THE FINANCE GHOST
CA Sales Holdings delivers the goods
CA Sales Holdings operates in a niche segment of the fast-moving consumer goods industry, where it helps its clients to move their goods through retailers and into the hands of consumers.
Until now it has mostly flown under the radar, despite producing some very good results, the latest example of which is a 31.2% jump in headline earnings per share (Heps). With share price growth of about 30% in the past six months, it’s clear to see that the performance supports the share price move.
This result was driven right from the top, with revenue growth of 18.2% in a period that was characterised by high levels of inflation in consumer goods. Although volumes came under pressure in many retail categories, CA Sales managed to navigate this environment successfully, with a significant increase in operating profit of 32.4%.
RFG Holdings: the proof is in the pie
Food manufacturer RFG Holdings has avoided the trap of trying to maintain or grow market share at all costs. Revenue growth in the 21 weeks ended 26 February 2023 was 7.4%, with price inflation coming in at 14.7%.
Those who understand the relationship between price and volumes will immediately recognise that volumes must have fallen sharply. Indeed, they were down by a meaty 11%, reflecting the pressure facing consumers. The balancing figure is the Today acquisition, which would be excluded from like-for-like numbers.
Importantly, RFG notes that the volume decreases were similar to overall category performance, which implies that market share was maintained.
RFG has highlighted the pie category as a winner in this period, with a turnaround in the Today business that is far more palatable than the move in the RFG share price this year, down more than 30%.
York Timber: not much good in these woods
If you’re investing in lumber, you need to have patience enough for a forest to grow. Personally, that’s never been my strong suit, which is why I’ve never been bullish on York Timber. Another reason for my lack of bullishness is that the York numbers always seem to look better when the trees are still planted in the ground.
The share price has been on a bit of a roller-coaster ride over the past few years. York is down over five years but has more than doubled since March 2020. I wouldn’t bet on it doubling again from here, as the trees are blowing in the headwinds of production challenges, limited pricing power and significant diesel costs to offset the effects of load shedding.
For the six months ended December, there was a drop in Heps of between 27% and 32%. On top of that, cash generated