Good morning, everyone, and welcome to our TFG FY 2022 interim results presentation. As usual, in addition to myself and Bongiwe, we have a number of our most senior leadership team members presenting this morning to ensure that we give you the most accurate read of what is happening in all the key segments of our business. I'm gonna begin with an overview of our operating environment over the first half of the year, together with a summary of the progress that we've made in respect of our key group strategies and how these are helping support our recovery and positioning us for future growth. Bongiwe will take us through the detailed group results, balance sheet, cash flows, and key operating metrics. Jane, Gary, Dean, and Justin will give us some flavor in respect of Credit, TFG Australia, and TFG London.
I'll then wrap up the presentation with our outlook for the rest of the year and our most recent trading, and we'll then have some time for questions and answers. Let's begin with an overview of the first half of our FY 2022 financial year. While we have now hopefully starting to see the end of the worst of the impacts of COVID-19, it's clear that our first half trading has continued to be impacted by COVID-19 store closures, the negative economic consequences of the pandemic, the unrest that we experienced in South Africa during July, as well as the most recent high levels of load shedding that we've experienced in South Africa.
To put the impact of these disruptions into some perspective that we can understand, we lost approximately 270,000 trading hours in TFG Africa, which equates to about 7% of available trading hours in the first half. We lost approximately 104,000 hours in TFG London, equating to approximately 9% of the available trading hours, and we lost more than 1 million trading hours in TFG Australia, which equates to slightly more than 25% of their trading hours. Despite all of these headwinds, we still generated a very strong recovery after the negative impact that COVID had on our results last year. With a nearly 52% increase in turnover, a 64% increase in gross profits, and a 641% increase in headline earnings.
In addition to this very strong operational recovery, we both continued to reap the dividends in respect of a number of our previous strategic investments, as well as to make further progress on our key strategies. We continue to invest organically in maximizing and rolling out our brands and stores. To this end, we recently opened our 3,000th store for TFG Africa during the month of September. Jet has now been part of the TFG family for just over 1 year and continues to meet our ambitious expectations for the business and to provide a significant addition to our group turnover and profitability. For me personally, it feels like Jet has been part of the TFG family for a lot longer than just 1 year. Now, I think this bears testimony as to how smoothly the transition and the integration has actually gone.
It's worth remembering that just a year ago, Jet was on its knees and on life support. Over and above the financial results of the existing Jet business that we acquired, we've also launched Jet Home. Firstly, in a bold new store-in-store format across 50 of our existing Jet stores, and then more recently as 5 standalone test stores. Now, it's obviously very early days for Jet Home, but initial trading has been well ahead of any of our budgets and plans, and this gives us confidence that we'll have a real business in the value homeware segment, which, as we all know, has got some real tailwinds behind it. Our localized quick response manufacturing has delivered great benefits for TFG Africa over the last 5 to 7 years.
Even more so, as we've scaled this to the point where we now manufacture just over 72% of our apparel locally. However, the real advantages of having a robust, agile, local quick response supply chain have never been more apparent and evident than they are right now, when every single retailer in the world is being negatively impacted by supply chain delays and steeply elevated shipping costs. Several years ago, we took a strategic decision to shift our focus to driving our Rand's gross profit instead of obsessing on our gross margin percentages. TFG has had the steepest selling price deflation in this market over a number of years, and we've remodeled our pricing architecture to ensure that we offer value and remain relevant to our entire customer base.
This was important even pre-COVID, given the negative per capita GDP scenario that South Africa has been suffering through, but again has never been more relevant than now. It's thus very gratifying to have seen our 52% growth in group turnover convert into a 64% increase in our Rand's gross profit. That's a 1.2 times positive leverage to gross profit. As part of our transition to becoming the market leading omnichannel retailer in Africa, we launched TFG Labs during the six months under the leadership of Luke and Claude. TFG Labs already houses 96 software engineers and tech specialists, and this will grow to close to 180 software engineers and tech specialists by year-end. Even though we're still very much in the build phase of TFG Labs, we are already seeing some very positive developments across an array of omni and e-commerce metrics.
From a balance sheet perspective, we've never been in a stronger position, and this gives us the confidence to know that we can continue to invest aggressively in both organic and inorganic growth opportunities. I guess the even better news here is that we have no shortage of either. Our job now is to prioritize our capital allocation wisely and to ensure efficient execution. Pulling all of this together in terms of metrics that demonstrate the extent of our recovery, despite all of these headwinds that we faced in the first half. We ended the first half with a 641% growth in headline earnings, as I mentioned, which is 3.4% higher than our peak headline earnings as at 31 September 2019 pre-COVID, and we generated ZAR 3.9 billion in cash from operating activities.
Taking all of this into account, we have announced this morning the recommencement of dividend payments, and we've declared an interim dividend of ZAR 1.70 per share. We previously indicated that in light of both the prevailing economic uncertainty, as well as the extent of our organic and inorganic investment opportunities, that we would be raising our dividend cover to allow for both of these factors. In addition to this, we took an even more conservative view for the interim dividend to give us scope to move up for the final dividend should conditions allow for this.
Again, just to put the scope and scale of the recovery into context, it's clear that we faced a number of very significant challenges over this period that go well beyond just the physical direct impact of the COVID related lost trading hours, including the unrest and looting, the supply chain disruptions that I've referenced, and load shedding. Fortunately, our group strategies and the way that we set our business up allowed us to ride through this period and face these challenges without too much of a negative impact on our overall results. I mentioned the lost trading hours on my previous slide, and I'm not gonna repeat these hours, but I do think that these pie charts really do demonstrate the potential upside for our trading and our results once things normalize.
Given the tough trading conditions that persisted during the period, I think the key story behind our strong recovery has been the extent of our market share gains, both in terms of store and online sales. Looking at the bar chart on the top of the slide, we compare TFG Africa's total growth to the market and to our key competitors. The Stats SA numbers, which represents all retailers in South Africa, show a growth of 26% for the five months that the results are available for. The RLC numbers, which represent our key competitors, grew slightly ahead of that at 27% for the five months. TFG Africa, excluding Jet, grew by 35%, and if we include Jet, we grew by 63%.
Focusing on our core men's and women's wear segments, TFG increased its market share by an unprecedented 480 bips or nearly 5% compared to the same period last year. From an e-commerce perspective, we're also gaining further market share, and we now have a leading 45% online web traffic market share compared to our traditional retail competitors, and a 39% market share when compared to the pure plays, second only to Takealot. Now to unpack the online growth and market share gains in a bit more detail. Both our bricks and our online turnover growth has been underpinned by the very strong brand equity that each of our individual brands have and the power that our collective brand portfolio has in totality.
The bar chart on the left here shows the extent of the daylight between the aggregate social media following of TFG's brands and the social media followings of our retail competitors. All of this translates into some very interesting key metrics. We now have 15 million social media followers. We've had a 25% increase in our site visits and a 16% increase in the number of items ordered over the last six months. Our online turnover growth was 16% for TFG Africa, 22% for TFG Australia, 24% for TFG London, and after converting all the various exchange rates, this rolled up to a 13% online growth for the group of an obviously COVID-inflated base for last year.
I mentioned in my introduction that our strong recovery over the period has been supported by the realization of some of the benefits that flow from our previous strategic investments. This is especially in relation to technology, local quick response manufacturing, and the continued investment in our brands and stores. Rest assured, we didn't allow ourselves to rest on our laurels over the last six months, and we have continued to invest meaningfully behind each of these strategies. In terms of technology, as I mentioned, we launched TFG Labs under the leadership of Claude and Luke.
