Cleaning out the stable

Despite a sterling attempt from one of this column’s regulars, the Distribution & Warehousing Network, this week’s echoing raspberry goes to another small cap that’s got smaller since listing: Deneb Investments.

This junior member of the Hosken Consolidated Investments stable has a bitty portfolio of investments in property, branded product distribution, and industrial and textile manufacturing.

Its results show a reasonable performance from its continuing operations, dragged down by some absolute howlers from operations that are in the process of being discontinued.

The three culprits are headed by Winelands Textiles, which is discontinuing a proportion of its business and consolidating the remnants into a single production facility in Worcester.

Then there’s the office automation business, which is attempting to flog off outlying branches and concentrate its efforts in Gauteng.

Finally there is the branded sporting goods business, which has shipped in new management to axe loss-making brands, improve operational efficiencies and optimise management structures with a view to dropping the break-even point.

Away from the restructuring carnage, the rest of the group struggled to shine given the general economic malaise, but it did manage to nudge operating profits up a few percentage points. It has made a couple of acquisitions — including the Just Fun group, which should complement its existing Prima Toys business in the toy distribution market.

Now it needs to complete its restructuring and return to profit.