Good morning, and welcome to our TFG 2025 year-end results presentation. We will aim to work through our formal agenda in just over an hour today. We'll then take a short comfort break and conclude with the Q&A session. I'll be beginning with an overview of our group results, together with a summary of our execution and delivery of our group strategy over the past year. It has been a busy year at TFG, but I think 2025 can be summarized in four points. The significant investments that we have been making into building our TFG Africa retail platform have landed successfully, and they are starting to deliver.
After a slow start to the year, against the backdrop of a very disrupted local and global economy and consumer, as well as a distorted H1 prior year base, we saw a significant acceleration in H2, especially in our core TFG Africa business. The combination of these two factors allowed us to deliver record group, as well as a number of record segmental results, both at a turnover and profit level. Importantly, this positive momentum has largely continued post our year-end. It has been a tough year for our customers. Interest rates remained stubbornly higher for longer than we expected, which intensified cost-of-living pressures and further eroded their propensity to spend on discretionary items, against a backdrop of close to zero economic growth. Fortunately, a number of these headwinds did start to ease, albeit gradually in the latter half of the year.
We saw interest rate cuts in all of our major trading geographies. Inflation and its impact on the cost of living started to abate, and some of the geopolitical tensions started to ease, especially in South Africa, where we saw a marked improvement in consumer confidence and spending patterns post the formation of the GNU. The South African consumer also benefited from the two-pot liquidity injection that really started to flow in Q4. Whilst these more recent positive developments are obviously welcome, they did come late in the year and thus did not make a material impact on our results. Looking ahead, I would hope to see the annualization and acceleration of some of these tailwinds. However, we remain in the midst of a relatively unprecedented level of global uncertainty and volatility, and this is unlikely to have a positive impact on our consumers.
Against this backdrop, we grew our group revenue by 4.1% to a record ZAR 58.3 billion. We continued to expand our gross margins in a constrained market by 150 basis points, from 47.9% to 49.4%. A very disciplined focus on our operating expenses, whilst nonetheless continuing our deliberate investment into our business for the future, allowed us to achieve operating leverage with a 5.2% growth in our group profit after tax. Our headline earnings per share came out at 1,015.6 cents per share, ahead of where we thought we would land just a few months ago. We declared a final dividend of 230 cents per share, a growth of 15%, which takes the total dividend for the year to 390 cents per share, an increase of 11.4%. We also closed the year with a very strong and healthy balance sheet, which Ralph will shortly unpack for us.
2025 was certainly a year of two very different halves. During the first half, we were up against an artificially high prior year base. In a relatively high fixed-cost business such as ours, this would typically create significant negative draws in earnings leverage. However, we were able to expand gross margins and tightly control expenses to limit the EBIT and profit after tax contraction to a negative 3% and 4%, respectively. During the second half, the base normalized, and we traded very strongly and well ahead of the market, with top-line growth of 8.7%, further gross margin expansion, and a very pleasing 12% growth in H2 profit after tax. Looking at the full year results from a geographic perspective, it is clear that TFG Africa outperformed this year, contributing 72% of group revenue and 75% of group EBIT.
Our offshore businesses continued to face real consumer headwinds without the GNU or two-pot tailwinds we enjoyed in South Africa, but nonetheless still contributed meaningfully to our overall group results. We have an internationally diversified business with nearly 5,000 outlets across 23 countries. Every geography goes through cycles, and whilst it was Africa's year to shine, two years ago, it was our offshore operations that were doing the heavy lifting, whilst we had to contend with load-shedding. TFG Africa achieved record revenue in EBIT, and TFG London achieved record revenue with the inclusion of White Stuff for just five months, and they came within a whisker of a record underlying EBIT as well. Even in the case of Australia, which has faced the hardest climb of their post-COVID record performance, the business is still producing numbers in line with or ahead of their pre-COVID levels.
Given the extent of both global and domestic disruption over the past five years, it's very interesting to contrast TFG Africa's current performance against the prior FY2019 to FY2024 period, which was heavily impacted by both COVID and the load-shedding in South Africa. Over a tough five-year period, we continued to take market share, increasing sales at a 12.4% CAGR, invest meaningfully through the cycle in strategic imperatives such as BASH and our Riverfields distribution facilities, and yet still grow earnings, albeit at muted levels. Contrast this to FY2025, where we saw muted top-line growth, significant gross margin expansion, and really pleasing operating leverage to deliver a 12.3% EBIT growth. Again, very indicative of what this business can produce since Black Swan events.
The key driver of our current year TFG Africa growth, and even more so in respect of the second half, was once again clear market share gains in what is a stagnant market. In H2, we grew by 8.2%, with strong market share gains against our largest listed competitors who grew by 5.6%, and we did so without giving up any margin. The contrast is even greater if we compare our growth to the Stats SA numbers, which include the entire market, which showed a paltry 1.6% growth for apparel and footwear and a negative 0.8% contraction for homeware and appliances. Taking a longer perspective, Investec recently published an analysis of listed apparel growth, excluding acquisitions in South Africa since 2019.
We have in the past been accused of growing through acquisitions, and whilst acquisition and capturing a greater share of our customers' wallets remains core to our strategy, it's gratifying to note the outperformance of our core business. It's clear to see who's been winning. In conclusion, I think that we are satisfied with our operating and financial performance this year, especially during the second half. These results, however, do not simply happen by themselves, especially during a no-growth period. They are the tangible output of a number of years of diligent execution and delivery of our BOLT strategy. I will briefly highlight a few of our most material strategic achievements during the past 12 months. In terms of the B for build-out of our various brands and businesses, we delivered very strong operating leverage and results across every one of our Africa stacks.