We completed our first ever acqui-hire when we bought Flat Circle, the best mobile shopping app developers in South Africa, who are helping us to develop a new world-class TFG shopping app as the foundation for our TFG Super App and to re-platform our dot-com website during the course of the next year. We could never have achieved these sorts of things in these time frames without having these sorts of skills in-house. We also concluded a very strategic financial services partnership with TymeBank, which ushers in a new set of digital opportunities for the group. TFG is now well on its way to becoming a true leading omnichannel retailer. Digital adoption has more than doubled in South Africa over the past two years, and this is not going to slow down. Many of our true competitors in the future are likely to be pure plays.
Hence, our strategic ambition is to become the most reliable, most profitable e-commerce destination on the African continent. Our short-term ambitions include raising our e-commerce contribution for TFG Africa above 10%, generating world-class mobile conversion rates, cementing our current competitive advantage as already the leading fashion and lifestyle destination in Africa, and using our omnichannel investments to drive up our store trading densities. Ultimately, though, this is not a pure e-commerce play. This is all about utilizing both our key existing physical assets together with our newly enhanced digital capabilities.
These assets include 26 million+ South African customers, South Africa's largest quick response manufacturing capability, market-leading in-house credit capabilities, 13 million social media followers in South Africa alone, 3,000 physical fulfillment centers, which we used to call stores, unrivaled fashion and lifestyle choice with 22 proudly South African TFG brands, more than 200 individual brands, and more than 180,000 sales across our South African brands. We've made a significant investment in our digital transformation over the past 5 years to create a formidable moat. We will continue to invest in these areas in the future to ensure that we retain and expand these advantages. The good news here is that a lot of the heavy lifting has already been done. For example, we have invested in a number of market-leading customer enabling technologies, and we shared this with you in previous presentations.
Things like RFID, OneStock, One X, our new point of sale, which is currently being rolled out. Our CDP or Customer Data Platform, which will provide us with a true single view of our 26 million customers for the very first time in our history. We've also invested in technology to enable our back office to drive efficiency and to underpin a lot of the cost optimization benefits that Bongiwe has been driving. These are technologies such as Ubiquity, workforce management, conversion counters, and TFG's digital learning platform, TFG Learn. Our TymeBank partnership ushers in an entire new digital financial services ecosystem. TymeBank kiosks in our stores will provide near instant debit cards, personal loans, a full suite of value-added services, as well as a market-leading buy now, pay later offering called MoreTyme.
Buy now, pay later is probably the hottest area in fintech in the world right now, and this offering will both replace the antiquated lay-by system that exists in South African retail and also provide our customers, especially our younger customers, with a much more Gen Z appropriate alternative purchasing option. TymeBank has already grown to more than 4 million customers, having launched just 32 months ago, and is currently growing its customer base by more than 140,000 new customers every month, and that's before the partnership with TFG. Strategically, this partnership will allow TymeBank and TFG to design and bring new fintech offerings to the market faster than ever before.
We've also continued our investments into localized quick response manufacturing, and during the first half of the year, we made a number of manufacturing acquisitions in the Western Cape, KwaZulu-Natal, and in Gauteng to increase both our manufacturing capabilities as well as capacity. We have proven and shared the economic advantages of our quick response manufacturing with you in the past. Over the last six months, the measurable, tangible benefits included a gross margin benefit of ZAR 52 million and a markdown saving of ZAR 105 million. What is harder to quantify, but actually much more important, is the in-stock availability and sell-through and sales advantages that come on the back of our quick response model.
All of these quick response advantages were clearly important again in the past, but never more relevant than now, particularly as Far East supply chains are in total disarray and disrupted, and international shipping rates have risen by more than 400% compared to just a year ago. Looking forward, we are aiming to manufacture more than 30 million units a year by FY 2026, and 100% of these will be manufactured on a quick response basis. We are also increasingly looking to expand our quick response capabilities into non-apparel products. On a conservative basis, we'll be sustaining more than 7,500 manufacturing jobs at a time when every job is critical in South Africa. Our brands and stores remain absolutely core to our strategy and to our success.
During the first half of the year, we rebuilt, restocked, and reopened 145 of the 198 stores that were looted during the July unrest in South Africa. We also opened 183 brand new stores during the period. In addition, we acquired the Granny Goose business and their various brands to further strengthen our Homewares business. Investment in stores and brands is fundamental to our business model, and this needs to be maintained throughout the cycle. For interest, looking back, during the period from 2012 through to 2016, we added 865 new stores and four new brands for TFG Africa. During the period 2017 to 2021, we added a further 981 new stores and five new brands.
Now, over these two periods, this allowed us to add ZAR 11 billion to our TFG Africa turnover and helped us create more than 12,500 new jobs on a cumulative CapEx investment of just ZAR 3.6 billion. Looking forward, over the period from 2022 to 2025, we have a pretty well formulated and locked-in plan to open more than 1,000 new stores for TFG Africa alone. As you can see from the CapEx estimations, our build rates are clearly lower than in the past, and this is as a result of a combination of building smaller, more value-oriented stores as we expand further into more rural areas, as well as a result of greater procurement efficiencies that we are now realizing through our newly established group procurement function.
Looking back over the first half of the year, I think we have enjoyed a lot of commercial successes and strategic milestones that I'm proud of. The things that I'm actually the most proud of is how we've conducted ourselves from an ESG perspective.
ESG is obviously comprised of the environmental, social and governance pillars. While each of these pillars is of equal importance and gets a lot of attention at TFG, the tragically high persistent structural unemployment in South Africa and the impact that this has on our economy and society has elevated this to a very critical focus area for us. During the first half of the year, TFG employed 850 people in manufacturing jobs. We partnered with St Vincent School of the Deaf to open our new Prestige Johannesburg factory, which only trains and employs deaf learners. We employ approximately 1,500 learners, apprentices and interns in our business, and we employed 475 young South Africans into their first jobs through the YES program.
I can go on, but I think these examples show just how strongly we feel about job creation and employment opportunities. Before I hand over to Bongiwe, let's enjoy a short video that showcases some of the progress that we've made through our latest manufacturing acquisitions.
Thanks, Anthony, for the strategy overview. Listening to you, I cannot help but marvel at what the group has achieved in the first half of this financial year amidst of all COVID restrictions, lockdown, civil unrest, and lately the escalation of Eskom load shedding, which continue to impact on trade, staff, customers and their families. Good morning to everyone who has joined us on the call today, our investors, analysts and all our key stakeholders, and importantly to all our staff in all our regions of operation.
A quick pause there deliberately to give all the ladies an opportunity to admire the stunning stone from American Swiss, which is available, by the way, in store and on mytfgworld.com. Starting with our income statement, we pulled out a few key metrics. The detailed income statement is included in the appendix. Reported retail turnover of ZAR 19 billion was 52% ahead of the same period last year, showing a very robust recovery on last year. Even more pleasing is the 12% growth on the 2020 financial year. We estimate that Africa lost ZAR 430 million as minimum from the civil unrest, from the 198 stores looted, and from the more than 1,000 stores we closed that week as precaution. The numbers in the bottom block represent the approximate normalized result if there had been no riots.
