Ellies Holdings said a headline loss per share (HLPS) of between 4.17 cents and 4.99 cents was expected for the six months to October, 31 compared with 4.36 cents in the same period in 2021, as it shoulders restructuring costs.
The manufacturer, importer, wholesaler and distributor of LED lighting, electrical and electronic products and solar solutions to the residential and commercial sectors, said in a trading statement yesterday it expected a loss per share (LPS) of between 3.95 cents and 4.73c compared with the 3.06c for the same period in 2021. Ellies’ share price slipped a cent to 15c yesterday afternoon on the JSE.
“The trading environment continues to be constrained with consumers under pressure with rising costs as a consequence of the global inflationary environment, and increasing cost of fuel. The trading results have seen an improvement, however, with revenue up 5.6% compared to the six months ended October 31, 2021 while gross profit has also marginally improved,” the group’s directors said.
Operating costs, excluding retrenchment costs were contained to well below the Consumer Price Index (CPI).
A turnaround strategy was being implemented and components of the plan were expected to be completed before their financial year-end on April 30, 2023.
“It is anticipated that the group will begin benefiting from the savings in the latter part of the financial year,” Ellies’ directors said.
The turnaround was not only about savings, but also to position Ellies as a smart infrastructure business with solutions for alternative energy, water storage and harvesting, connectivity and smart home technology.
“The restructure has had an impact of R18 million in respect of retrenchment costs and amounts to 2.24 cents per share of LPS and HLPS in the period,” the group’s directors said.
An agreement was being finalised with bankers to restructure working capital facilities to help alleviate constraints on working capital that were communicated in the latest annual report.
Negotiations with as-yet unnamed parties were also under way to support the business in the areas where the group was seeing substantial growth in demand for its products and services.
Ellies expects the combination of these initiatives, if successful to lead to substantial synergies and growth in the group’s performance.
BUSINESS REPORT