Our leading sports stack, despite having muted top-line growth in what is a cyclically difficult segment globally at present, delivered an outstanding 10% profit growth, as well as landing the successful rollout of the JD Sports business in South Africa. Our already leading menswear stack grew turnover by a further 3%, but encouragingly, again grew profits by 9%, with particularly pleasing results from Markham and Relay. Our specialty stack, comprising home, furniture, and jewelry, had a fantastic year, growing turnover by 7%, underpinned by very strong performances in jewelry and the Tapestry brands, to deliver an 11% profit growth. Our womenswear stack continued to grow well ahead of the market at 8% and delivered an exceptional 23% profit growth on the back of better gross margins and further upside from our in-house vertical quick response manufacturing that is really starting to come into its own now.
Saving what I think really is the best performance for last, our relatively new value stack had a fabulous year, growing profits by 38% on the back of materially better gross margins and the non-renewal of a number of suboptimal leases or foreclosure-impacted 1% turnover growth. It's very seldom that all the horses come in at once, but this was a year when they did. In terms of building out our store base, we added 169 new stores and outlets through the White Stuff acquisition effective October 2024. We also opened 181 brand new stores across our different territories, and we revamped another 132 stores. Whilst we continue to see a long runway ahead for new stores, we remain focused on further improving trading densities to help deliver further operational leverage. The direction of travel is very encouraging, and we see further improvements here over the next couple of years.
After two years of intense research and development, we have now started to rollout our own beauty brand offering, and this can already be found in various iterations in more than 50% of all of our TFG Africa stores, with a further rollout to another 350 stores underway. Our beauty customer remains extremely valuable to us. They shop more frequently, their basket sizes are large, and they thus spend more with us. Given beauty's over-indexation online, the benefits of our BASH platform, as well as the enhanced margins on our own beauty brands, this is becoming an increasingly interesting and profitable segment for us. For anyone who hasn't been into one of our Jet stores over the past six weeks, we started to rollout our value beauty offering, and this is what it looks like in our Jet stores today.
This really is a very compelling beauty offer. Until recently, I would have argued that Primark probably do this better than almost anyone else in the world. I think our beauty and Jet teams have done something even more special here. Speaking of Jet and value, what a year. In 2020, we were not even a player in the increasingly important value segment in South Africa. We then acquired Jet in the middle of COVID. Jet became profitable from year one, but a lot of hard work would be required to get Jet closer to its potential. We moved Jet off 90 outsourced IT systems onto TFG systems within six months. We stabilized and then reconfigured their supply base, and then had to wait out the first three years from a lease and cost perspective in terms of the conditions attached to the acquisition.
We subsequently exited 40 marginal leases, renegotiated the remaining leases, and addressed an inflated cost structure. 2025 was the year when we were able to pull all of this together. During the year, we revamped 21 stores, which have subsequently traded 17% up in turnover and above that in gross profit and overall profitability. Our apparel gross margin improved to 40.1% and our homeware margin to 40.2%, both of which have a pretty clear path towards a 43%-44% range. Looking ahead, we'll be revamping at least another 25 Jet stores this year, as well as opening 11 new Jet stores and five standalone Jet home stores. 2025 was also the year that we started to rollout the JD Sports franchise in South Africa. JD Sports remains the number one sports lifestyle retailer in the world, and we're incredibly proud to be their partner in South Africa.
We've opened three stores over the past six months: Canal Walk, Eastgate, and East Rand Mall, and they were trading ahead of expectation. We have seen that JD attracts a different customer, in part due to a high degree of JD exclusive product, and this has had almost no cannibalization across our existing sports offerings. We'll be opening a new flagship, JD Sports in Sandton and Jabulani, followed by Waterfall in November, with another six leases currently being finalized. Our initial view of 50-60 stores over a five-year period remains intact. Despite the difficult trading conditions in the U.K., Justin, Emma, and our U.K. team haven't been sitting back.
During the year, after an extended period of looking for a suitable bolt-on high-growth acquisition to strengthen their portfolio, they identified and successfully concluded the acquisition of White Stuff with an effective date of 25 October 2024 at a very sensible price. In fact, White Stuff added GBP 81 million, over ZAR 2 billion, to our U.K. turnover in just five months, was immediately accretive, and grew by 20% over the period that we've owned them. All of this equates to a very digestible four and a half times earnings multiple. The casual lifestyle category continues to significantly outperform the rest of the U.K. apparel market, with most of their peer group posting circa 10% growth over the past 12 months.
Looking forward, there's a clear growth path for White Stuff, margin upside, as well as a newly established scale in the U.K. to allow for the completion of an integrated U.K. retail platform in line with how we operate in TFG Africa and TFG Australia. In terms of the O for Optimize in our BOLT acronym, we completed the construction and commissioning of our 75,000 sq m Riverfields distribution center on schedule and within budget. All of our apparel brands are operating from the DC, we are in the process of ramping up our fine pick e-commerce fulfillment capability at Riverfields, and we will be launching our centralized beauty distribution in August this year. It's still early days, but Riverfields remains the key to our demand-led supply chain capabilities. It's hitting its key business case KPIs, and it's already starting to contribute towards improved gross margins.
In respect of the alpha leverage, we've completed our proof of concept of our BASH-enabled omni-selling in stores as we work towards our goal of never missing a sale. The results to date have been very promising, with an AOV of two times the average store sale, a 73% click and collect rate, with 97% of these omni orders being truly incremental. The technology works. The work that now needs to be done is the change in performance management across nearly 4,000 TFG Africa stores. This graph demonstrates the point very clearly. The trend line since we launched looks fantastic, but you can see the significant drop off in omni sales in January and February. Why, you may ask? The simple answer is this is when we typically have harshed off churn in our stores post our peak period. Lesson learnt.
