TFG’s FY25 results reflected soft top-line growth with solid GPM improvement. TFG Africa’s weak turnover expansion suggests flat volumes, and we think it reflects a return to normalised growth following several acquisitions in recent years. The margin enhancements reverse longer-term declines and reduce the operational risk of the division. TFG Credit recorded good EBIT growth in FY25, but declining interest rates could reduce the yield on the book in FY26.
TFG London sales were boosted by the White Stuff acquisition, but the underlying business is still struggling. We analyse the historical performance of White Stuff and find a business with an inconsistent and unimpressive performance. Turnover growth over the past seven years has been largely flat, and the 20% y-y surge in sales following TFG’s acquisition is surprising. We think the surge may be promotionally driven and might not be sustainable. White Stuff is shifting to more concession stores, contrasting TFG London’s strategy of reducing its reliance on department stores.
We were surprised that the CEO and CFO of White Stuff both resigned in May 2025, only seven months after TFG acquired the business. We would have expected a lock-in of key management, and the management changes could increase the acquisition’s risk, in our view. We doubt that White Stuff will be the catalyst to improve the performance of TFG London.
We find that TFG Australia may be losing market share despite expanding its store footprint. We think management should slow store rollouts and trim the store base to improve its average sales per store.