Ellies Holdings, which provides consumer-oriented audio-visual equipment and renewable energy solutions, this morning reported a lacklustre start to its financial year, but is hopeful of a better, although tough, second half.
The group reported a "disappointing" decrease of 40.9% in headline earnings per share, to 25.09c a share, for the six months to October, while revenue dropped 3.8%, to just over a billion rand.
CEO Wayne Samson says the results were impacted by the slow launch of Open View HD, which only happened towards the end of the period, as well as the benefit from Eskom's residential mass rollout in the previous comparative period.
Samson says stripping out these two factors, the group's core business grew 20% during the first half of the year. He notes business from MultiChoice sales is "steady" and the group is seeing decent prospects for hydroelectric power items from Africa.
Ellies expects to have a better second half, although Samson expects it to be "tough". The group is still hopeful digital television will launch soon, an event for which it has invested as it has an agreement with Altech to distribute its decoders into the retail market.
The group expects digital terrestrial television to launch this year and says it has "all systems in place to immediately benefit once the rollout commences. Production machinery has been installed to ensure increased local production and employment."
The Department of Communications has yet to announce a firm date for the much-delayed launch, which will require about 11 million households to purchase set-top boxes so the new signal can be received on older television sets.
The listed company's operating profit dropped 38.6%, to R116.4 million, from R189.7 million in the previous comparative period. Earnings and headline earnings per share also decreased by 40.7% and 40.9%, respectively.
Ellies believes the current tough trading environment in its sector will continue to be a challenge. Samson says "we look forward to what 2014 holds for the group as we will be focusing on increased local production and research and development projects".
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