The next slide will unpack how much riot business interruption income we have accrued for in the first half of the year. This normalized turnover excludes the turnover lost from the second quarter closures in Australia, where we approximate a turnover loss of AUD 60 million as approximately 55% of our stores were closed. New South Wales and Victoria have since reopened and trading ahead of plans. I will not steal Justin and Gary's thunder, who will take you through Australia's performance and the outlook for the remainder of the year. TFG London's performance has been exceptional and closed half year with turnover up 50% on last year. Justin will take us through their performance and outlook later on. We are very proud of what the U.K. team has achieved. While turnover growth talks to our market share gains, the gross profits we bank are equally important.
The reported ZAR 9.3 billion gross profit is a 64% improvement on last year and a 3% growth on 2020. I will unpack the gross profits in the next few slides. Growth in EBITDA of 430% was driven by improved operating leverage, underpinned by GP margin and tight cost control. Consequently, our headline earnings of ZAR 1.3 billion are significantly up on last year and more pleasing, 3.4% above those of 2020 first half. We have had a lot of queries regarding how we are accruing for our business interruption claim. We have taken a conservative view and have accrued for ZAR 100 million pre-tax income, representing a GP loss of approximately ZAR 180 million, offset by any rental savings we anticipate achieving.
For Sasria asset losses or balance sheet impact, we have assumed no income statement effect, but simply a replacement of assets lost like for like. To date, ZAR 460 has been received against a circa ZAR 700 million claim, VAT inclusive, from Sasria, and we expect further payment during the second half. Our teams have worked tirelessly to get us back to trading, and to date, 154 stores of the 198 stores are open and trading and are largely in line with forecast. We are working with our brokers to finalize the claim, and we'll give an update at year-end. The 3.4 headline earnings growth on 2020 was achieved despite a ZAR 280 million shortfall in credit EBIT, which is driven by a lower interest rate environment and a smaller debtor book.
We have included this slide to show the impact the reduction in interest rates since March 2020 has had on income. This, together with a deliberate reduction in the book size, has led to interest income reducing by 35.2% from the first half of 2020. For context, and assuming all remains equal, 100 basis points improvement in interest rates yields a ZAR 110 million increase on interest income on an annualized basis. Cash sales continue to grow with 57% growth on last year, bringing cash sales for the group to approximately 80% for the period. For context, Africa cash sales now contribute 70% of our sales in Africa, the total inverse of where we were a decade ago. Credit remains an enabler for retail turnover growth. Gross profit.
Gross profit banked of ZAR 9.3 billion is up 64% on last year and more pleasing, 3% up on first half of 2020. For every 1x improvement in turnover, the pace of improvement has grown in gross profit by about 1.2x. I suppose this speaks to product attractiveness, demand for product, which leads to a greater proportion of full price sales. Africa has banked ZAR 5.7 billion with GP percentages recovering from the 43.4% to 44.3%, and excluding Jet up to 45%, their 45%. The gross margin evolution over the period is strongly linked to the lower markdowns, the lower sales markdown achieved.
Just to give a perspective, markdowns on just clothing category alone improved 5% during the first half, and a lot of this improvement is attributable to our quick response local manufacturing led by Graham and his team. The continuous investment in price, working with local and international suppliers, has resulted in us operating an average price deflation year-over-year for the past four years at least, as we saw the continued pressure on the consumer wallet and the need to give the customer value for money. The gross margin percentage is also influenced by product mix, with a significant growth in homeware and technology product sales, which by nature obviously attract a lower, a much lower margin. Our latest acquisition, Jet, as a value retailer, trades at a lower margin as well as we have previously guided.
Having said all of this, margin expansion will continue to be our focus, especially with input margins under pressure as logistics and shipping costs are significantly up globally. This is partially mitigated depending on merch category by our large proportion of locally sourced products. The U.K. improvements have been marvelous, very solid margin recovery, where we're seeing some product categories selling at same margins as in 2020, and we expect this trend to continue to improve in the second half as trade restrictions continue to ease. Australia margins largely intact. In fact, for some brands, GPs are running at margins above those of 2020. As a group, we're still carrying provisions at similar levels to year-end, which might appear to be conservative in light of the reported trade.
We are cognizant of the threat of further COVID-19 lockdowns, supply chain disruptions worldwide, that impacts all our countries of operations. I will elaborate further on provisions in the inventory slide. Trading margins. For me, this is one of the key highlights of our performance to date, as it evidences a tight control of costs and the significant optimization work achieved to date, especially in our back office functions, which together with other operational savings, has yielded a reduction in base cost of 6% when compared to 2020. I'm using 2020 comparison as 2021 was largely flattered by the government and landlord, COVID-19 relief assistance we received. In 2020, our expenses at ZAR 7.7 billion were running 45.4% of turnover.
The business optimization has yielded in excess of ZAR 400 million sustainable savings, and coupled with the negative rental reversions achieved year-on-year, as well as reduction in other expenses, has rebased our base cost to ZAR 7.3 billion, which is 6% down on 2020, as I've said. This represents probably 43.2% expenses to turnover. This has allowed TFG to invest in growth opportunities like Jet, e-commerce, where we are reinventing our IT platforms and applications to support the transformation of our customers' omnichannel experience. As a consequence, we impaired some legacy IT costs to support the innovation within TFG as led by Luke and Claude. Even with these new costs, though, our trading expenses remain down on 2020 at 43.7% to turnover.
A few presentations back, I talked of the key KPI Anthony had given me when I joined, and what we thought we could achieve as a team over a five-year period was achieved within a three-year period. As I've said before, we did not waste the crisis imposed by COVID. I've included this summary to close off the income statement and showing that every key metric has come back quite strong on 2021. Actually, for many key metrics, the recovery beyond pre-pandemic levels is evident, which is even more satisfying. Moving on to the balance sheet. Net debt has further reduced by ZAR 500 million from year-end. Inventory is up ZAR 200 million due to tight continued control in purchases and improved rate of sales resulting in higher stock turns. Debtors.
Debtors are down by ZAR 100 million due to a continued tight acceptance criteria and a higher quality book. Due to strong operating profit, cash on hand is up ZAR 900 million from year-end. Covenant testing was resumed in all territories, and comfortably met. Debt-to-equity ratio has come down nicely over the past few years, as per the graph on the right. Consequently, the board approved the resumption of dividends with an interim dividend of ZAR 1.70 per share declared. Inventory, as mentioned earlier, well under control, with provisions sitting at about ZAR 1.1 billion, largely at the same levels as last year, as I've said. This equates to a 12% gross inventory provision. The U.K. stock has come down nicely as well as they've come as trade has resumed.
Australia has been in lockdown, as I've said, for most of Q2, which obviously has led to a little bit of stock build-up, but this has put them in very good stead. As the lockdown's lifted, they've had the stock to trade hard. Pleasing is that nearly 80% of our stock is less than 26 weeks old, which talks to freshness of our stock. Operating profits of ZAR 4 billion was generated by our operations, coupled with the improvement in collections and tight stock management, as per my prior slide, has led to a net increase of ZAR 900 million in cash, even with debt repayments during the period and increased CapEx spend in the past 6 months, which leads on into my next slide. Last year, we cut CapEx spend significantly, as the focus was on cash preservation.
This year, we've taken advantage of opportunities, especially post-lockdowns, to expand our footprint in areas where we're not represented or areas where competition had exited. As a result, Africa grew space by 3%, and that's largely been in the expansion of our value brands, including another 30 stores in Sportscene and Totalsports, among other brands. As part of our capital allocation strategy, I spend a lot of time with Stuart, our Retail Director, in approving all store CapEx and any brand expansions. What we're probably hoping for this year is about a 200-store increase, which will bring an additional ZAR 1.2 billion in annualised turnover. The opportunities that remain are significant and based on a very considered location and expansion and brand expansion strategy. I'll quickly touch on Africa, obviously being our largest area of operation.
