TFG borrowed R1bn to buy back shares that are now worth R553m

In September and October 2025, TFG Limited embarked on an ambitious share buyback, spending R1 billion to purchase 3% of its shares at an average price of R105.87 per share. This was the first buyback in the company's history, as the board believed the shares were trading below their intrinsic value, which would provide long-term value to shareholders.

However, ten months later, the share price has languished near R50, its lowest level since 2010, having declined by more than half since the initial buyback. According to its 2026 financial results, the company raised only R0.5 billion in net debt to fund the buyback. CFO Ralph Buddle explained that despite a challenging year, the company generated sufficient cash to pay dividends, but the increase in debt can be attributed to the share buyback.

CEO Anthony Thunström defended the decision, stating that the market conditions in September were still favorable and that he recognized buybacks as valuable for returning value to shareholders. However, the company continued to buy back shares even as its share price fell, repurchasing a total of 3.4 million shares at an average price of R110.17.

This reduction in the number of shares outstanding can boost earnings-per-share (EPS) calculations, making the company's headline earnings per share appear better than they would be otherwise. TFG's decision to borrow over R1 billion to fund the repurchase resulted in an additional annual interest cost of R58 million, or 18c per share.

The company has retained the repurchased shares as treasury shares within its subsidiary, Foschini Stores (Pty) Ltd., and has not yet decided on their future use.