Ver­i­mark bets on ‘best Xmas’

• In­ter­ims take a dent from ad­di­tion of new prod­ucts, but re­tailer con­fi­dent they will pay off in fes­tive de­mand

Business Day - - FRONT PAGE - Giulietta Talevi Writer at Large tale­

Ver­i­mark – the com­pany be­hind Bauer pans and Shogun knife sets — is bet­ting on its “best Christmas ever” after in­tro­duc­ing a raft of new prod­ucts.

Ver­i­mark – the com­pany be­hind Bauer pans and Shogun knife­sets — is bet­ting on its “best Christmas ever” after in­tro­duc­ing a raft of new prod­ucts.

De­spite des­per­ate times for South African con­sumers, CEO Mike van Straaten said he was “very ex­cited” about Ver­i­mark’s monthly sales after the re­sults.

“The growth we’re show­ing in re­tail part­ners is sub­stan­tially higher than those of our part­ners,” he said.

The CEO, whose rapid-fire pat­ter sounds part sales talk, part race­horse com­men­tary, said: “I don’t want to over­sell it [but] I’m per­son­ally op­ti­mistic that it will be one of our best Christ­mases ever.”

Re­leas­ing in­terim re­sults on Thurs­day, Ver­i­mark grew rev­enue from con­tin­u­ing op­er­a­tions by 13.7% to R209.7m.

A big jump in new prod­ucts — al­most 86% up on the pre­vi­ous pe­riod — meant a sim­i­larly large in­crease in ad­ver­tis­ing spend, which con­trib­uted to a slide of al­most 44% in pre­tax profit to R2.2m.

“We had a lot more new prod­ucts tested — so you load your costs – and sales kick in after two to three months, which will ben­e­fit the busi­ness in the months ahead,” he said.

Among what Van Straaten hopes will be a “home run” — in­dus­try talk for a big win­ner — is an ad­di­tion to the ubiq­ui­tous Bauer cook­ware range, whose prices shot up after the rand’s col­lapse in 2015.

Now the com­pany had brought in a R199 pan, and Van Straaten said “we can’t keep up with de­mand”.

In the di­rect re­tail in­dus­try, a “big-hit­ter” is vi­tal and can mean bil­lions of sales for sim­i­lar com­pa­nies in mas­sive mar­kets such as the US. But in much smaller SA, Van Straaten said a com­pany like Ver­i­mark needed “a home run ev­ery two to three months”.

As for the rand, Ver­i­mark takes some for­ward cover.

“We do hedge but it is a gam­ble ei­ther way: [for ex­am­ple] if you take all for­ward cover and the rand does im­prove….

“What we do is prob­a­bly go half­way – but [we are] not to­tally un­hedged be­cause that would be too dan­ger­ous.”

Part of Ver­i­mark’s strat­egy to buf­fer it­self against the rand’s volatil­ity is the lo­cal man­u­fac­ture of some prod­ucts, which Van Straaten said would be ready in “early 2018”.

The com­pany is also work­ing on sell­ing Ver­i­mark prod­ucts abroad but still has lit­tle to show for its in­ter­na­tional ex­pan­sion plans in the re­sults.

It says that sales will man­i­fest only in about 18 months.

Van Straaten, who once tried to buy out mi­nori­ties back in 2009 and who still owns 49.1% of the shares, said Ver­i­mark re­mained in­tent on be­ing listed, de­spite the cost.

“I do be­lieve it is still vi­able for us to be [on the JSE].

“If I look at the net as­set value against the share price, it is to­tally dis­pro­por­tion­ate. There’s a lot more value in Ver­i­mark, but we need to show a con­sis­tent per­for­mance,” he said.

Ver­i­mark’s share price fell 3.53% on Thurs­day to close at 82c. In the year to date, how­ever, it has gained 91%.

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