The shrinking market cap

Winter has definitely arrived for the

House of Hulett, whose sigil could well be redrawn as cash piles dwindling with creditors in pursuit.

Tongaat Hulett led the rout, with scandals aplenty, R11bn of debt and a share price that tanked by 83% in a year before it was suspended.

Now, with the publication of its interims, it is the turn of former stablemate Hulamin to feel the wrath of the market. Its revenue is marginally down but headline earnings dropped by 174% to a loss of R63m.

The company’s market capitalisation has put in a performance that would be familiar to fans of Alice in Wonderland after she quaffed the “Drink Me” potion, shrinking from R8.6bn on listing in 2007 to its current R649m, an epic destruction of shareholder value that does not appear to be accompanied by much in the way of a mea culpa from those responsible. Commentators have raised eyebrows about the rewards management have been given for overseeing such a bloodbath.

The company blames its travails on factors including a particularly poor performance from Hulamin Extrusions, which suffered production disruption after an equipment malfunction, leading to lower sales volumes.

Then there were challenging trading conditions, export sales to the US messed up by blockages in the distribution channel, customer overstocking and a softening market. Hulamin says it is taking corrective action to improve profitability via cost reductions and achieving higher sales volumes and prices, but the market may need some convincing.