All numbers are in the appendix. Trade has been strong. Turnover up 60% on last year. Excluding Jet, turnover is 34% up on last year. When compared to 2020, Africa was flat. However, as you might remember, 2020 was our record year for Africa. Gross profit of ZAR 5.7 billion has been banked to date, which is 68% up on 2021, which is a remarkable performance, especially in light of the constrained consumer environment, compounded by civil unrest and ongoing load shedding. Stock is fresh, as I said, 80% and less than 26 weeks old. Really a big, big thank you to all our retail, e-commerce and customer teams for delivering such strong performance. Moving on to Jet. This will be the last time I'm showing the Jet brand separately.
As communicated at the year-end, Jet is set to deliver turnover in excess of ZAR 5.5 billion for the year. This is slightly lower than the approximate ZAR 6 billion probably we guided at year-end, and is largely attributable to direct impact of civil unrest in Africa, which impacted turnover and stock availability. All in all, 36 Jet stores were unfortunately looted and represents the largest brand impacted in the group. We estimate a conservative ZAR 100 million loss in turnover to date, which is partly mitigated by the several continuous improvement initiatives in the business as they work with TFG management and leverage of the TFG group scale. What the team led by Shane has achieved is nothing short of a miracle, and in a very short space of time. All trading metrics are well in line with our expectation.
As Anthony mentioned as well, Jet Home launched successfully and thus far is trading in line with expectation. We estimate to have grown Jet footprint by a further 20 stores by the end of the year. Well done, Jet team. In closing, no doubt we have had a very successful first half. Equally, the second half is critical, with key events such as Black Friday, Christmas trade and January back to school and work, hopefully. At the same time, we remain cautious as we continue to experience load shedding and disruptions, a threat of a potential fourth wave in Africa, as well as global supply chain disruptions, especially on branded items which are sourced offshore. However, I know our teams are resilient and continually set themselves high targets and no pressure everyone listening.
I know, as usual, we will work as a team to deliver a strong second half. Regarding costs and other operating metrics, I can assure you a lot of the operating philosophies imposed on us by COVID are now well embedded in our operations with opportunities for further optimizations in the future. Look, a lot of work still to be done, but I'm pretty confident that as an organization, we have emerged much stronger and fit for purpose. Thank you all. I'm now handing over to Jane to take us through financial services. Over to you, Jane.
Thanks, Bongiwe. So how is the world of credit looking right now? Well, we've seen significant demand for our in-house credit with nearly 1.2 million applications this half year, which is the highest volume of applications we have ever seen. It really shows the pent-up demand for credit as the country learns to deal with the pandemic. By year-end, we expect to have over 2 million applications. Now, demand for our credit product is due to two main reasons. Firstly, we have actively started marketing our credit products and have run new accounts drives with initiatives for customers and staff. These are always hugely successful campaigns, and this half year has been no different whatsoever. Secondly, we have started to slowly increase our accept rates. During the hard lockdown, we dropped our accept rates to less than 10%.
Given the resilience of our customers and the ability for our customers to keep paying their accounts, we have slowly increased accept rates back up to 25% during this half year. By year-end, we expect our overall accept rate to be circa 30%. Our account base now stands at 2.5 million customers, and the credit contribution to turnover in South Africa is 30%. Given the strength of cash turnover and as part of a prudent risk management strategy, we expect to keep our credit contribution at these levels going forward. There's just simply no need to take more risk than necessary. Demand for our product is up, but the natural question to ask is, what about the quality of our book? All of our statistics are showing an improvement in the quality of our book.
The number of customers in a buying position is back to pre-pandemic levels, sitting at 79%, which is the highest it's been in the last 2 years. The overdue balances have improved, which is now at 14%, down from 18% this time last year. Our provision ratios have improved down to 20% from 25% this time last year. Our net bad debt statistic, which is our write-off, recoveries, and our provision movement combined as a percent of the book, has resulted in an improvement, now down to 12% from 16% last year. The reason for this improvement in our debtors book is twofold. Firstly, we tightened our credit lending criteria during the pandemic in order to reduce any risk in our portfolio. As controlling the front end is the fastest thing you can do to limit any potential losses.
Probably more impressive is the customers' resilience to keep paying their accounts. To show this, I've included a graph which shows the amount of cash collected as a percent of last year, as well as the cash collected as a percent of the book. Both metrics have improved. The amount of cash we have collected is nearly 8% higher, despite the gross book being 11% smaller. Cash collected as a percent of book balance is higher in this financial year, which clearly shows the improvement in the quality of our debtors book. However, we are still in an incredibly low interest rate cycle, which is the biggest reason for the subdued EBT. For this half year, it's ZAR 72 million, which is obviously much better than the loss of ZAR 91 million last year, but it's still significantly down when compared to two years ago.
Interest rates are down 325 basis points from two years ago, and that's roughly a 100 basis points interest rate increase equates to ZAR 110 million income per annum. Hence, until the interest rates increase again, EBIT for credit will remain subdued. However, the reason we run store card credit is to enable merchandise sales, which is a hugely successful strategy for TFG. That doesn't mean financial services shouldn't innovate beyond store card credit. As Anthony mentioned in his slide, we have literally just entered into a partnership with TymeBank, which we believe is a great strategic partnership. This partnership will allow us to accelerate our digital offerings and expand our financial services offerings. The first product to be launched will be the MoreTyme product, which is a buy now, pay later product.
The customer is able to take the product immediately, pay half upfront and the remaining amount over the next two months with no fees and no interest. This service is being tested as we speak, literally, and should be live in our Jet stores by the end of this month. Now, this is seen as complementary to our store card credit, as this typically appeals to customers who want a greater variety of payment options as opposed to taking out credit. Unlike the current lay-by offering, they get to take the product immediately. However, the most exciting part of this partnership is the launch of a greater suite of financial products, and we are starting with a co-branded debit card.
Customers will be able to open up a bank account in-store via one of our new TFG Money kiosks or online, and in less than five minutes, they will be able to have a personalized printed debit card in-store. The first kiosk has literally landed in the country and is being tested, and we expect the first kiosk to be in-store and live for our customers during quarter one next year. We will be the only fashion retailer with this offering in store. We will then look to launch personal loans during the course of next year, as well as assessing other financial products and services that would appeal to our customers. We are literally about to start training our staff and our customers on these new financial products.
To bring this start of this journey to life, I'd like to show you some of the training material that is being developed.
This is Thabo, and this is Lolly. She loves to shop at TFG stores, but often the things that really suit her don't suit her budget. Noticing her disappointment, Thabo cleverly suggests that Lolly uses MoreTyme from TymeBank. Thabo explains, "With MoreTyme, you pay half now, take your shoes home today and pay the rest over two months, interest free." Lolly looks extremely happy and thinks that Thabo is rather clever. "All you have to do," says Thabo, "is open a free TymeBank account and applying for MoreTyme, it takes less than five minutes. No standing in queues at the bank and no need for documents. That's because you can apply for a TymeBank account right now, right in the store using this TFG Money kiosk, and you'll get your personalized debit card right here as well. Look how simple it is. Let's get started by opening an account.
