Bouyant Long4Life flexes growth muscle
INVESTMENT company Long4Life is banking on its strong cash resources of R1 billion and is eyeing possible acquisitions to add to its already impressive portfolio.
Long4Life has already acquired Sportsmans Warehouse, Outdoor Warehouse, Performance Brands from Holdsport and Sorbet, Inhle Beverages and Chill Beverages after it listed on the JSE in April last year.
The group said while the existing portfolio had substantial potential, the group’s cash resources, strong balance sheet and the gearing optionality derived from cash generating businesses provide a basis for further acquisitions.
“These are continually being assessed and anticipated to lead to the addition of exciting new opportunities,” the group said.
After the reporting period, the group, through a 59 percent stake in newly established Long4Life Health, acquired 61 percent of the ClaytonCare Group (Clayton) resulting in an effective 36 percent economic interest.
“The acquisition is a strategic initiative and creates a platform for opportunities for Long4Life to enter into the high growth wellness space,” the group said.
Long4Life yesterday reported its half-year results for the six months to end August, and said all the acquired business contributed to the results, with performance in line with expectations.
The group reported revenue of R1.53bn and a trading profit of R177.6 million during the period.
Headline earnings were R145.7m while net finance income totalled R40.3m with cash and cash equivalents of R1.05bn on hand at period end.
The group did not declare a dividend during the period. “No interim dividend has been declared as the board has decided that until such time as the group is fully invested, it will continue paying dividends on an annual basis,” it said.
The group’s sport and recreation division contributed 60 percent of its revenue and 64 percent of the trading profit. The division includes Sportsmans Warehouse, Outdoor Warehouse and Performance Brands.
“The division demonstrated a resilient trading performance notwithstanding continued macro-economic headwinds and low consumer confidence. In the aggregate, sales were 6.3 percent higher than the corresponding period, with the retail price inflation dropping to 0.6 percent compared to 6.6 percent last year,” the group said.
On a like-for-like basis, retail revenue was flat, while the wholesale operation Performance Brands, which owns and distributes products under the First Ascent, Cape Storm, Second Skins and African Nature brands, increased external sales by 6.2 percent.
The Beverages division, which includes Chill Beverages and Inhle Beverages, grew its case volumes by 24 percent and revenue was up by 21 percent.
Long4Life’s JSE counter closed 1 percent lower yesterday at R4.30.