Ellies earnings swing to profit
Ellies Holdings has seen headline earnings per share (HEPS) swing to a profit of 3.05c, for the six months ended 31 October 2017, after reporting a loss of 4.6c a year ago. This as the group's turnaround strategy "is resulting in the expected outcomes".
"What is pleasing is that the turnaround has been driven not only by the reduction of costs as expected but also top line growth," the company said in its results statement.
Earnings per share (EPS) also swung to a profit of 3.3c, from a loss of 31.49c at the end of October 2016. Revenue from continuing operations grew by 8.1% to R697 million while no dividend was reported.
The Ellies group is a Southern African manufacturer, importer, wholesaler and distributor of lighting, electrical and electronic products and solutions to the residential and commercial sectors. It also supplies aerial and satellite equipment, accessories and hardware.
"The state of the economy and reduced consumer spending remain a concern and management remains vigilant in driving efficiencies and exploring growth opportunities, without taking on undue risk," the group said.
Despite the "trying conditions of the economy" and a reduction in consumer spending, the Ellies consumer segment increased its turnover to R703 million, up from R650 million for the same period ended 31 October 2016.
Operating expenses were down to R166 million, from R203 million a year ago. The segment returned a profit before interest and tax of R35 million for the period compared to a loss of R15 million in the previous corresponding period.
Ellies says the satellite market remains robust and exceeded its internal forecasted numbers, while other product lines "held their own" in a highly competitive environment.
"Our corporate division is starting to show traction, and is very much expected to be the catalyst for growth going forward."
The group is also aiming to become a recognised brand in the renewable energy and energy efficient sector, mainly focusing on PV and alternative energy efficient products and solutions. It says it has signed a number of blue chip clients in the corporate lighting division and expects to make significant strides in this area.
Last month Ellies CEO Wayne Samson resigned and will leave at the end of February 2018 after 28 years with the company. Chairman Elliot Salkow and CFO Adrian Bock will act as interim joint-CEOs until a new CEO is found.