All you need is your ID number, cell phone number, and a fingerprint or two, and out pops your personalized debit card, which is also your ticket to TFG Rewards. The next step, he says, is in your hand. Just download the TymeBank app, log in, activate MoreTyme, and you're good to go. Realizing she could actually have one of the pairs of shoes, Lolly can't make up her mind. Decisions, decisions. Lolly makes her choice and the shoes are hers. She's always happy when she shops, but she's even happier today because today she's opened her TymeBank account, got her debit card, joined the TFG Rewards program, and used MoreTyme to get a pair of shoes she loves, all in one go, all in one store. It couldn't get any better. Or could it? As they're about to leave, Thabo presents Lolly with yet another surprise.
Thabo's shares are really climbing now.
As you can see, I got the opportunity to test drive the first TFG Money TymeBank kiosk in our Jet store in Rosebank. I opened my account and got my personalized debit card in less than five minutes. Watch this space as financial services at TFG just got super exciting.
Hello from London, and, thank you very much, Jane. TFG London, just to cover the market, we've seen on the whole a really encouraging recovery over the last six months, and that recovery has come from all brands. That follows obviously what was a very tough year to March. The recovery has been driven through sales, obviously, but also with margin and down to the EBIT level. In terms of the retail market then, we've seen the gradual ending of lockdown and with that, a real step change in how the consumer confidence has come back, which is really positive. Footfall onto the high street's been better and better. Shopping centers, high street, albeit that there has been some regional variations.
In terms of online then, online had a significant boost during lockdown, obviously, without the bricks and mortar estate being opened. The online channel has retained some of that gain with the permanent change in customer shopping habits. In effect, if one looks at it, that's just accelerated a trend which was in place before the pandemic hit. Against those trends we've not been immune, unfortunately, to the impacts on the global supply chain that have been coming through and which continue. If we move on then to TFG London and looking at our performance, it has mirrored that. Footfall has improved, albeit that London being a key market for us has lagged the rest of the U.K. and has lagged the overall recovery trend.
Obviously driven there by a lower level of tourism and a slower return to what will be normal working patterns. Encouragingly in the key categories, occasion wear, and then obviously wear to work, over the last six months, we've seen some really positive signs and some increasing mixes in those key categories. The colder weather's now started and again, in terms of the layering categories across all three brands, we're seeing good lifts on year minus one or, you know, good comparative year. If we look at the online mix for TFG London, that has now got over 40% of the total mix in the first half. If one compares that to year minus one or comparative year pre-COVID, we were just over 30%. A material increase in the online penetration.
Looking at our international markets, they have been varied and the recovery on the whole has been slower, as lockdowns and restrictions generally have been moved forwards. If we look at margin and cost improvements in the organization over the last six months, it's been really encouraging. Margin stepped up across the board, both on last year and on the comparative year pre-COVID, and that's really been driven by fewer days on promotion. Cash generation's been strong. We've generated ZAR 33 million of cash in the first half, both from working capital gains and then also cash from operating profit. Really successful on those. There's been a lot of work that we've done in terms of our overhead cost base.
Really I suppose the ones to drill into here is the property costs where the property team have been working with our landlord base very successfully. If we look at our leases held at April 2020, some 38% of those are now been renegotiated. Across those leases that have been renegotiated, we've achieved an average cost reduction of 43%. If then one looks at the estate as it is today, we've got 45% of our stores on flexible terms, which is a material change and a material improvement from where we were. Just onto the next slide. Looking forwards, the U.K. market has made a really significant step forwards in terms of the booster jabs.
We've now got 18% of our population that have that jab complete, and that booster program for vaccination continues. On an overall basis, over 80% of the population who are over 12 have had their vaccine. There is a significant level of vaccine and jabs that have been delivered in the U.K. market. Schools have gone back, and offices are increasingly asking their workers to return to a normal pattern at least a few days a week, which again is all really positive for recovery. Since the half year we've seen the trends that we saw in the first half continue. We've continued to exceed expectations across all three brands.
That gives us a good degree of confidence of where we'll end up for the remainder of the season and for the full year. There's also, I think, in terms of backdrop, been a material change in the consumer offer with the likes of Debenhams and the Arcadia brands disappearing from the high street. That has changed many of the shopping environments that the consumers have come back to. We view that overall as extremely positive for us, and we then view our presence and our authority in our key categories as having been enhanced. We are cognizant, however, that the pandemic is still having a huge effect globally, and in the U.K. market with an infection rate which is still higher than we would like.
As I mentioned earlier, the impacts on the supply chain are ongoing. Our product availability is probably the key element there that we're measuring. If we look at where we are in mid-November, we've got gaps in the September launch packs and also in the October. Some significant ones in the October launch packs as an example of how that's impacting our product offer and therefore our potential recovery. If we look at the future, I'm really pleased with the progress we've made in terms of our overall digital strategy and putting digital first in all of our organizations, and we'll continue to build out our capability and our service proposition from a digital perspective.
That said, our retail estate remains really key to us, and we're focusing on doing a better job for our retail customers and bringing a better experience and a better service offer for them. On top of that, we continue to leverage the technology that we have as the core of TFG London and also our team to allow TFG London to grow both organically and also then focusing on growth by acquisition. That's TFG London. Thank you very much. I'm gonna hand you over now to Gary and to Dean in Australia. Thank you.
Good morning, everyone, and good evening in Sydney. Gary and I are here once again to provide a brief overview of the first half for TFG Australia. In many ways, the first half has been similar to the prior year. There were substantial impacts from COVID, ongoing challenges of constantly opening and closing stores, and ongoing government restrictions. Unfortunately, the differences this half year were no government JobKeeper funding and minimal assistance from landlords. However, on a positive note, there was opportunity. Consumers behaved with far better confidence and had a higher propensity to spend when they got the chance. Operationally, it was a challenging half. One moment stores are closed, the next moment they are reopened with sales beyond expectation. The result for the half was very pleasing. A 48% lift in EBITDA profitability at a 10.6% margin.
This is comparable with the normal trading result, which is amazing given the circumstances. Gary and I credit this result to the entire team, who have been very responsive and extremely resilient, and we thank them. Moving forward from the half. Since the end of September, when over 50% of our stores were closed, Australia now has over 80% of the eligible population vaccinated. Despite opening with restrictions, the economy from a consumer perspective is positive. Unemployment is low, savings are at record levels, so consumer confidence is good. As a result, consumers are showing their willingness to spend, and the second half has opened with over 10% comp store growth, an excellent start. Now I'll hand over to Gary for more on the outlook and opportunities.
Thank you, Dean, and good day to everyone in South Africa. As Dean mentioned, there are many similarities to one year ago, but there are also many differences. Last year, all our stores closed at the beginning of the financial year in April 2020, and we had a very poor first quarter, followed by a good future. This year, we had a very good first quarter. While there were rolling lockdowns, they were short, sharp circuit breakers. Then the Delta strain arrived, and our two biggest and most profitable states locked down. We had all of Victoria, New South Wales and New Zealand closed for July, August and September. The recovery from lockdown this year is quite different and exceeding expectation as fully vaccinated rates hit 80% nationally, 85% in Victoria and 90% in New South Wales.
Looking forward to Christmas and the new year, consumer confidence is high and households have saved an additional AUD 200 billion this year as lockdowns kept us at home. The big difference to this time last year is that events are on and RAG is, to a degree, an event-based business. Races are back on, school formals are happening, weddings are taking place without restrictions, as are sporting and cultural events, parties, lots of action everywhere with more certainty that your big event will not get canceled. The states have indicated that further statewide lockdowns will not happen given the high vaccination rates. Over the past few weeks, with all states trading, sales continued to exceed expectation and we are enjoying consistent double-digit lifestyle growth. Digital sales also continued to impress and grew 22.4% for the half of an already high base.