Looking forward, these capabilities, both technological and human, will result in significantly less lost sales, higher margins, higher densities, and a further strengthened and integrated retail ecosystem. We will be rolling this out to a further 2,500 stores by FY2028. We also continue to leverage our TFG rewards base, which is now approaching 40 million South Africans, having added a further 2 million additional rewards customers over the past year. Simply put, our rewards customers come back more often, and they spend more. Importantly, the unrivaled scale of our rewards base allows us to expose newly acquired or incubated businesses to the largest rewards base in the country, exactly what we've done with great effect in respect to the Jet and Tapestry businesses. The TFG rewards program also continues to be recognized as best in class, both locally and internationally.
Most recently, TFG Rewards won both the Best Use of Technology and the Global Leader in Loyalty Innovation at the International Loyalty Awards in Dubai last month. In respect to the T for Transform, BASH continues to lead and dominate in the South African fashion and lifestyle e-commerce space. BASH is comfortably the number one store for every one of our brands. It's increasingly capital light, has had 8.1 million downloads of the app alone, it grew by a further 43% for 2025, and broke through into profitability nearly two years ahead of plan. BASH appeals to our entire customer demographic, but importantly, it's capturing the imagination and the loyalty of a whole new cohort of younger customers who will become our key customers of the future. Our first-time BASH customers grew by 34% over the year, and our multi-brand orders increased by a further 15%.
Putting the sexy e-commerce growth piece aside for a moment, BASH also delivered extraordinary efficiency. Our own last-mile BASH delivery grew to fulfilling more than 30% of our orders, whilst being 34% cheaper than third-party delivery options. Financially, we achieved mild profitability two years ahead of plan as the benefits of scale start to filter down through the P&L. That said, we acknowledge that BASH sales are now more than 5% of our total TFG Africa sales, and despite the joys of profitability, they are not yet contributing towards the 10%-12% operating margin that the rest of the business generates. There is still much work to be done here, but we are heading in the correct direction, and the margins will start to scale. Let's have a quick look at how BASH developed over the past 18 months.
In 2023, we launched BASH, the mall in your pocket built to change how South Africans shop. Today, it's more than an app. It's a growth engine, a service layer, and a platform powering performance across TFG. This year, we've scaled without adding stores. BASH delivered ZAR 2.1 billion in revenue, the digital equivalent of 195 stores, that's 64 new retail endpoints added with no leases, no build-out, and no inventory risk. With scale, we deepened customer experiences. Online customer sentiments reached 90%, and customer retention increased by 26% in just 13 months. We delivered even more. BASH delivery now handles over a third of all parcels, 1.5 million a year. It's 34% cheaper than third-party couriers, and 59% of orders arrive in under 48 hours. Better service at lower cost. This year, we made checkout simpler, easier, faster.
With Apple, Google, and Samsung Pay, and BASH Pay in store, checkout now takes just five seconds. This is just one deployment rolled out instantly to every customer, like adding a floor to every store without laying a brick. Our in-store technology enables stores to sell more than what's on the floor, connecting our customers to our full assortment in real time from inside the store. In just 18 months, it's gone from a proof of concept to a high-growth engine, with projected sales this year of ZAR 350 million from 1,800 stores across the country and a return on investment of 215%. AI is powering how we scale, from the shopping experience to post-purchase support. Our assisted shopping agent, Clarity, delivered a 3.3% revenue lift with 17.9 times return. Our customer support agent, Baxter, now handles returns end-to-end without human touch points. It's scale that's intelligent, not just automated.
Beneath the surface, we've built new omnichannel infrastructure that will power TFG into the future. OmniPlus puts real-time data in the hands of our store teams, turning insight into impact. From in-store to app to desktop, your cart now moves with you across all channels. We redefined brand reach, hitting 8.1 million app downloads and 1 million followers on TikTok, making BASH the first South African retailer to exceed 1 million on TikTok, while BASH also drove 48% of incremental South African retail turnover. This year was all about margin multiplied. Each incremental rand delivered 25 cents in profit, and we avoided ZAR 1 billion in store CapEx and tied up stock. BASH isn't just lean; it's leveraged. What's more, we've exceeded expectations by reaching break-even two years ahead of forecast, proving that we're more than a mall in your pocket.
We're TFG's omnichannel engine powering over 3,500 stores and more than 20 iconic brands. Together, we're building the future of TFG with a platform built for connected omnichannel experiences. Retail is entering a new era, and this is just the beginning.
BASH is already, and increasingly so, a very, very valuable asset to the group, and we look forward to delivering even more over the next couple of years. In respect of the S for Sustainability, TFG continues to bat above its weight. I would like to share a few of the sustainability achievements that we've recently landed. Over the last two years, we've more than doubled our sourcing and use of sustainable cotton, with material positive outcomes for both the environment and the communities that produce this cotton.
In terms of supply chain mapping, we've made great progress in terms of our tier one factories, our tier two textile suppliers, as well as in respect of a growing proportion of the textile suppliers to our third-party suppliers. The aspect of ESG that I, however, remain the proudest of is the extent of TFG's contribution to the economy and the people of South Africa. This year, we again retained our level two triple B double E rating, which requires some real intent and which is well ahead of the rest of SA retail. This rating is important to us because it is probably the best measure of what we contribute and give back to our people and their communities, in many cases, the very same people who are our customers.
We also created more than 4,000 new jobs and workplace opportunities, many of which are linked to our own local production of furniture and apparel, with our local production of apparel now exceeding 80%. Hopefully, this provides a snapshot of what we have been focused on and delivering against for the last 12 months and how all of this is translated into the results that we produced. Ralph will now take us through the details of our financial performance at both a group and Africa level.
