DURBAN – Verimark surged more than 17 percent on the JSE yesterday after the consumer goods company flagged that it was planning to delist the company after 13 years on the bourse.
The group said it received notice from the Van Straaten Family Trust, the majority shareholder, of its conditional, non-binding intention to reduce its stake to a minority interest and thereafter apply for its stock to be taken off the JSE.
The Van Straaten Family Trust owns more than 56 percent of the group.
Verimark, which listed in 2005, said the proposal was subject to the requirements of the Companies Act.
It said shareholders had established an independent board consisting of M Kabi, NP Gosa and AT Nzimande to consider the terms of the proposal.
“The proposal, if successfully concluded, may have a material effect on the price at which the company’s securities trade on the JSE,” the group said.
The company stock shot up to R1.07 from Friday’s closing price of 91 cents on the news. Verimark reported a 1 percent decline in revenue to R207.5 million for the six months to end-August, down from R209.7m last year. It attributed the decline to lower consumer confidence in the retail environment as a result of the technical recession and most retailers tightening up on stock holding, resulting in lower sales. The group’s operating costs increased 12 percent during the period to R98.1m, up from R87.6m, due to an increase in sales staff costs, in order to improve store presence and improve revenue.
Verimark said the costs were further escalated by an increase in the fuel price, which led to an increase in delivery expenses, as well as an increase in rental costs, in line with the increase in Verimark Emporium store count to 92 stores, which was done to improve the customer service functions across South Africa and into Africa.
Verimark reported a loss before taxation of R2.8m, compared with a profit of R2.2m a year earlier. It said it planned to strengthen its footprint in Africa, as well as the rest of the world, through the international division.
It said it relaunched its website to gain traction with a growing online presence on social media. “This will continue to be a focus for Verimark, especially with the recent volatility of the rand against foreign currencies,” the group said.
Verimark yesterday closed 10.99 percent higher on the JSE at R1.01.