While we aggressively reduced our cost of doing business in lockdown, we did not stop strategic investment. In fact, we accelerated this. We continued to open new stores in Queensland, South Australia, Tasmania and Western Australia, and continued to negotiate new store opportunities in the lockdown states while accelerating our store optimization strategy. The digitalization of RAG is central to our strategic roadmap, and during COVID lockdown we accelerated investment in three key areas. Our digital hub, which is our center of excellence for all things online. We re-platformed Taroc ash's digital website with more brands to follow in the new year and upped investment in our Johnny Bigg USA online business. I feel positive. We have strong momentum and a strong balance sheet and are well-placed to both grow our existing business and actively look for an acquisition.
I know I've said this many times over the past eighteen months, but I do hope that I see you all in person at our full year results. Thank you.
Thanks, Gary and Dean, as well as Bongiwe, Jane, and Justin for sharing your insights and your commentary with us. Moving on to the outlook and what we think the next six months will hold for TFG. Our strategy has continued to deliver strong growth and commercial success over a number of years. Just looking back to 2015. Since 2015 onwards, we've added 15 new brands to our portfolio. We've substantially increased our quick response local sourcing. We've increased the number of people that we employ by more than 14,000. We've improved our B-BBEE rating by 3 levels. We've grown our customer base to be in excess of 26 million customers. We've taken 22 of our brands online. We've added 1,560 physical outlets.
We've grown our turnover by more than 100% and our cash turnover by more than 240%. These strategies have delivered success in the past, and they remain just as relevant going forward. Like all things, we continue to refresh and enhance them every year. Looking forward for the rest of this year and into next, we will continue to invest in our own high brand equity businesses to continue to grow our turnover and our margins. We will be working hard to further optimize our sourcing mix and supply chain efficiencies, also to improve our margins. We are going to be leveraging all of our assets. I mean, our brands, our customer data, our store footprint, our product assortment, and our talent to lead and outcompete.
We will continue to transform into a true omni-channel retailer and platform business to further grow market share. Now, if you had to ask me which of these I think is going to be the most challenging, without any doubt in my mind, it is going to be our transformation into becoming a leading omni-channel retailer. We clearly have some of the best bricks retail talent and experience available. With the addition of TFG Labs, we now have the best fashion pure play talent at TFG as well. The true value and magic lies in aligning all of this talent and experience behind a single uniting purpose. To make sure that we achieve this alignment, we recently took our entire senior leadership team through a collaborative process to reimagine, rethink, and redesign TFG's purpose, vision, and values.
Now, we didn't ignore the vision and values that have got us to where we are today. Rather, we used these as a base to rethink what will bring us collective success in the future. Our purpose is in fact very simple. We inspire our customers to live their best lives. As a large multi-brand and multi-segment fashion and lifestyle retailer, every single product that we sell does help to inspire our customers and in some way make them feel better about themselves, whether it's a pair of new sneakers, a diamond engagement ring, a new beauty product, or perhaps new dinner service from @home. Importantly, we also asked ourselves whether this purpose would still be applicable and relevant if the Group were to move into other new retail verticals in the future.
The answer very simply is yes. Our vision is to create the most remarkable omnichannel experiences for our customers. Again, this may sound deceptively simple and obvious, but it really goes to the heart of how we are going to bring our traditional bricks and our new digital worlds together to offer truly seamless customer experiences. This is the future of retail. We reduced our values to just three. These need to be clear, succinct, and something that every single person at TFG can remember and act on in their daily lives. Our values are. We put our customers first, we work smart and fast, and we do the right thing. Collectively, everybody at TFG will be guided and inspired by our refreshed purpose, vision, and values, and we are in the process of rolling this out throughout our group.
This short video should help bring to life our new purpose, vision, and values.
Live your best life. If you remember nothing else from this, remember that. Because in a world where everyone can and does tell you how you should be living, what you should be feeling, your only true power is how you show up in your life, and it's a magnificent power. We inspire our customers to live their best lives. We let them show up how they want to. We create remarkable experiences that touch every aspect of their lives, and spaces where they're welcomed and valued. Where they can find their true selves, then unleash it on the world. We put our customers first and find smarter and faster ways to inspire them. We do good by them and by their world because we owe it to ourselves to live our best life, and we owe it to each other to help everyone do the same.
Introducing our new purpose, vision, and values. We inspire our customers to live their best lives. Our vision is to create the most remarkable omnichannel experiences for our customers. We put our customers first. If we don't please our customers, they'll find someone who does. We work smart and fast. Today, staying in the same place means becoming irrelevant. We do the right things, and we do things right. Our new purpose, vision, and values are brought to life by every single one of us.
Welcome back, everyone, and I really hope you enjoyed that video as much as I did. Moving on to our outlook for the second half of the year. Clearly, trading conditions and consumer confidence remain under pressure, I think particularly in South Africa. Having said that, we will, however, continue to invest behind our strategic pillars. Examples of this include the hiring of a further 80 software engineers and tech specialists for TFG Labs, as well as Jet continuing to open more standalone Jet Home stores as just an example of our store rollout. We have a very strong balance sheet to allow us to capitalize on organic and inorganic growth opportunities. Having said all of this, the second half, as always, is obviously very dependent on Black Friday and Christmas trade.
The good news is we have the stock, the stores, and the staff that we need to trade well. There's certain things we can't control, load shedding and COVID, et cetera, but we're as well prepared as we can be. Having been very happy with our overall trade in the first half, October trade has also been pleasing with growths as follows: TFG Africa grew by 12.5%, with Jet now firmly in the base, and that's despite the intensified load shedding in South Africa. TFG London grew by 33% and continues to track well ahead of plan. TFG Australia grew by 5.7% against the backdrop that Gary and Dean shared, where almost half of our stores were closed for roughly half of the month.
As always, I'd like to end by thanking every single TFG team member, our suppliers and business partners, as well as our customers and shareholders for all of their efforts and all of their support during these extraordinary times. We'll now have a short five-minute comfort break and be back in five minutes' time to answer some of your questions. Thank you. Welcome back, everybody. Hope you've enjoyed the presentation. It's now the Q&A session. We've received a lot of questions during the course of the presentation, and we'll endeavor to answer as many of them as possible. Quite a few of them are similar in nature, and where that's the case, we'll try and group those together for brevity.
I'm joined, obviously, by Boningwe on my right, Jane on my left, and electronically we've got Gary and Dean in Australia and Justin in the U.K., all available if there are any questions directed to them. Okay, to kick off, the first question, gross profit and local manufacturing. Please clarify how you are able to monitor the success of increased local manufacturing on gross profit generation if you aren't focusing on profit margin. Is it market share gain? Very good question. I think, you know, just to be absolutely clear, we absolutely focus on profit margins. We look at it at a SKU level. We look at it at a brand level. It's, you know, an absolute built-in discipline in how we run the business.
I think the point I was making earlier on is you can obsess so much about percentages and kind of forget the rands that you bank. Ultimately, the success of what we're doing is measured in the number of rands of gross profit that we generate. We pay dividends in rands. We invest in rands. Rands runs the business, not percentages. But the two are obviously clearly important. I think the other part of the question really refers to the heart of how do we measure the success of local manufacturing. If you go back into the slide deck, and it's not just this presentation. Over the last, 3 or 4 presentations at least, we've shared a number of the metrics around, lower markdowns, higher gross margins that have been achieved. Those are the easily measurable ones.