As you've seen from Anthony's slides, the second half of the year was noticeably better than the first. In South Africa, we saw a significant improvement against what's now a normalized base, with accelerating growth in both sales and gross margin and further leverage to net profit. There was some help from the introduction of the two-pot retirement system in Q3, but the economic tailwinds expected after the elections did not fully materialize. All our teams have been focused on gross margin achievement and profit-protecting cost-saving initiatives. In the U.K., we completed an exciting acquisition of White Stuff in late October, and that brand continues to record sales growth in the teens, while our other U.K. brands continue to be impacted somewhat by a weak U.K. economic print. Our Australian operations faced another year of tough trading conditions, with high interest rates and living costs impacting consumer spend. It was a mixed performance in the second half, but cost savings ensured the business still returned an impressive and market-leading double-digit EBIT margin. We have ended the period with healthy inventory across all geographies. In South Africa, it is higher for two reasons.
Firstly, we ended the prior year far too light, and at this end of the year, Easter fell into April. Our store program continued to focus on revamps, with fewer new stores resulting in lower capital expenditure this year. Finally, we've declared a final dividend of 2 30 cents per share, up 15% on last year, with our total dividends for the year up 11% and the cover reduced from 2.75 to 2.6 times headline earnings. Looking at the group highlights, there are various moving parts and base effects and two non-comparable points to consider: the second-half growth normalization in TFG Africa and the White Stuff acquisition in the U.K. Turnover and gross profit need some unpacking, but margins up 150 basis points to 49.4% for the full year. That's slightly lower than the 220 basis point improvement we recorded at the interims as the base normalized in Q3.
EBIT margin has ticked up to 10.7%, and EBIT, which was 3.4% lower at interims, finished up 4.4% for the full year. Profit before tax just off that due to a full-year IFRS 16 charge on the new DC. Headline earnings per share down 5.6% in H1, landing 4.6% up with the stronger second half. Group return on capital employed is broadly flat on the prior year, but it's a measure that we are particularly keen to see move higher with stronger earnings momentum and good capital allocation. Finally, net debt at one times EBITDA more than acceptable, especially as most of that sits in South Africa and provides a natural hedge against the debtor's book. I'll now take you through the group's performance on a segmental basis. A strong performance from Africa, turnover growth impacted by the H1 base effect.
The real number to look at here is the 7.6% increase in GP and a 12% increase in EBIT, and I'm going to break that down further into the two halves just now. I'm not going to say too much about London and Australia, as Justin and Dean will talk to their own numbers. Just in summary, London turnover in GP significantly up with the White Stuff acquisition, which was in for just five months. Gross margins and costs managed well, and despite the weak economic print, this business is still generating over half a billion ZAR in profit for the group at a not unhealthy 7% margin. White Stuff has been accretive from the start, and it's still experiencing double-digit growth and with a fair degree of runway still to come. In Australia, a very similar story with tough economic conditions.
Top line under pressure, a slight contraction in gross margin in a highly promotional market, but costs well controlled. This is a business that is in fundamentally good shape and generates almost ZAR 1 billion for the group in hard currency at double-digit profit margins. A lot to look forward to here. It's been challenging, but we've had two interest rate cuts now in the last four months, and after a tough April, they've had a stronger May. Just a quick look then at H2 for Africa. You can see the largely normalized sales growth of 7%, but again, that GP growth of 8.4% is a better reflection of activity. We're seeing leverage right the way through to EBIT with profit growth at a very decent 17%. London, you can see the positive impact of White Stuff in for five of those six months.
The underlying business still under pressure in H2 with sales back 9% in the second half, but we've seen some areas of improvement since year-end. Australia, not an entirely different picture in the second half. A poor March impacted Q4, some uniquely Australian weather there, but again, we've seen an improving trend into May. These are the pertinent features of the group balance sheet. I'm going to talk to the Africa inventory and debtors book numbers shortly, and Justin and Dean will be analyzing their own key metrics. Not much to say at the aggregate level, except again, we're very satisfied about how we've managed stock levels. The stock turn at 2.3x-2.4x reflects a diversified retail business. Sports, beauty, jewelry all have slower turns than apparel, but it's a fresh position.
Whilst there is room for improvement as we roll out our DC holdback strategy in Africa, our London and Australia operations both have heavier inventory models that suit those businesses, and we're happy with the freshness of the stock in all locations. Our debtors book in South Africa is in good shape, growing 7.3% to ZAR 8.9 billion, with all key metrics improving. Group net debt is ZAR 2 billion higher now. London funded its acquisition. We're sitting on excess cash in Australia, and in TFG Africa, the borrowings are effectively funding the debtors book, which brings me on to the group cash flow. The movement in net working capital is due to both White Stuff and the stock normalization in Africa. In fact, if you look at working capital across two years, the movement is just ZAR 400 million, and the two-year cash conversion ratio is a very healthy 88%.
There on the end, you can see the ZAR 1 billion acquisition of White Stuff, and that's really the picture. Onto TFG Africa then. We've already looked at the full-year P&L and the H1, H2 split. There's the 12.3% profit growth, and you can see that the growth before and after tax is better still, but there are still too many moving parts here. Let's make this a little cleaner. Let's first clear away last year's numbers and look at financial services. That's the credit operations that Jane will talk to, but I'm also including here our insurance business. Certain aspects of our value-added services business remain in retail, such as our very significant publishing business and things like ongoing revenue from SIM cards.
