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Tuesday, 14 July 2009

Foshini fooling investors

Foshini published their Reviewed Unaudited Preliminary Condensed Results for the year ended 31 March 2009:

http://www.foschinigroup.co.za/ir/final_results/fr_2009/downloads/foschini_provincial_results_2009.pdf

First item under Salient Features:

• Retail turnover up 5,5% to R8,1 billion

In nominal terms, Yes!

But, we live in a real world.

In real terms:
• Retail turnover DOWN 2.8% to R8,1 billion

Who do they think they are fooling?

Foshini will most probably admit that all the nominal values they present in their results are obviously not real values.

I wonder if they will admit that all those nominal values are basically meaningless and that only their non-existent real values are the only meaningful values?

I also wonder whether they will own up to the fact that because their board of directors selected the historical cost basis to prepare their financial statements, their accountants have unknowingly destroyed R414 million (at May 09 CPI value) in the real value of their Retained Earingins during their 2008 financial year and that they are unknowingly destroying even more than that this current year?

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