDATE

TFG Australia experienced similar adverse economic pressures to that of TFG London
during the current period and traded against the extremely high base in the prior
period, which resulted from post COVID-19 pent up demand. As a result of more
normalised demand, TFG Australia reflected a 6,6% decline in retail turnover
during the current period (in AUD currency), which represents c. 35% growth on
pre COVID-19 levels (year 2020).

Online retail turnover grew 1,5% during the current period, now contributing 6,0%
to total retail turnover (5,5% during the prior period).

GROUP PERFORMANCE UPDATE

Despite a strong prior period performance and tough economic and operating
conditions experienced both in South Africa and by our international business
segments in the current period, the Group sustained pleasing retail turnover
growth during the first 22 weeks of the 2024 financial year.

The retail turnover growth, compared to the same period in the previous financial
year, in each of our business segments was as follows:

Business segment                           22 weeks ended    Contribution to
                                           26 August 2023       Group retail
                                                                    turnover

TFG Africa (ZAR)                                    16,1%              67,5%

TFG Australia (ZAR)                                  1,7%              18,0%

TFG London (ZAR)                                     3,7%              14,5%

Group (ZAR)                                      ***11,3%             100,0%


*** 7.2% excluding Tapestry*

As part of our stated strategy to offer an improved online experience and offering,
Group online retail turnover grew 23,2% during the current period, driven largely
by the 53,8% growth in TFG Africa. The contribution from online retail turnover
to total Group retail turnover for the current period was 10,1% (9,1% during the
prior period).

Group capital expenditure of R809 million during the current period, was largely
driven by the investment in stores, logistics and the Street Fever acquisition.

OUTLOOK
The growth outlook for the remainder of 2024 financial year, both globally and in
South Africa, is likely to remain challenging. Disposable income and consumer
confidence is only anticipated to recover in the second half of the 2024 financial
year, with the anticipation of further reductions in inflation and as interest
rates begin to decline.

The current period has seen TFG’s operations in all territories dealing with
challenging economic conditions, albeit at differing levels and for different
reasons. Furthermore, all regions have had to deal with inventory bought-in for
growth and at peak trading periods in the prior financial year. For TFG Africa,
this resulted in a c.‘300 bps’ margin decline on the prior period, however closing
stock balance was down c.4% year to date.

The operating environment remains challenging as we move into the second half of
the 2024 financial year, including persistent and unpredictable load shedding in
South Africa and the weaker ZAR exchange rate against major currencies. Retail
turnover in H2 FY2024 is expected to grow on that achieved in H2 FY2023, especially
in Q4 FY2024, as it will be against the softer base of Q4 FY2023. Further, gross
margins in H2 FY2024 are expected to improve in all regions.

The outlook remains cautious, especially in the UK, with possible further softening
in the coming months as many industries battle persistent inflation, higher energy
costs and higher interest rates, which may have a negative impact on jobs and
consumer confidence. It is expected that customers will continue to seek value,
which could drive further promotional activity as the cost of living pressures
continue throughout 2023.

We are cautiously optimistic that TFG Australia’s consumer will remain resilient.

As previously communicated, the Group has, in response to the muted growth
environment, adopted a conservative approach to its organic growth plans with less
store openings expected in H2 FY2024 when compared to H2 FY2023. The Group will
continue to focus on the consolidation of its world class assets to further improve
its balance sheet strength and consequently the return to shareholders.

* Pro forma management account numbers used to calculate an indicative retail
turnover growth.

PRO FORMA FINANCIAL INFORMATION

Pro forma management account information for Tapestry was used in this
announcement for illustrative purposes only to provide an indicative retail
turnover growth for TFG Africa excluding the acquired Tapestry business.

Tapestry retail turnover for the period since acquisition on 1 August 2022 to 27
August 2022 was removed as if the acquisition did not take place.

This pro forma financial information, because of its nature, may not be a fair
reflection of the Group's results of operations, financial position, changes in
equity or cash flows. There are no material events subsequent to the reporting
date which require adjustment to the pro forma financial information.

