SEARDEL REVENUE FLAT, BUT 'GOOD PROGRESS' MADE

SEARDEL Investment Corporation, which owns clothing companies and consumer electronics wholesalers, made “good progress” in the six months ended September even though revenue fell slightly to R1.2bn over the same time last year, the company said on Monday.

The company has been recovering since it made operational losses in the 2008 and 2009 financial years.

CEO Stuart Queen said on Monday that while interim headline earnings were flat at 0.1c per share compared with the same period last year, there were factors that indicated the group would be in a good position in future with some “help from the market and the economy”.

One factor was that government incentives were R7m below that recognised in the same period last year, which Mr Queen said was only a “timing issue”. The numbers last year included one-off income of R14m relating to property rates refunds.

Another factor was that net interest costs were R7m more than in the prior period due to increased debt from property development, ahead of the full benefit of increased rentals.

The textile sector of the business was disappointing after reporting a R7.4m operating loss compared with a R21.1m operating profit in the same period last year. The main reason for this was a 9% reduction in revenue to R332m, which was ascribed to softer market conditions.

Mr Queen said it had been a “tough half for the manufacturing sector generally”, but work was done to reduce the break-even point of the textile operations. Revenue in the clothing segment fell 20% to R361m in line with downsized operations, which allowed fixed overhead costs to be reduced. As a result, the losses of this segment reduced significantly to R9.6m from R33.9m.

Revenue in Seardel’s branded product distribution segment rose 33% to R342m — a factor was that revenue from Microsoft Xbox distribution was not included in the same period last year. The segment reported a R2.9m interim operating profit versus an R800,000 loss last year.

Revenue from properties increased 55% to R46m with rentals from external tenants comprising 48% of the total. Operating profit from properties was up 5% to R33.2m.

The Mobeni Industrial Park is expected to be completed by mid-2013 and nearly all the property available to external tenants has been let.

Source: BDLive – Edward West