The 2018 financial year was another successful one for the Group which continued to deliver on its strategic objectives set for the year, including:

  • the further roll-out of our online offering through the launch of @homelivingspace, Exact, Foschini and SODA Bloc;
  • significant investment in the Group’s digital transformation strategy; and
  • continued investment in TFG’s international footprint through the acquisition of RAG, a leading speciality menswear retailer in Australia and New Zealand, and Hobbs, a contemporary British womenswear brand.

Gratifyingly, the Group has also been included in the JSE Top 40 index, an index with the 40 largest companies by market capitalisation, listed on the Johannesburg Stock Exchange (JSE).

I am pleased to present the 2018 Integrated annual report, and gratified to be able to report to shareholders another year of growth at TFG, as is evident from the salient features highlighted above.


TFG remains committed to the highest standards of corporate governance, with accountability and transparency being key guiding principles in all business activities conducted. The Group has a zero tolerance approach to unethical behaviour and given the potential for poor governance to result in negative outcomes, we continue to apply appropriate levels of thinking to governance execution, thereby enhancing value for all stakeholders.

Given this zero tolerance approach, the concerns raised during the past financial year regarding the audit firm KPMG forced the Group to end KPMG’s engagement as the Group’s auditors and Deloitte & Touche were subsequently appointed as auditors on 9 October 2017.

TFG fully supports the governance outcomes and principles contained in King IV™ and the Listings Requirements of the JSE. During the year the Group reviewed its governance practices, structures and processes against the practices recommended by King IV™. An application register, demonstrating how TFG is applying our specific governance structures, processes and practices in order to achieve the 16 King IV™ principles and the desired governance outcomes, is available on our website.


TFG recognises its responsibility in terms of South Africa’s transformation process. The Supervisory Board’s Social and Ethics Committee ensures that the Group has an appropriate transformation strategy, aligned with the Broad-Based Black Economic Empowerment Act (B-BBEE) and associated codes of good practice.

The Group focuses particularly on its investment in training, as a means of promoting diversity. While TFG looks at B-BBEE scoring and recognises its importance, the Group believes that what is achieved in the medium to longer term is more important than short-term targets. The focus is therefore on investing for the longer term to develop appropriate skills at every level of employment within the Group.

Economy and operating environment

The 2018 financial year was again marked by economic and political uncertainty across most of the territories in which TFG trades. In South Africa, political developments impacted the economy for most of the year while the economic conditions in the United Kingdom affected consumer spending and investment. Stronger growth performance in some of the advanced economies, particularly the United States, leads to monetary tightening which is having an impact on emerging markets. Geopolitical risks are also adding to uncertainty.

Against this backdrop, the Supervisory Board is pleased with the Group’s results, both domestically and internationally.

Looking ahead, the outlook for South Africa has improved with the inauguration of President Ramaphosa in mid February 2018. The Group is gratified and relieved that the ANC has made the decision to embrace the country’s future in a different way to the previous administration. Through Business Leadership South Africa (BLSA), we will however be watching and are willing to assist to ensure that good words become good deeds.

While the domestic and global economic conditions have informed the Group’s view on the level of debt with which it is comfortable, as a business we will continue to invest for the future, especially in digital transformation. The Supervisory Board believes that this will position the Group well for its next phase of growth and development.

Review of the year

As indicated above, the Supervisory Board is pleased with the Group’s performance during the year in difficult trading conditions.

Key highlights include:

  • a growth of 9,6% in headline earnings excluding acquisition costs;
  • a growth of 3,4% in headline earnings per share, excluding acquisition costs;
  • gross margin of 52,5%, up from 49,7% at March 2017; and
  • an increase of 44,8% in free cash flow.

Further information on the Group’s financial performance is available in the Chief Financial Officer’s report.

In terms of the Group’s strategic objectives, good progress was made on all four strategic pillars. Key activities during the year include:

  • the establishment of a TFG Australia platform through the acquisition of RAG;
  • the successful launch of a R2,5 billion accelerated bookbuild in July 2017, resulting in the issue of 17,2 million shares; and
  • the acquisition of Hobbs, facilitated by the TFG London platform that the Group has established.

