Key for growth will be scoring market share

t has become a habit to start a year with Nu-world Holdings as one of our company reviews. But continued coverage is justified as it continues to offer extraordinary value for patient investors content with steady profit growth and a generous yield underpin.

How a business with an unblemished record of profitability, a well-reinforced balance sheet and stout cash flows can trade on an earnings multiple of less than five times is mind-boggling.

Then again, sentiment in the JSE’S small-cap space has rarely been this jaundiced.

Nu-world’s share price suggests the market is anticipating a tough year to end-august 2019 — a reasonable assumption judging by retail sales over Christmas, the poor prognosis for consumer spending and the confidence-sapping resumption of load-shedding.

IInterim results will be published in late April — with possibly a trading update earlier. In the last financial year Nuworld reported that its core local business performed well — increasing revenue 11.4% and attributable income by 29%.

The margin looked fairly solid at 15.6%.

The difference in growth pace between top and bottom line can be explained by Nuworld directors’ reference to “various improvements in efficiencies” — including consolidated warehousing and distribution. But squeezing efficiencies might not be the only chance of Nu-world racking up profit growth.

Directors appear bullish on the group’s ability to find products that appeal to consumers’ needs for devices that are smarter and easier to use.

Encouragingly, Nu-world says summer seasonal sales,