CA Sales explores expansion
CA Sales Holdings Limited ( CA& S Group) continues to explore expansion initiatives to grow its principal and customer networks despite uncertainties brought by the ongoing Covid- 19 pandemic.
In its six months period, the group recorded 54 percent increase in profit to R96.2 million. Revenue increased by 2.8 percent to over R3.5 billion. Gross profit only increased by 1.6 percent to R499.1 million due to the basket mix, specifically the increased tobacco sales at lower margins.
Commenting on the published results, CA& S Chief Executive Officer, Duncan Lewis said the group will continue its expansion, where feasible, by growing its principal and customer networks and making value- adding acquisitions. “The duration of the challenging economic environment and difficult trading conditions due to the COVID- 19 impact, is still uncertain. However, the group is well positioned with a strong balance sheet and a diverse geographical presence across Southern Africa.”
He said the group’s diversified portfolio should continue to enable it to deliver sustainable results for the remainder of the year.
During the period, Lewis highlighted that the focus on cost management resulted in an increase of only 5.6 percent on overheads excluding foreign exchange profits and losses and impairments. During the second quarter last year, the South African rand devalued to the Botswana pula and this resulted in a significant foreign exchange loss of R49.1 million in the Botswana operations, which was not repeated in the current period as the rand was fairly stable against the pula. “This positive turnaround contributed to the increase of 72.1 percent in headline earnings for the group to R94.5 million.”
However, the group was also affected by political unrests which happened in South Africa in July this year. These impacted on deliveries to the border countries. Lewis pointed out that trading levels are not back to the pre- COVID- 19 levels as certain trade restrictions with regards to trading days and trading hours are still in force and are negatively affecting the sales.
The group also saw its goodwill of Expo Africa group of companies, that derives its revenue from marketing and promotional services in the Southern Africa region, further impaired by its remaining value of R6.6 million. “These businesses have been impacted negatively by intermittent lockdown regulations and have been loss making with limited expectation of a profitable turnaround.”