Appliances group Nu-World Holdings (NWL) on Wednesday reported a 2.8% increase in headline earnings per share to 156.7 cents for the six months ended February.
Group revenue from continuing operations increased by 21.2% to R1.122 billion, while net operating income from continuing operations increased by 9.7% to R70.7 million.
“Following on from an exceptionally difficult year, it is rewarding to report the beginning of a positive turnaround of the Group's trading and financial position. Notwithstanding a continuing trading environment which remains difficult and exceptionally competitive, directors are pleased to report a return to growth.
“It is anticipated that cash utilised by operations will turn positive by the end of the financial year or shortly thereafter,” the group stated.
Offshore subsidiaries accounted for 38.0% of revenues, down from 43.4% in 2011, but the percentage of income generated from offshore subsidiaries decreased from 16.6% for the interim period to February 2011 to 7.6% for the period under review.
“Our Australian subsidiaries continue to trade in an intensely competitive environment,” the group added.
Looking ahead, it said: “Internationally we continue to invest in our brands. We operate in fast changing markets in South Africa and Australia, which necessitates the introduction of new updated ranges of products. We take into account that consumers face new strains on their budgets and we believe that consumers are looking for good value for money within the known brand arena.
“The retail business in particular is not taking the market for granted and we are seeing more special deals, every-day low prices as consumers respond to competitive price points.
“During the course of the six months preceding the period under review, the Board took the decision to close the manufacturing division. A number of reasons brought the Board to this conclusion: including the burdensome and ongoing electricity price increases, increasing fuel costs as well as the high cost of raw materials.
“During the period under review, the company started to sell off the asset held for sale, including plant and machinery, moulds and dies and raw materials.
“Exports into Africa are increasing, but we have taken cognisance that the African market is discerning in terms of good quality value for money products,” the group stated.
It added: “The Group's line-up of key international and local brands, across an increasingly broad range of product categories and income groups, has produced ongoing growth over many challenging years. Directors continue to prioritise working capital management, lower inventory target levels, higher stock turns and a number of cost-cutting initiatives.” - I-Net Bridge