Looking at the financial services numbers, other net income from financial services, that's interest and fees from the book, up 3.5%, and the net bad debt charge, write-offs and movement in provisioning, is down 0.4%, resulting in EBIT up 6%. An allocation here of finance charges. I talk a lot about how our borrowings provide a natural hedge against the debtors book. What I've done here is to assume the book is 70% geared, and I've allocated 70% of the interest. That results in our financial services activities generating ZAR 500 million and a very healthy 17% return expressed over the 30% assumed equity balance of funding. We're very happy with that, and we see potential for additional value-added services to expand those returns even more. This leaves us with a clearer picture of our retail performance and the growth on last year.
We've spoken about sales and margin, other income no longer containing credit and insurance income, and a cleaner view of retail expenses. Up 7.6% here, but there's been an accounting reallocation between other income and expenses, so expenses have only really grown 5.6%, and I'll unpack that later. EBIT up a very pleasing 14.6%, and with the finance costs now predominantly just the IFRS 16 lease charge, you can see profit before tax for retail is up an even more impressive 21%. I'm now going to split this even further between stores and online in a way that shouldn't come as any surprise, as you know that our online sales are 6% of total and growing at 44%, and we've been guiding that BASH was forecast to break even this year, two years earlier than planned.
Indeed, BASH itself produced a profit this year, but I'm using a broader definition of online to include other retail costs that reside within our product teams relating to planning and marketing activities at the brand level. I'm sure you can see from this view there's likely to be significant leverage now as online achieves scale. Although we're not shy about our continued investment in technology and employing the very best engineering skills to develop the platform further, whether that's new product development, value-added services, or simply the continuation of our very important omnichannel journey. Return on capital for the retail business is 13.4%, a number we see having considerable room for improvement over the next few years, driven by a slightly more favorable economic environment, but with plenty of self-help with the fruition of our strategic investments and carefully considered capital allocation in stores and technology.
Returning to the full TFG Africa segment, just a quick look then at the trend lines over the last five years. COVID and COVID recovery now receding into the past. Load shedding, hopefully the worst is over, and a lot of strategic heavy lifting completed. Tapestry's in there, as is debt. Gross margins normalized, and we believe we can continue to drive further leverage to improve the EBIT margin further. Expenses look to be higher than in the prior period, but this is a function of that base effect where last year's first-half sales were higher with the clearance activity. If you strip that out, last year's cost-to-sales ratio was actually slightly higher than 38%, so actually some improvement this year. That is clear from the table below.
With like-for-like store expenses of just 1.3% growth, a reduction in depreciation of the fleet as we held back on new stores and with store occupancy employee costs generally in line with inflation. There is the comparable 5.6% growth on the prior year too, with the accounting reallocation now backed out. Capital allocation for Africa, or capital expenditure for Africa, is just over ZAR 200 million lower for this year, with 82 new stores against 121 last year, excluding the Street Fever stores acquired. The Riverfields DC is now substantially complete. In this new year, we are looking to open over 120 new stores, but the logistics investment will now drop off. IT spend is likely to be similar, with investment in new planning and credit platforms. We are looking at somewhere between ZAR 1.5 billion-ZAR 1.75 billion for 2026.
As mentioned, inventory levels have now fully normalized, and you can see from the stock turn and health indicators that we're in good shape. The increase from last year is really a function of us ending up too light at that point, having to chase stock at the beginning of last year's winter. This year, it's the opposite, with inventories carrying Easter product, which moved into April. Finally, an update on our recent acquisitions. Tapestry, despite a difficult homeware environment, increased turnover and profit by 11% and 12% respectively as we continue to invest in store openings across the portfolio. Another stellar performance by Jet in this period. Sales flat after more right-sizing and refreshing of the portfolio, and profit up 38%, confirming our previous guidance that this business is continuing to generate significant growth in earnings for the group.
Last year, when we released our 2024 results, it had been a week since the national elections, and we were still a week away from the formation of the GNU. What a difference a year makes. Despite the economy in South Africa unlikely to improve by as much as we had hoped, with latest GDP estimates now a little over 1%, we are now seeing proper sales growth, nearly 10% since year-end, with more store openings to come, and that gives us the operating leverage we have not experienced for many years. With that, it is over to Jane.
Thanks, Ralph. How is the world of credit looking? Demand for store card credit is still incredibly strong, and we received almost 3.9 million applications in this financial year. We have maintained our accept rates at 20%, which is up from 18% last year. As a result, credit turnover for TFG Africa has increased by 5.6%, which is nearly double what it was this time last year. The graph shows you the contribution of turnover split between new accounts, or those less than 12 months on book, and existing accounts, as this is incredibly important when we look at the performance of the book and the impact on provisions. I'll show you more on this on the next slide. Turnover from new accounts has increased to over 28% in this financial year versus 26% in the prior financial year. We've also shown the importance of credit for businesses that we acquire. Jet is already one of our highest credit businesses, with credit sales of ZAR 1.5 billion, which is up from 5.6% last year.
The contribution of credit in the Jet business is around 26%, and our expectations are to keep it around this level. Credit is now also alive in our Tapestry business, and we have seen this grow by over 22% in the last financial year. With the credit contribution at just below 10%, we believe there's still a lot more room for growth, and we expect to get this credit contribution to around 20% in the years to come, similar to our at-home business. Overall, our account base has grown by just over 3% to 2.9 million accounts, and our gross book has increased by 6.3% to ZAR 10.9 billion, which is greater than our credit turnover growth. Of course, book growth is driven by more than just credit turnover growth. It also includes our VAS billings and credit interest and fees.
