Outdoor Warehouse is part of Long4Life’s sport and recreation division.     Supplied
Outdoor Warehouse is part of Long4Life’s sport and recreation division. Supplied

Long4Life in credible performance

By Sandile Mchunu Time of article published May 15, 2020

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DURBAN - Long4Life's Personal Care and Wellness division was the star performer for the investment holding company for the year to end February, as its chief executive, Brian Joffe, warned that challenging times lay ahead due to Covid-19.

The group’s trading profit was up by 3percent to R467.2million, a trading margin of 11.4 percent, excluding the impact of IFRS 16, while it was up by 15percent to R520.1m, including the impact of IFRS 16.

Joffe said Long4Life had delivered a credible performance in the past financial year, which was its third year of operation since its JSE listing in 2017.

“The trading performance was better than last year, which is notable, considering the extremely difficult trading conditions and decline in consumer confidence,” Joffe said.

However, he warned that the Covid-19 would provide a challenge in the future as the economy was already under-performing, which has manifested in South Africa's rating downgrades.

“I have experienced many challenging events during my 50-year working career, but nothing comes close to the experiences of the first few months of 2020 following the outbreak of the Covid-19 pandemic. This extraordinary time will shape a new future,” Joffe said.

The group said it was taking all possible steps to mitigate the risks by conserving capital, which included managing working capital commitments, cost containment and suspending all capital expenditure.

Personal Care and Wellness trading profit increased to R67.2m, a 73percent increase from R38.9m compared to last year, mainly from the inclusion of two beauty acquisitions as well as ClaytonCare being incorporated for the full year.

Group revenue was up by 12percent to R4.1billion and headline earnings inched up by 13percent to R367.2m, while headline earnings per share increased by 13percent to 43.8cents a share. Long4Life has three business segments which are Sport and Recreation, Beverages and Personal Care and Wellness.

In the Sport and Recreation segment, revenue increased by 9 percent to R2.29bn and trading profit declined by 1.37 percent to R316.7m.

The group said management remained committed to improving the return on assets in the division.

The Beverages division’s revenue increased by 10percent year-on-year and trading profit decreased by 9percent to R139.8m. Long4Life said Chill Beverages was disappointing as the increased investment in the upgrading of facilities and marketing initiatives did not yield the expected revenue as a result of increased competition and pricing pressure impacted margins.

During the year Long4Life spent R426.5m in a share buy-back programme by purchasing 104.1million shares at an average price of R4.10 a share. As a result of the share buy-back programme the board had resolved not to declare a dividend for the period.

Long4Life's share price closed 0.78percent higher at R2.59 on the JSE yesterday.

BUSINESS REPORT 

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