You know, on the basis of those alone, we're very happy with the investment that we've made in local manufacturing. If you then kind of cast it a bit wider, you know, I've mentioned the massive disruptions in global supply chains, the more than 400% increase in shipping rates out of the Far East. To be honest, if we didn't have local manufacturing to the extent that we have it here, I think we'd be in a spot of bother and sweating a bit at the moment. We're going into Black Friday, going into Christmas with very few holes in any of our stock, and particularly virtually nothing in clothing which we manufacture here. And I guess when you put it all together, there's absolutely no question in our mind that this is important.
I think if you just look globally at the most successful retailers, whether it's Inditex, you know, as an absolute world-leading retailer or in the digital space, if you look at SHEIN, for example. The core success of both of those businesses is their ability to respond in real time to trade and season. South Africa, you know, just given where we're located at, the tip of Africa, if you don't have that capacity in-house here in your own country, bringing in product from the other side of the world, even at the best of times isn't the answer.
Hopefully that provides enough of an answer to the first question, but it was a really good one. The second question is, with 1,000 new stores, what does this translate to in terms of net store or net space growth on a per year basis? I think the number of stores, you know, we do this bottom up. We go to each of our brands. It's a discipline that we follow every year. We take a look at where the group trades across the country. We've got all the comparative trading data. In some ways, without oversimplifying it does become a little bit of a plug-and-play exercise. We know how we trade literally in each precinct in pretty much every town, city across South Africa.
We take a look at what brands we have represented in each of those nodes, hubs, cities, towns, and we've got a pretty good idea of, you know, which brand's complementary. For example, if you've got an Exact somewhere, will Jet trade well there? The answer is obviously yes. We're able to do a bottom-up plan that we typically run five years into the future. For the purposes of what we share today, we've taken, I think, a much more closer look at the next three years. I think we're pretty comfortable with the 1,000 new stores. The caveat to all of that, though, is getting sensible rental deals. We're not opening stores for the sake of opening stores.
They've got to be profitable, and that's the kind of to-and-fro that, you know, goes into the negotiations that we have with landlords. Can't really give an answer in terms of actual space. That's very variable. It depends on the size of stores that we choose to open. We also have got a big drive to increase store trading densities. I mentioned that in the presentation. That means if we've got stores that are potentially oversized, we're gonna shrink those as well. If we've got stores that have kind of outlived their purpose, in other words, a particular shopping node has perhaps regressed or died because of economic reasons or whatever, we're not gonna trade on those going forward.
It's very much a bit of a mix, but I think the point is we'll trade, in all likelihood, through another 1,000 doors over the next 3 years. I think that's just an indication of the conviction we've got in the brands and the strategy. The next question. Oh, this is a nice one. Thanks for a good presentation and a good set of results. That's a nice way to lead into one. The RLC data indicates that you're gaining market share. From whom do you think it's being gained from? Nice question, but again, almost impossible to answer. We've had gains. You know, obviously, we disaggregate that RLC information into the different sectors, men's, women's, et cetera. We've had gains in pretty much all of them.
You know, if you go back to the stats that we shared against the Stats SA numbers and the RLC numbers, it's been a pretty consistent picture throughout. Again, almost by definition, it's against the market as a whole. Yeah, pretty much, most of our competitors, very difficult to drill it down. I think that's, you know, that's an assessment you have to try and make yourself. Okay, Jane, I think this one is for you. With buy now, pay later coming in, will you still record the buy now, pay later purchase as a cash purchase? And does TymeBank assume credit risk on these sales?
Yeah. Buy now, pay later will be deemed as a cash purchase. TymeBank does assume the credit risk on these sales. They advance the money, the customer gets to take the product immediately. I see there's another question as well about how does the buy now, pay later fit with our core credit products? Well, look, we see these as complementary to the existing store card product that we have. As Anthony said, in his presentation earlier, we think this will unlock for a new and younger customer who maybe doesn't wanna open credit just yet, but wants more payment options to be able to pay for their products.
Thanks, Jane. I think that's a very clear answer. Here's a question, and there are a couple, I think, on the dividends. I'm gonna try and link these together. Please, can you clarify the update to dividend policy going forward? Is the 2x cover still intact for the full year, and are there prospects to reduce the cover in the future? Again, I think, you know, if I just take us back to what we communicated prior to today and then again earlier in the presentation, we were running at quite a low cover, I think, for retail. You know, I guess in the absence of COVID, it was a fairly comfortable place to be.
I think COVID has just reinforced the, you know, really the idea in our own minds that given the economic uncertainty that's likely to persist for some time, a higher cover is sensible. I think linked to that, I mentioned we've got a very, very strong pipeline of both organic and inorganic potential investment opportunities. It was very much, I think, a theme of today's presentation just to show how that's really underpinned our growth and success over the, I guess, our history, but particularly more recently. Those organic and inorganic opportunities need to be funded. The by far the cheapest, simplest, and most efficient way to do that is through internal cash as opposed to just paying cash out in dividends.
As I mentioned as well, we've taken a far more conservative view on the dividends cover for the first half. Again, that's because we're sitting in load shedding. As much as we're feeling that we, you know, we're past the worst of COVID, the reality is nobody really knows. I think it's unlikely that we would be dropping the cover anytime soon, and I think around about the 2 times is likely where it's going to sit at for the foreseeable future. Okay. Bongiwe, I think this is one for you. Capital allocation and cash. Basic calculations indicate that by the end of the year, you'll be in a net cash position absent of any acquisitions. How do you feel about the optimal capital structure for the group?
Great. Thanks, Anthony. Good question. I think also there's another one about the net debt to EBITDA reaching 1.3-1.5 times as previously guided. With the rates we're trading today and the cash, higher cash conversion cycles, I think definitely will be below what is previously guided as 1.3-1.5 times in the absence of any obviously significant acquisitions or other. In terms of also capital allocation, you know, it's not only just acquisitions, it's also organic growth opportunities. I think Anthony earlier spoke of the opportunities we see in the market. In my presentation as well, I showed opportunities we see in the market in terms of either stock growth or brand growth in different sectors or the new brands coming on stream.
I think what is important for us is the returns, getting the right returns on wherever we put our cash, you know? Thanks.
Thanks, Bongiwe. Good answer as well. Jane, I think this is back to you. It's quite a technical question. 12.2% fewer credit customers year-over-year, and a 20.9% increase in gross bad debt expense perhaps indicates a tougher data collection experience. Please, can you reconcile these metrics to a reduced provision?
Thank you. The 20.9% gross bad debt expense, of course, is the amount of write-off that we have taken in this half year versus the last half year. Now, in the last half year, of course, we were in the middle of the hard lockdown and the pandemic, and we gave a number of our customers payment holidays. We gave them an extra two months to be able to pay their accounts. That effectively meant that we didn't write off any accounts for a two-month period. When you look at the write-off for this half year versus last half year, of course, it's artificially higher because of that payment holiday that we gave.
If I actually have a look at the write-off for the second half of the year and how I think I'm gonna end the year overall, it will be negative. It will be a negative growth. We're gonna reduce our bad debt by the end of the year. Now, given that I can see the performance of these accounts, and I can see the amount of cash collected, and I can see the write-off the second half of last year, that feeds into my provision models, and my provision models automatically say, you need less provision because you've got a better quality of book already. That's why the provision ratios are down while you're seeing an artificially high write-off for this half of the year.
