Here’s one company that plans to list
QUICK PICKS HAVE been hard to come by recently. There’s been a welcome revival on the JSE, but mainly in sectors and shares already covered in this column. So this week I’m casting into the future to try and catch what could be an up-and-coming quick pic when it lists on the JSE, possibly before year-end 2009.
The company is called Just On Cosmetics. I’m out of my depth at the start because, first, it will be a small cap and, second, its listing is planned for the AltX. Those are both areas far better covered by colleague Marc Hasenfuss.
What caught my attention were the three businessmen backing Just On Cosmetics. Trevor Edwards, Stan Whitfield and Eric Parker all have long histories as entrepreneurs. The first two, among other ventures, founded and developed the former Enaleni Pharmaceuticals before it became Cipla Medpro. Along with them, Parker is one of the founders of Nando’s.
The three have taken a 10% shareholding in Just On Cosmetics, conditional on it listing on the AltX later this year. Why do they like the company?
“It’s an empowerment retailer poised for enormous growth to meet the demands of an ever-growing consumer market, both urban and rural, with ambitious plans to increase its footprint throughout South Africa and with long-term plans of eventually spreading throughout Africa,” says Edwards. Once listed, he says he’ll serve as Just On Cosmetics’ non-executive chairman. Whitfield and Parker will be non-executive directors.
The company currently has 27 stores, mainly in the Eastern Cape but also in KwaZulu-Natal and the Free State. Founder Mike Naidoo says it currently serves close to 14m customers a year but plans to expand aggressively.
But isn’t this a tough time for any retail business, especially one where financially hard-pressed consumers can ditch nonessentials such as cosmetics? I did mention that to some of the women who allow me to share my house with them and was given a verbal kick in the teeth and reminder that cosmetics aren’t “non-essential”.
Anyway, Just On Cosmetics argument is that it focuses on the niche health, beauty and household market. It claims that’s a large and growing sector with an estimated turnover of R15bn/year and is a market growing ahead of inflation. Its customers fall into the LSM 4-7 income groups, it says.
That’s the story. I’ll make a final investment decision when I see its prospectus. But potential investors might want to put it on the radar screen.
Pills, chickens, now cosmetics. Trevor Edwards