BIDVEST: 17,560 -41 (-0.23%)
South Africa's Long4Life beats sales estimates, shares jump
* Sales at 3.6 bln rand
* Launching beauty range: Sorbet SK-N
* Still looking for deals
(Adds analyst comment, cash capacity for deals)
By Nqobile Dludla
JOHANNESBURG, May 15 (Reuters) - South African investment
firm Long4Life on Wednesday posted forecast-beating
annual sales, boosted by drinks and beauty treatments demand in
the summer months, sending its shares up nearly 5%.
Long4Life, which invests in the leisure and lifestyle
sectors and which reported its first twelve-month period results
since listing in 2017, said sales stood at 3.6 billion rand,
topping the average analyst estimate of 3.3 billion rand,
according to Refinitiv I/B/E/S.
Total volumes for the drinks division rose by 19% and
revenue increased by 28%, it said, while the personal care and
wellness division posted revenue growth of 19%.
"In this sort of market, you don't see these sort of
figures. He (Joffe) certainly seems to have a good niche in the
(beverage) market," Cratos Asset Management Portfolio Manager,
Ron Klipin said.
Due to its seasonality, sport and recreation retail stores
did well over the holiday and Christmas periods.
At 1337 GMT, shares in Long4Life were 3.2% firmer.
Klipin said for a small capitalisation stock, the market is
paying attention to Long4Life because "you've got a guy who is
an entrepreneur, thinks outside the box and is very disciplined
in terms of capital allocation."
"So my money is on Brian Joffe and his ability to operate
successfully in this market."
Long4Life did not declare a full-year dividend as it paid
shareholders in the period via a share buyback of 159.6 million
rand ($11.23 million) and added that it had no formal dividend
policy at this stage.
"It's very difficult to make a forecast in the dividend if
we don't really know what the investment profile is going to
look like in the period ahead," Chief Executive Officer, Brian
Joffe said while presenting the results.
Hoping to boost its range of beauty products under its
Sorbet business, the company will launch Sorbet SK-N, a high-end
skin and aesthetic treatment brand, with the first store set to
open this month in Johannesburg.
"With the changing demographics of people's ages, more and
more people are looking to improve their wellbeing," Joffe said.
Since listing, investors had expected the company to go on
an aggressive buying spree, betting on Joffe, who founded the
conglomerate Bidvest Group in 1988.
But available deals have not met the group's valuation
"The group has reviewed several investment opportunities in
the past year, however, sellers' expectations and asset
valuations have not reflected the difficult economic climate and
in many instances have not met the group's valuation criteria,"
Nonetheless, it remains optimistic on investment
opportunities materialising in the forthcoming year, it added.
Cash acquisition capacity is about 2 billion rand, by
introducing gearing, Chief Financial Officer Mireille Levenstein
said at the presentation.
($1 = 14.2317 rand)
(Reporting by Nqobile Dludla; editing by Jason Neely and Louise
First Published: 2019-05-15 12:57:41
Updated 2019-05-15 16:00:29
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