Long4Life trims sails, toys with delisting, for anticipated growth
LONG4LIFE, the investment group started by Brian Joffe, said yesterday it had decided not to declare an annual dividend for the year to the end of February, in light of the Covid-19 disruption as it repositions and bolsters the company to take advantage of the more stable markets and economy in the future.
Last month, Long4Life announced it was undertaking a review of its corporate structure and strategic focus, in order to maximise shareholder value over the medium term, with a possible delisting from the JSE or the unbundling of certain focused assets.
The national lockdown in South Africa had knocked its business. Its earnings per share and its headline earnings per share decreased by 26 percent to 31.9 cents for the period, and revenue was down 12 percent to R3.58 billion in the reporting period.
“Trade in the three group divisions – sport and recreation, beverages,
and Personal Care and Wellness – was severely restricted for the majority of the first half of the financial year,” said the group.
Long4Life owns firms such as Sportsman’s Warehouse, Chill Beverages, Inhle Beverages, Sorbet, Lime Light and ClaytonCare.
Sport and recreation revenue slid 10 percent to R2.1bn, while beverages revenue fell 13 percent to R1.3bn, hit by various national booze bans.
Personal care and wellness revenue tumbled 27 percent to R226 million, which Long4Life attributed mainly due to Sorbet, which had 11 store closures in the period, with the total number of stores at the financial year end at 209. However, its cash flow from operating activities improved by 15 percent to R674m.
Joffe, the chief executive of Long4Life, said: “Over the past year, the group’s management has focused on containing costs and asset management while improving and expanding online sales platforms and efficiencies.
This has ensured that our businesses are strongly positioned to take advantage of more stable markets and economic activity, which lies ahead.”
Long4Life said it had recovered in the second six months of the financial year, with revenue for the six months to the end of February 2021 amounting to R2.162bn against R2.254bn in the comparable prior period.
Overall, the group said it had emerged relatively unscathed, and in certain respects more resilient and with more efficient employment of funds in its businesses.
During the year, the group acquired Direct Leisure Golf Distributors as a bolt-on acquisition in the sport and recreation division, as part of the group’s strategic expansion plans in lifestyle sectors.
Joffe said suitable acquisitions for the firm were limited.
He also said investor sentiment towards South Africa was the lowest in many years, with declines in the rating of domestic-facing JSE-listed securities.
Looking ahead, Long4Life said although it had anticipated that the possibility of disrupted operations and reduced consumer demand would persist for some time, there had been a strong rebound in the markets in which the group operated.
“Consumer trends are aligned to the group’s product and service offerings – sport, recreation, health, wellness, beauty and outdoor activity – and are more relevant and popular in a post-pandemic environment.
This bodes well for the group going forward,” it said. Long4Life shares closed 4.54 percent higher at R4.61 on the JSE yesterday.