Thanks, Jane. Well answered without any calculators in front of you. There are several questions, I guess broadly, asking how Jet has performed and if it's in line with the expectations. I think both Bongiwe and myself tried to cover that in the slide deck. I think to summarize, very much on track to meet my expectations for the year. I made the comment that a year ago, Jet was on its knees and life support. I mean, that was literally the case when we bought it. What's underpinned their success is suppliers coming back on board the minute TFG was seen to stand behind them. In other words, they knew they'd get paid. The ability to get back into stock, which has been progressive across different categories.
Certainly now going into summer, I think we're pretty much back to exactly where we need to be from a stock point of view. They've had very tight cost control. They've leveraged very strongly off the TFG platform. Yeah, I think we've shared in previous presentations just what we've managed to take out of their cost base, particularly in areas like IT, HR, et cetera. Again, I think most pleasingly has been as a subcategory within Jet. I mean, almost all of their categories have bounced back very nicely, but the one that's showing, I think, real potential is Jet Home. Both as a store-in-store, we've got Jet Home as a modular offering based, you know, it's customized based on the size of the Jet store. Comes in four different sizes.
Trading, literally trading the lights out. We over the last couple of weeks have opened 5 Jet standalone home stores. They've also traded incredibly well, and we're in the process of just seeing which sizes work, which consumer nodes will be suited to Jet Home. We'll open another 5-6, I think, before the end of March. You know, that sets us up, I think, for next year. Then what else? Oh, this is nice question. Can you discuss how the Chinese clothing exporter, SHEIN, has impacted the different geographies you operate in? And I guess broadly what we think about it. Very good question. I mentioned SHEIN earlier on. I mean, for those who... Anybody who doesn't know about SHEIN is one of the fastest-growing fashion retailers in the world.
It's very much a hyper-speed quick response model. They can manufacture and get product kind of shipped in less than two weeks. Again, I think it goes back to almost linking back to the first question I answered around why we are in quick response local manufacturing. Without that kind of ability to turn product on and off, SHEIN becomes, I think, a real issue. At the moment, SHEIN is mainly young ladies wear. That's their primary focus. You know, from a South African portfolio perspective, we've got a very limited exposure there. Again, our product in that space is the most quick response product of any of our areas because by nature, that fashion is very quick.
I think the other point, again, just going back to SHEIN's a pure play. They don't have physical stores. Again, I think, if you cannot compete in a digital world, if you can't take a young Gen Z's order efficiently in a way that they want or let them shop in a way that they want digitally or off an app off their mobile phone, if you can't fulfill quickly, and I mean really quickly and get it to them without any friction, then I think you're gonna be vulnerable to SHEIN.
I think, yeah, in a way, I wouldn't take SHEIN lightly, but at the same time, I think what they really do is they reinforce a lot of the strategies that we've been putting in place. Okay, here's a question on supply chains and stock. Are you well-stocked for peak Black Friday and holiday trade, and how early did you take delivery of important merchandise? Sounds like somebody was sitting in our boardroom when they asked that question. Yeah, I think we, with very few exceptions, we're pretty much at 100% of what we need for certainly for Black Friday and hopefully for Christmas trade as well.
Again, the majority of what we sell is, and I'm talking South Africa, firstly, the majority of what we sell here is clothing, and as I said earlier, around 72% of our apparel is locally produced, so we haven't really been impacted by supply chain issues, I think to the extent that maybe others have. Then to the extent that we do import, we've got, you know, we were kind of given a warning months ago that these bottlenecks were likely to, you know, to form.
Okay.
We did import a lot of product early. You know, Bongiwe showed some of our stock metrics.
Mm-hmm.
They look absolutely fantastic, and I'm super pleased with them. The reality is they're somewhat inflated anyway because we're holding stock in advance more than we necessarily would have for Christmas already.
Yeah.
Yeah, I think we're good there. I think, you know, just touching on, I think Gary and Dean and Justin all touched on their own stock positions.
Yeah.
I think Australia is very well stocked. They, again, you know, very dependent on China and have built up stock to cope with all the, you know, kind of opening and closing that they've had to deal with. We've had a bit of an impact on the UK, but again, it's, you know, the UK is only coming on stream on a more gradual level, so it hasn't ended up in a situation where we've got stock shortages. It's just not quite where we'd want to be. Bongiwe, this is one for you. Please could you give some CapEx guidance for the first year?
Great. Thanks, Anthony. I think also there's another one about space growth in the current period.
Yeah.
We grew space in the current period, I think I said, by 3% to 1.2 million sq m in Africa. For the rest of the year, I think we spent about ZAR 740 million in CapEx as a group. I think by year-end, we should be just about ZAR 2 billion and slightly above ZAR 2 billion for the year and circa 200 stores as a group, new stores.
Fantastic. Thank you very much. I'll answer this one. You mentioned inorganic growth. Can we infer that TFG continues to look for further acquisitive growth should the opportunity present itself? Absolutely is the honest answer. You know, if you go back and look at our group that exists today, probably just over 50% of our group came through acquisitions. We typically look to find businesses that we can buy at a reasonable price, that, you know, fit into our group strategy. There's got to be a good fit with the management team, the same kind of DNA, plug them into our platform, and then scale them to a point where they become really profitable from a group perspective. We continue to, I guess, be approached by a number of potential sellers.
We also have got some pretty good ideas in terms of the verticals that we want to be in and areas to expand in. I'm afraid I can't really be much more specific than that. The short answer is that's part of our DNA. That's what this group is, you know, about a lot. Okay. Have you noted any normalization of homeware demand over the past few months? Actually, not really.
Mm.
I think, you know, if you just kind of go to the backdrop, even though things are opening up, people aren't really traveling internationally. People are still, by and large, working from home. I think people have realized that homes are actually quite important to most of their lives. I think that shift is probably semi-permanent. I don't think it's gonna go away anytime soon. Actually, our trading's been nicely up in homewares given that last year, in particular, we did have stock issues. You know, there were some severe homeware supply chain issues, kind of this time last year, but it continues to trade well. What else is here that we haven't really covered? How have your sales been impacted by load shedding, especially in October and November? What do you foresee the impact on revenues in the future?
It's a really, really tough question to answer, so we do track the hours lost. That fits with the, you know, the slide I showed right in the beginning of the presentation showed the loss of trade in South Africa. That was really the combination of that week of unrest and looting together with the load shedding that we've had more recently. What makes it difficult to estimate is that if you have a 2-hour load shedding in a shopping center, say from, I don't know, 1:00 P.M. to 3:00 P.M. in the afternoon, the reality is we don't get a bounce back later in the afternoon, so whatever hours we calculate, it's bigger than that. You know, we showed the October growth rates for South Africa up 12.5%. That was with load shedding in there. Yeah, it...
We just hope it gets better and certainly hope it doesn't get any worse. You know, unfortunately, it's become so recurrent in South Africa that in some ways it's almost part of the base now. I think those are pretty much the questions. Yeah, guys, I think that's it. Thank you very, very much. Thank you to my fellow question answerers.
Yeah.
Thanks, guys. Gary, Dean, Justin, you guys did so well that no one had any questions for you. Apologies for that, but thanks for being on standby. Wishing everybody a happy and safe rest of the day. Thank you.