The pro forma management account retail turnover numbers used were:

                       22 weeks ended     22 weeks ended              Growth
                       26 August 2023     27 August 2022

                                   Rm                  Rm                  %

TFG Africa                   14 567,5            12 546,5               16,1
retail turnover
including
Tapestry

Less: Tapestry          (1 029,8)          (209,4)    391,7
retail turnover#

TFG Africa               13 537,7         12 337,1      9,7
retail turnover
excluding
Tapestry


                   22 weeks ended   22 weeks ended   Growth
                   26 August 2023   27 August 2022

                               Rm               Rm        %

TFG Africa                1 994,8          1 126,0     77,2
Homeware retail
turnover
including
Tapestry

Less: Tapestry          (1 029,8)          (209,4)    391,7
retail turnover#

TFG Africa                  965,0            916,6      5,3
Homeware retail
turnover
excluding
Tapestry



                   22 weeks ended   22 weeks ended   Growth
                   26 August 2023   27 August 2022

                               Rm               Rm        %

TFG Africa                  615,6            400,2     53,8
online retail
turnover
including
Tapestry

Less: Tapestry             (79,2)            (0,0)    100,0
online retail
turnover#

TFG Africa                  536,4            400,2     34,0
online retail
turnover
excluding
Tapestry


                   22 weeks ended   22 weeks ended   Growth
                   26 August 2023   27 August 2022
                                     Rm                     Rm                       %

Group retail                 21 589,3                 19 389,3                    11,3
turnover
including
Tapestry

Less: Tapestry              (1 029,8)                  (209,4)                391,7
retail turnover#

Group retail                 20 559,6                 19 179,9                     7,2
turnover
excluding
Tapestry


# The adjustment is based on management accounts. The Group is satisfied with
the quality and completeness of these management accounts which are unaudited.

The directors are responsible for compiling the pro forma financial information
in accordance with the JSE Limited Listings Requirements and in compliance with
the SAICA Guide on Pro Forma Financial Information. The underlying information
used in the preparation of the pro forma financial information has been prepared
applying consistently the accounting policies in place for the year ended 31 March
2023.

TRADING STATEMENT FOR THE SIX MONTHS ENDING 30 SEPTEMBER 2023

In accordance with the JSE Limited Listings Requirements, shareholders are advised
that earnings per share ('EPS') and headline earnings per share ('HEPS') for the
six months ending 30 September 2023 compared to the six months ended 30 September
2022 are expected to be within the ranges reflected below:

                         Reported                         Expected

                        Six months
                          ended 30
                                          Six months ending 30 September 2023
                         September
                            2022

                           Cents              Cents                  % decrease

 Basic earnings per
 ordinary share            461,6          346,2 to 392,4         15,0 to 25,0

 Basic headline
 earnings per
 ordinary share            464,6          348,5 to 394,9         15,0 to 25,0


The expected earnings ranges have been impacted, inter alia, by the following:
   • The inflated post COVID-19 over performance by TFG London and TFG Australia
      in H1 FY2023 as mentioned above. As previously reported, TFG London’s strong
      performance, particularly in Q1 of H1 FY2023, was driven by the post COVID-
      19 recovery as employers encouraged their staff to work more from the office
      and formal events resumed. Similarly, TFG Australia’s strong performance in
      terms of both revenue and gross margins in H1 FY2023 was due to the post
      COVID-19 pent up demand following substantial closures and restrictions in
      Q2 FY2022;
   • The increased levels of load shedding in South Africa has impacted TFG
      Africa’s performance in H1 FY2024 and has led to the need to address
       inventory levels purchased for growth in the 2023 financial year through
       increased and prolonged periods of promotional activity, which has
       negatively impacted on gross margins (c.300 bps);
   •   The impact of the higher interest rates and borrowings, following the prior
       year acquisition of Tapestry and accelerated new store roll-out. TFG
       Africa’s net debt, however, has reduced by R743 million since 31 March 2023;
       and
   •   The impact of the weaker ZAR exchange rate and higher levels of inflation
       on the cost of doing business in H1 FY2024.

The information contained in this announcement, including forecast financial
information, is the responsibility of the board of directors of TFG and has not
been audited, reviewed or reported on by the Group's external auditors.

The Group's financial results for the six months ending 30 September 2023 will be
released on SENS on or about 10 November 2023.

Cape Town
5 September 2023

Sponsor:
Rand Merchant Bank (A division of FirstRand Bank Limited)