- May 24, 2013
- Posted by: admin
- Category: Clothing and Textiles
SEARDEL’s share price has shot up 68% since last Friday’s announcement that HCI was exchanging its 64% stake in e.tv’s holding company Sabido for shares in Seardel.
SEARDEL Investment Corporation, which last week announced it would become the parent of e.tv, yesterday reported a sharp drop in annual profit due to a R192m litigation gain the previous year.
Underlying operating performance improved during the financial year to March, the company said yesterday.
Seardel’s share price has shot up 68% since last Friday’s announcement that parent company Hosken Consolidated Investment (HCI) was exchanging its 64% stake in e.tv’s holding company Sabido for shares in Seardel. Net asset value per share increased 13c to 214c per share.
Group turnover was flat year on year, but turnover from the manufacturing entities was down 10%, while turnover from nonmanufacturing entities rose 22%.
The shift in turnover to higher margin areas and improved margins in the clothing segment drove an overall margin improvement, up 240 basis points to 21.7%.
All major cost lines came in below the previous year’s levels, directors said. The branded product segment’s turnover grew 20% to R795m. Excluding currency fluctuations, underlying operating profit was up 12% year on year. This included the new Brand-ID business, which is still at least 12 months away from a breakeven position.
Tough trading conditions in the textile division saw turnover down 4% to R689m, but excluding an impairment reversal, underlying operating profit of R9m was R19m below last year’s R28m.
Revenue in the industrial segment was down 2% to R335m, but improved gross margins saw operating profit climb 61% to R17m. Business in this segment included Gold Reef Speciality Chemicals, Brits Non-Wovens and Frame Polypropylene.
In the clothing segment turnover was down 19% to R695m, with the decline in line with expectations following a restructuring in the prior financial year.
“The reduced capacity allowed us to eliminate lower margin products, thereby raising overall gross margins,” directors said. Operating losses in clothing decreased by R67m from a prior year loss of R101m to a R34m loss. “We are considering a number of strategies to further improve the situation and we anticipate that the next financial year will remain challenging as these strategies are implemented,” they said. The directors could not be reached for further comment yesterday.
Revenue related to property increased 40% to R93m on various phases of the property development being completed and let.
Revenue from external tenants increased 93% to R47m and now represented more than 50% of the total revenue in the division. Operating profit before finance costs increased 43% to R64m.
Property developments were progressing well.
The New Germany Industrial Park had been completed and was 88% let. The Mobeni Industrial Park was on track to be completed by the middle of this year and was fully let.
Source: Business Day – Edward West