November 2, 2017 / 12:18 PM / a year ago

UPDATE 1-South African retailer TFG posts drop in half-year earnings

(Adds Truworths, detail)

JOHANNESBURG, Nov 2 (Reuters) - South African retailer The Foschini Group (TFG) reported a drop in half-year earnings on Thursday as the cost of acquisitions weighed and feeble economic growth hurt the nation’s retailers.

TFG has been hunting for assets in Britain and Australia as growth in its home market ground to a halt amid political turmoil and weak consumer sentiment.

The firm, which also sells jewellery and furniture, posted a headline earnings per share (EPS) drop of 2.8 percent to 482,7 cents for the six months to end-September, compared with the previous year’s 5.7 percent growth to 496.8 cents.

Headline EPS is the main profit measure in South Africa and strips away certain one-off items.

TFG bought Australia’s Retail Apparel Group this year and the company said the costs of the transaction weighed on earnings - excluding acquisition costs, headline EPS came in 1.6 higher at 504.9 cents.

Shares in TFG were up 1.3 percent at 140.62 rand, compared with a 0.1 percent decrease in the JSE’s All-share index .

Retailers in Africa’s most advanced economy have struggled to grow earnings as the nation this year suffered its first recession in eight years.

Rival Truworths International said on Thursday its sales were 3 percent lower for the 17 weeks to end October than the corresponding sales in the previous period. (Reporting by TJ Strydom; Editing by Tiisetso Motsoeneng and David Evans)

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