Job cuts looming at Ellies

● Electronics group to focus on solar power equipment and generators as decoder sales fall

Ellies announced probable job cuts yesterday as it looks to restructure after reporting a loss in its 2022 financial year.

The electronics group, which imports, makes and sells electronic equipment such as aerials and power trolleys, as well as undertaking solar installations, would start consultations in line with Section 189 of the Labour Relations Act, it said in a statement.

Ellies had been one of the beneficiaries in the early days of the Covid-19 pandemic because MultiChoice was classified as an essential service and partnered with Ellies to continue delivering entertainment services to people in lockdown.

But it has fallen on hard times recently, reporting a headline loss in its year ended April 30, partly because of a decline in the number of satellite dishes installed and more people streaming television as fibre connectivity increased.

CEO Shaun Prithivirajh said in July in its annual results that its traditional business of installing satellite dishes started eroding at a faster rate than in the past “and, frankly, faster than we anticipated”.

That saw the company report a headline loss of 7.13c a share after posting headline earnings per share of 9.19c a year earlier.

“As part of the S189 [Section 189] process, the company and affected stakeholders will together consider appropriate measures to minimise possible retrenchments and seek viable alternatives which will assist the group in returning to profitability and ensure the continued operation of Ellies,” the company said.

“The company is committed to following the legislative processes to ensure that all affected employees are treated fairly.”

Ongoing lockdowns in China hit Ellies’ satellite installations business as the disruption of global supply chains led to a shortage of microchips worldwide, affecting the group’s production of decoders.

Ellies had struggled to maintain profitability in recent years and lost money in its manufacturing business, but was now betting on solar power equipment and generator sales to turn its fortunes around as load-shedding had led to growth in demand for inverter and solar products, it said.

The R137m company — which generates the bulk of its revenue in SA, followed by Namibia (3.05%), Botswana (1.75%) and Eswatini (less than 1%) — now wants to diversify revenue streams away from MultiChoice.