The health of our book is looking incredibly well, and when considering our debtors book balance, almost two-thirds of our book is fully up to date with our installments, the highest year-end proportion on record. The percentage of accounts that are in a buying position is 82%, up from 81% last year. The percentage of accounts that are overdue is down to 12.1%, and our write-off growth is actually negative year on year, all of which means you would expect to see an improvement in our net bad debt ratio, which you do, down to 12.8%. Now, you might expect, given all the good news, that the provision ratio would also improve, whereas that has only marginally increased by 10 basis points to 17.9% compared to our half-year. Provisioning, of course, represents the future, and it's dependent on the composition of the book.
Given that new accounts represents a slightly higher proportion of our book versus a half-year, and new accounts naturally have a higher provision, this means that our provision ratios have slightly increased. At 17.9%, this is still below the levels experienced in previous years, and 80 basis points below the previous financial year. Our expectation is that the provision level will increase marginally in the new financial year as we continue to experience good new account growth. How does this all look when we start looking at the EBIT for the credit division? For a start, the figures I have shown here are the standard way I have always reported the credit figures. For example, there is no cost of funding in my figures or assumed gearing of the book.
Looking at income to begin with, during the course of this last financial year, there was a number of interest rate decreases. Whilst this is great for our consumers, it does impact our credit income. Despite a higher accept rate than last year, resulting in an 11% year-on-year growth in new accounts, income for the credit division only increased by 3.8%. The good news is that we had such a great result in our bad debt numbers, as our write-offs were better, our provision requirement improved, which has resulted in a reduction of our absolute bad debt numbers. Combine this with keeping our trading expenses under control, we have therefore managed to increase our EBIT by 10% year-on-year, and our year-end EBIT is ZAR 788 million, which is our highest ever. Overall, a great result. Thank you, and over to London.
Super, thank you very much, Jane, and a big hello from Emma and I talking to you from London. We're going to talk you through the TFG London results. Overall, as we talked about in the half-year, consumer confidence has continued to be tough. It's trending negatively. If there's a positive there, it's slightly above its longer-term average. The overall macro, in terms of the economic and the geopolitical factors, are really weighing on the consumer mindset, and her discretionary spend is under pressure, with the exception possibly of the travel sector. There are some positive trends, and Emma's going to talk to us about those later, and we've got a slide on the White Stuff acquisition, which we're really pleased with. I will hand you over now to Emma, and she'll take you through the numbers.
Thank you, Justin. On top of the economic factors Justin has talked to, for the first half of this year, we were also heavily impacted by supply chain disruption. Our teams continue to focus on our three key pillars you can see on the screen, underpinned by our strategic foundations of operating responsibly, efficiently, and leveraging the TFG London platform we continue to build. These foundations have helped to deliver margin percentage growth, and the addition of White Stuff into the group from October means we have maintained our prior year EBIT of GBP 26 million. The second half of this year has been better. Gross profit stepped back 1% for the year, excluding White Stuff, against a turnover decline of 8.6%, and costs have been managed despite the inflationary headwinds. All brands have shown improvement in full-price sales, overall going from minus 11% in half one to plus 3% in H2.
Our own stores and our website continue to outperform the other partner channels, and where we have enhanced the store experience, we are seeing double-digit like-for-like growth and increased new customer acquisition. We have also opened our first 10,000 sq ft larger format store, housing all the legacy brands in Liverpool, and we've got more of these in the pipeline for this year. With only five months of White Stuff within these numbers, the opportunities from joining the TFG London platform are still to come. Volume-led efficiencies, shared insights, new markets, and supply chain optimization are all on our roadmap for 2025. Additionally, the full-price trend we saw in H2 and the year-on-year margin growth you can see on the chart has continued into Q1 of the new financial year.
As I mentioned in the H1 results, our stock position is in a better place, and we closed the year with a 7 percentage point improvement in currencies and stock mix. The addition of White Stuff adds to the absolute number here; however, the improvement in aging and in margin is driven by all of our brands, and this outcome is a credit to their resilience in what has been a challenging trading period. Now I'll hand back to Justin for an update on the White Stuff and the forward outlook.
Great, thanks, Emma. Some real positives there. Talking about White Stuff, it was the brand that we acquired at the end of October last year, and as we said at the time, it provides a real level of diversification for the existing brands that we hold within TFG London. We couldn't be more pleased with the results. The team are fantastic. Their customer acquisition and customer growth has been superb and has really continued, if not accelerated, post-acquisition. We are really pleased with the results. Looking forwards and looking at the overall outlook for the U.K. market, we do remain cautious. Uncertainty is the buzzword, and our focuses will continue on our strategy, and they will be maintaining an amazing customer experience, which is the real DNA of TFG London, elevating our brands and our product, and optimizing our channels. Underpinning all of that, we have an amazing team in London, as Emma said, and I would like to take this opportunity to thank them all for their contribution to the results this year. With that, I am going to hand over to Dean and Troy in Australia. Thank you.
Thank you, Justin and Emma, and good morning to everyone. It's Troy and Dean here again, joining you from Sydney with the Australian update. I will cover the financials, and Dean will provide more detail on operating context as well as outlook. Firstly, looking at performance. In the first half update, we noted the continued challenging environment in Australia, with low economic growth as well as low consumer confidence. These conditions remained throughout the second half of the year. The market remained promotionally led, and we were focused on maintaining a relative position and market share. However, we did see some improvements in trade in the second half and achieved record sales numbers during Black Friday and Boxing Day events. Despite a cyclone on the East Coast in March, which resulted in the closure of almost 20% of our stores for several days, we were still able to achieve positive like-for-like sales growth in some of our brands.
EBIT for the second half was down 12.6% compared to a negative 18.3% in the first half. Overall, we were pleased with the improved second half result, which was driven by a slightly more stable market and continued cost control, resulting in an EBIT margin above 10%. I will now hand over to Dean, who will provide more context on performance.
