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JOHANNESBURG, Nov 7 (Reuters) – South African retailer The Foschini Group (TFG) reported a 3% rise in half-year profits on Thursday, a slower rate than it previously enjoyed amid “challenging” conditions in its three main markets.
The company, which owns the Hobbs and Whistles clothing brands in the UK and @Home and Totalsports stores in South Africa, has faced an ailing economy in its home market and Brexit uncertainty in Britain which is hurting consumer confidence.
Its headline earnings per share (HEPS), the main profit measure in South Africa, totalled 526.7 cents for the six months to Sept. 30, up from 506 cents a year earlier when the firm enjoyed an 8.3% rise in profits.
TFG said it outperformed the market in all of its three main territories, which also include Australia.
“TFG’s performance… was achieved in a trading environment characterised by challenging conditions, increased pressure on consumers, retail industry disruption and low economic growth,” it said in its results statement.
The company’s shares dropped back immediately after the results and stood at 173.7 cents by 1149 GMT, a 1.18% increase from Wednesday’s close but down from an earlier high of 178 cents.
It has been trying to push further into more developed economies to bolster performance amid weak economic growth in some countries on its home continent, including South Africa.
Group turnover rose 6.5% during the first half, lead by its Australian business which saw turnover growth of 11.1%. That was followed by TFG Africa, where turnover was up 6.4%.
TFG London’s turnover was flat, up just 0.1%. The company said the environment in Britain was “particularly tough”, with Brexit-related uncertainty and the collapse of House of Fraser hurting its results. The department store sold some of TFG’s brands in the UK.
Its outlook for its home market South Africa remained bleak. TFG cited a close to zero growth environment, chronically high unemployment and the ongoing speculation the country could lose its last investment grade credit rating as the main problems affecting the South African economy.
“The group is cautious in respect of its expectations for the rest of the financial year,” it said.
Reporting by Emma Rumney; editing by Jason Neely and Susan