Balls up at All Joy

No past­ing over al­le­ga­tions of non-pay­ment and stay­ing at For­mula 1 ho­tel

Finweek English Edition - - Companies & markets - BY MICHAEL COUL­SON

ALL JOY FOODS at­tracted quite a fol­low­ing in the mar­ket at one time, which it lost af­ter a cou­ple of aborted takeovers, the dis­clo­sure of an ap­par­ent over­state­ment of his­toric prof­its and a lapse into losses. I don’t think its re­ha­bil­i­ta­tion will be helped much by founder, chair­man and CEO Marci Pather’s re­marks about its latest re­sults.

In an in­ter­view with a daily news­pa­per Pather at­trib­uted an im­prove­ment in head­line earn­ings to an in­crease in rev­enue and the im­ple­men­ta­tion of a cost-cut­ting turn­around strat­egy. That’s highly mis­lead­ing: the com­pany ac­tu­ally recorded a R148 000 loss pre-tax and the only rea­son there were any head­line earn­ings is the R473 000 write-back of de­ferred tax pro­vi­sions.

True, the six-month pre-tax loss is less, pro rata, than the R2,4m for the pre­ced­ing 16 months. But to con­sider that a tax write-back can in any mean­ing­ful way turn a loss into a profit is to de­ceive your­self.

If you look at the al­ter­na­tive and some­times cruel yard­stick of cash flow, while there was an in­flow at op­er­at­ing level over­all dur­ing the six months, the cash po­si­tion de­te­ri­o­rated by R800 000, push­ing the defi- cit up to al­most R10m. Not much joy there, I’m afraid.

How­ever, it’s good to hear that Pather is pos­i­tive con­cern­ing the ac­qui­si­tion of Mrs Govender All-in-One curry paste. Mrs Govender is a New South African ver­sion of Mrs Balls of chut­ney fame, start­ing her busi­ness with her hus­band in a one-room flat in Mar­itzburg in 1990 and build­ing up an in­ter­na­tional clien­tele that in­cluded the ul­ti­mate ac­co­lade, Har­rods.

When last heard of, Mrs Govender was threat­en­ing to sue All Joy, al­leg­ing that she had been paid nei­ther the R125 000 cash com­po­nent of the R250 000 buy­ing price for her paste nor been is­sued the 192 000 shares meant to settle the other R125 000 (with the share price down to 50c, she’s los­ing money on them any­way) and com­plain­ing that when the com­pany took them up to Jo­han­nes­burg she and her hus­band were booked into a For­mula 1 ho­tel – a fate, it must be agreed, hardly bet­ter than death.

Maybe Pather’s kind re­marks about the prod­uct will en­cour­age the par­ties to settle and avoid fur­ther un­just en­rich­ment of Messrs Sue, Grab­bitt & Run.

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