Thank you, Troy. Now let's turn our attention to the overall trends. We have used this slide at numerous updates to talk about the COVID-impacted period in Australia, which, as we have said before, resulted in the peak profit result of financial year 2023, which in that year had five years of growth in 12 months. Of course, subsequent to financial year 2023, management has been very tactical and strategic in managing the business back to normalized levels. How are we doing? Last year, we reported that the business had not yet bottomed out and that the outlook would be tougher for longer. Now that that year is complete, we're pleased to report that the team has managed to stabilize sales, stabilize gross profit, and reduce and manage the cost of doing business to deliver an above-average EBIT percentage and a very pleasing result. Now, whilst we have had a couple of negative years of growth, this was anticipated and well-managed. In fact, current EBIT actually represents a cumulative average growth rate of 8% over the last seven and a half years since acquisition, and our EBIT percentage remains above the 9-10% pre-COVID average. Now back to you, Troy.
Thanks, Dean. Now looking at inventory, we successfully managed the balance down from financial year 2023 as the market slowed. The current balance is up versus the prior year due to some timing and new stores as part of our growth initiatives. Inventory quality remains strong, consistent with the prior year, approximately 85% is current season, and over 40% of that is core, which is product not linked specifically to a season. Our inventory health has allowed us to be more disciplined with promotions and to decrease markdown activity in the new financial year in what is still a highly promotional environment. We remain very happy with the inventory balance. Back to you, Dean, for the outlook.
Thanks, Troy. At our last presentation, we left you with the expectation that Australia had not yet bottomed out and would remain tougher for longer. That did, of course, eventuate. Now, in terms of the outlook, despite the ongoing challenges with the underlying cost of doing business and relatively slow economic growth, there are signs that the economy is improving. Unemployment remains low, interest rates have started to decline, and real wages are seeing signs of growth. As a result, the economy is starting to show initial signs of improvement, and we are optimistic about the year ahead. Finally, I'd like to say a quick thank you to the team for their continued commitment and resilience. Thanks to everyone. Thanks, Troy, and back to you, Anthony.
Thanks, Dean and Troy. I'll now wrap up the formal part of the presentation with a summary of our strategic focus and outlook for the new year. We have been investing in a number of strategic building blocks that underpin our business for several years. We've been doing this consistently and through the cycle with the belief that this is what is required to build both a sustainable and winning business into the future. The evidence of these efforts is most obvious in our TFG Africa business, where we increasingly recognize ourselves as a retail platform, where we aim to deliver more than the sum of the individual parts and brands that we own. To give some sense of the scale of what we've created, we have 39.9 million people on our rewards program, the largest of its kind in South Africa. We have a wide-ranging physical presence covering the vast majority of South Africa and Zambia through more than 3,600 stores.
We can achieve this scale and footprint because we have 28 diversified, high-brand equity brands supported by 28.4 million social media followers, a credit book with more than ZAR 10 billion in open to buy, and a digital powerhouse in BASH with more than 8 million app downloads. We are able to successfully compete with the best international operators who've arrived here, in part due to our local sourcing and unique quick response manufacturing capabilities. During the past year, these collective assets have attracted more than 520 million people into our stores and generated more than 250 million online sessions. There simply is not another retail platform like this in Africa. Because of the strength of the retail platform that we have created, we have an enviable range of organic and inorganic growth opportunities over the next five years or so.
Every one of our brands and retail stacks have detailed, measurable strategies to continue to grow their businesses successfully and profitably into the future. Over and above this, we recognize a number of growth opportunities that lie outside what we would describe as business as usual. As you see, these opportunities are large. We shared some of these opportunities with you previously, and as at the end of FY 2025, we are still comfortable that the opportunities are real and, importantly, that we are on track towards achieving them in the medium term. In some, I have no doubt that we will overachieve. In others, we might not quite get there. However, this is the direction of our travel. In terms of our international businesses, we also have very clear strategies and plans for the future.
For TFG London, it's going to be about trading our existing brands as well as the market will allow, whilst continuing to expand what we can control, our own channels to market. We will continue to integrate White Stuff into our evolving U.K. retail platform and work the levers to lift their gross margins. TFG Australia will continue to focus on trading their core brands in what remains a tough market and the rollout of the internally developed Excellent co-brand. Both the U.K. and Australian businesses would benefit from further scale and bolt-ons, and the teams remain on the outlook for suitable opportunities. In terms of post-year-end trade, we've generally seen positive momentum across our regions. For TFG Africa, turnover growth continued to accelerate through April and May. For TFG London, whilst underlying trade remains relatively tough, the continued positive impact of White Stuff serves to counter this.
For TFG Australia, April was negatively impacted by holiday shifts and new trading rules on the ANZAC Day. However, May saw a return to positive growth momentum. In conclusion, I'm very excited to be able to share that we will be hosting our first-ever TFG Capital Markets Day in Q3. Whilst we really do try to share as much information about the various parts of our business and our various brands and operations, we know that we are a big business with a lot of moving parts and that it is nearly impossible to share as much as we would like to in these relatively short results presentations. Our Capital Markets Day will provide more time and perspective for us to take you through the key parts of our business and our operational and financial strategies for the future.
In closing, I would like to thank our teams in Africa, the U.K., and Australia for their collective efforts in delivering this year's results, as well as all of our customers who continue to support TFG and our brands. We are now going to have a five-minute comfort break, and then we'll return thereafter for Q&A.
Welcome back, everybody. We're about to start the Q&A session and have already received a number of questions. To kick off, a question for our U.K. team, Justin and Emma. What was the White Stuff operating margin for the first five months?
