DURBAN - ELLIES Holdings reported a sharp turnaround in its fortunes in the six months to end October, lifted by the performance from its trading and distribution segment.
The investment holding company for businesses involved in the manufacture, trading and distribution of a diverse range of products and services, reported a 143 percent surge in profit after tax to R12.9 million, improving on a loss of R30.1m reported last year.
The trading and distribution segment contributed a profit of R24.49m while the manufacturing segment reported a loss of R1.13m.
The group said the trading and distribution segment experienced a pleasing six months despite the disruption attributable to the migration of the logistics and warehousing functions during this period as well as the Covid-19 outbreak.
“The manufacturing segment continues to underperform and posted a significantly reduced loss for the first half of financial year 2021. This is attributable to the lack of traction on the digital terrestrial TV (DTT) project and continued under-recovery of fixed costs. Management is focusing on and evaluating alternatives,” Ellies said.
The trading and distribution segment operates out of 19 branches in South Africa and wholly-owned subsidiaries in Namibia, Botswana and Eswatini.
Its manufacturing segment manufactures, sells and distributes various products related to markets Ellies serves, including satellite dishes, terrestrial aerials, TV brackets, mounts and shelving solutions.
Despite reporting improved halfyear results, the group said the trading environment remains constrained in the wake of the post Covid-19 economy.
“The group’s principal revenue generator, installations of satellite dishes, has shown a declining trend in the past reporting periods.
“During the lockdown restrictions, MultiChoice was an essential services provider and partnered with Ellies, which resulted in a surge in new subscriptions as people were homebound,” Ellies said.
However, the group said new subscriptions have tapered off since restrictions were eased.
Group revenue increased by 1.9 percent to R656.7m while earnings before interest, tax, depreciation and amortisation (Ebitda) surged by 1 261.3 percent to a profit of R33.4m, up from R2.5m a year earlier.
Its earnings per share ( Eps) increased by 161.2 percent to 2.56 cents a share, improving from a loss of 4.18c and headline loss per share (Heps) increased by 181.6 percent to 2.37c, improving from a loss of 2.91c compared to last year.
“While the growth in the South African economy remained subdued and was influenced by the economic effects of the Covid-19 pandemic, the difficulties experienced at Eskom contributed positively to the group’s results through the sale of alternative energy solutions,” the group said.
Ellies’ shares closed unchanged at 11c on Friday.
BUSINESS REPORT