Trellidor gets bump from demand for home improvement during lockdown
Fixed-security specialist Trellidor has raised its interim dividend by a quarter, after reporting better-than-expected economic recovery in SA and strong demand for home-improvement in the midst of Covid-19.
Many retailers reported robust demand for home improvement during Covid-19, as the pandemic kept people indoors and restricted spending on travel and leisure. “Consumers have [spent] and are spending much more time at home,” said CEO Terry Dennison at a results presentation.
Dennison said that low interest rates were a tailwind for the group.
“Our view is that this is likely to continue to the short-tomedium term, which should benefit us going forward.”
Trellidor’s revenue for the six months to end-December rose 2.5% to R281.6m, amid robust sales in SA, though its rest of Africa sales weighed a little.
Profit after tax rose 16.1% to R31.1m, with the cash generated from operations jumping 50% to R48m. The group was pleased with its cost management, which included managing inventories, and was upbeat about its second half, and is not expecting a return to the type of hard lockdown seen in 2020, said Dennison.
SA generated about 87% of group sales to end-December, with rest of Africa sales falling 10% to about R31m.
“Africa is still a major part of our strategy and our African market was harder hit by the SA market, comparatively speaking,” said Dennison.
“We are certainly anticipating a better performance through the remaining part of the second half now that the land border closures have been relaxed.”
The group upped its interim dividend 25% to 10c per share — about a R9.7m payout. The group also spent R3.5m buying back about 2.2-million of its shares — or about 2% of its shares in issue before the repurchase.
The group views its shares as undervalued, said Dennison, adding that offers could see it delist. “Yes there are discussions taking place, that is inevitable, certainly in the small-cap space.
“It is a fluid environment, and the board will consider shareholder wealth creation opportunities as and when they arise,” said Dennison. In afternoon trade on Friday, Trellidor’s share price was up 5.6% to R2.64, having fallen a little more than a fifth over the past 12 months. This gave it a market capitalisation of R255m.