It was under the U.K., it was under the TFG London EBIT number, but we're really clear there's another question coming later. We're really clear on the building blocks of how to actually get that to the TFG London level and if not above. It is a good first period, but there is definitely more opportunity there.
Thanks, Justin. I think particularly in terms of gross margin, but we will see how that evolves. The next question relates to the strong growth that we have posted post-year-end, particularly in Africa, and how that is driving operating leverage and really asking what our views are on the consumer in South Africa. A secondary question linked to that is, are we planning to increase the approval rates on credit? I think our strong growth really is just a result of positive momentum. I think if we look at our brands in South Africa, as I touched on in the earlier presentation, we have very clear strategies around taking market share in pretty much every segment we operate in.
We've got a very normalized base now, and I think all of our brands are already starting to benefit from that retail ecosystem that I described. Our online and social media presence has certainly captured a lot of attention amongst the South African consumers. You plug credit into that, which is the second part of the question. I think the momentum is really building. Jane, maybe I can ask you to comment on the accept rates.
Yeah, I mean, our accept rates are 20% at the moment, and we are very happy with where our approval rates are. We do not have any immediate plans to increase our accept rates. Of course, we do that in line with the quality of our portfolio and how it is performing. There is nothing urgent at the moment to increase those accept rates.
Thanks, Jane. Ralph, I think I will pass the next question to you. Can we expect the 90% conversion of EBITDA into cash to continue? And could you also comment on TFG's debt profile?
Sure, Anthony. Yes, we can. We think the 90% conversion of EBITDA is where it needs to be. On the debt profile, we adequately term out our long-term funding, as you would expect, up to five years, and covenants are in a very healthy position. Remember, very importantly, that that debt is pretty much the right level of debt to fund the debtor's book.
Super, Ralph, thanks. We've got another question on White Stuff's operating margin. I think Justin covered that. Then a question on when do we think the TFG Africa operating margin will achieve circa 14%. I do not think our views on that have changed. Our ambition is still to get there by FY 2028. Obviously, a lot of moving parts, but certainly the ones that we can control, we are pretty confident about. The next question relates to how much of the EBIT improvement at a TFG Africa level stemmed from the performance of BASH, the new DC, etc., and what will the catalysts be for FY 2026? BASH narrowed what was about a ZAR 250 million net cost two years ago, so that's definitely contributed to the improved operating results and profit. We expect the break even to move into suitable profitability over the next couple of years. I think there's more to come from BASH. The new DC really is only just ramping up at the moment.
I think we've had a very marginal impact on our results in the current year, but that's something that will drive or help drive somewhere around 150 basis points uplift in our Africa gross margins over the next two to three years. I think the benefits of that are still very much to flow. Yeah, I think those will be the key catalysts for the year ahead. Let's take a look at the next question. What further opportunities do you see in the VAS and sell market? Do you expect a material uptick in trading due to the cold winter? Can BASH be scaled offshore? All great questions. We didn't really talk about it today because it's still work in progress, but we've made tremendous progress in terms of VAS over the past 12 months.
We've really seen a stepped uplift in terms of our install conversion around all of our VAS products, including the sale of mobile devices and data and airtime. The next leg of this is ready to incorporate our existing VAS services into our BASH platform. That's work in progress at the moment, and I think that will give a material uplift when it lands. The impact of winter, our sell-through rates actually from the start of winter have been very pleasing. It kind of talks to that post-year-end momentum that we've already touched on. It certainly helps to have a proper change in season. Traditionally, we are very cautious around winter. It's a very short season, typically in South Africa. We tend to go in relatively light. At this point, I think pretty confident we'll end winter clean, and it should contribute to the current momentum.
The question around BASH being scaled offshore, I think we've got a very long list of to-dos with BASH in South Africa at the moment, but it does occupy our thinking. Probably the next step will be kind of SADC and rest of Africa. There we have a limited number of stores that trade very profitably, but we have a customer that keeps on telling us they would like access to the full catalog of TFG product. So that's probably, I think, the next geography for BASH first. Ralph, actually, no, Jane, I'll pass this one to you. It's a bit of both of you, but I'll pass it to you. How would we expect EBIT from credit to evolve in FY? I'm assuming that should be 2026 given the reducing interest rate environment.
Sure. Obviously, the interest rates are dropping, which means I will earn less income for the credit portfolio. Of course, it also means that the funding required and the interest associated with that funding will also drop, as Ralph showed when he did the ROE calculations. We have also introduced MCLI, mandatory credit life insurance, which will become more meaningful in the forthcoming financial year. That will help in terms of the EBIT for the overall credit portfolio.
Jane, sorry, I think another question, acceptance rates for credit in H2. You did kind of cover that, but maybe just answer it again.
Yeah. It is a little tiny number on my graph, though. The accept rates for credit in H2, I think it is 20.2%. I think I show on the graph something around there, but it is at that 20% mark. There was not much difference between H1 and H2 acceptance rates for the last financial year.
Great. Thank you. A question around how different stacks have performed post-year-end in South Africa. In particular, how has the sportswear segment traded? Actually, very well. I do not have the exact number, but kind of growth of very close to 10% post-year-end. Yeah, trading, I think now off a proper base. A question going, I guess, back to the DC and the 150 basis points improvement. The 150 basis points really is a combination of a number of different factors. Just to be clear, it is not entirely the DC. We are seeing constant improvement in terms of the gross margins we are getting out of our own quick response vertical manufacturing. That combined with the enhancements in terms of efficiency coming out of the new DC will give us 150 basis points.
Very much a combination of factors. Unless there are any other questions, guys, I think that brings the Q&A to a close. Thank you very much for everybody taking the time today. I know it has been a busy day in the markets. Enjoy the weekend.