Further information on the Group’s strategic performance is available in the Chief Executive Officer’s report.

Leadership succession

As was announced on SENS on 12 March 2018, Doug Murray will step down as Chief Executive Officer (CEO) of the Group on 3 September 2018 after 33 years’ service, 11 of which were as CEO. Doug’s tenure as CEO was transformational for the Group.

During this time, TFG grew:

  • turnover from R7,2 billion in 2007 to R28,6 billion in 2018 – a compound annual growth rate of 13,4%;
  • outlets from 1 332 in four countries to 4 034 in 32 countries; and
  • brands from 14 in 2007 to 28 in 2018.

This growth in the Group led to a share price increase for TFG from R52,00 in September 2007 to R223,75 on 29 March 2018, with the Group’s market capitalisation at end March 2018 being R52,9 billion.

This success was achieved through hard work, innovation and collaboration from Doug and his leadership team, both in terms of strategy and execution.

Doug’s success is not only measured in numbers, but it is also evident in his contribution to the Group’s culture and people development – key strengths of and differentiators for TFG.

Given his wealth of knowledge and experience, the Board has decided to appoint Doug as a consultant to the end of September 2019 and as a non-executive director from 1 October 2019.

The Supervisory Board expresses its immense gratitude for the significant contribution made by Doug during his tenure and looks forward to his continued involvement with the Group.

My association with Doug as a non-executive director and later as Chairman, has been productive and pleasurable. Doug’s place in the magnificent TFG story is both acknowledged and secure. He has been a transformational CEO. I extend my personal good wishes and thanks to him and look forward to continued collaboration as the Group moves into its next phase of development.

As indicated, Anthony Thunström, currently Chief Financial Officer (CFO), became the CEO Designate on 12 March 2018 and will assume the position of CEO on 3 September 2018. Anthony, who has been with TFG since February 2015, is uniquely positioned to lead the Group into its next phase of development and, together with the support of the Operating Board, will ensure that the strategic objectives of TFG continue to be met.

The process to recruit a new CFO is currently well advanced.


While signs of improved levels of confidence are evident in South Africa, the Group still anticipates a difficult economic year ahead. Measures introduced by government to deal with budget deficits, which include a VAT increase of 1%, will impact the consumer while the upcoming elections in 2019 also create uncertainty. In the United Kingdom, the unpredictability of the outcome of the Brexit negotiations also continues to impact consumers.

The Supervisory Board, however, believes that the Group’s commitment to its strategic pillars of Customer, Leadership, Profit and Growth, together with its diversification and the additional focus on and investment in digital transformation, will continue to support TFG’s future resilience and success.


I would like to thank:

  • Doug Murray, for his exceptional leadership of the Group during the year and over his long and impactful career at TFG;
  • my colleagues on the Supervisory Board for their valuable input, insight and guidance throughout the year;
  • the respective Chairpersons of the Board Committees for their dedicated effort and leadership, guidance and direction;
  • senior management teams and all of the almost 28 000 men and women who have given so much of themselves in a very difficult and uncertain year;
  • our valued customers for their continued loyal support;
  • our shareholders for their support and confidence in the future of the Group; and
  • our suppliers, advisors and business associates for their contribution to the growth of the business.

Michael Lewis

29 June 2018


TFG mourns the passing of Clive Hirschsohn, a former Managing Director of our Group, on 16 February 2018.

Clive was integral to TFG’s acquisition of the Hirschsohn-family business, American Swiss, in 1967. At acquisition, he joined the Group as Managing Director of American Swiss Jewellers. His career, spanning almost 30 years, continued to grow within the Group and he subsequently became Joint Managing Director and then Managing Director, a position from which he retired in 1994. From 1994 to 1996, he was a non-executive director of our Supervisory Board.

He will be greatly missed and all at TFG extend their condolences to the Hirschsohn family.