South Africa’s CA Sales Holdings offers positive growth

CA Sales Holdings (CA&S) has increased its dividend by 30.4% to 15.35 cents per share in its first year as a listed company and is well positioned to continue producing strong results in the coming year, CEO Duncan Lewis said yesterday.

The retail group has a strong balance sheet and a diverse portfolio and geographic presence, he said at the end of the financial year to December 31, where headline earnings per share increased well by 31.2% to 78.2 cents per share.

CA&S’s dual listing on the JSE and Botswana Stock Exchange in June 2022 raised its visibility among South African traders and institutional investors and increased the stock’s market capitalization, he said.

The share price rose 3.42% to R7.25 yesterday afternoon, close to the list price of R7.54 and between the high R17.50 price and the low of R5.05 that the share has traded at in 12 months.

Revenue was up 18.2% to R9.5 billion, while gross profit increased 24.9% to R1.4 billion – overheads had increased by 19.4% over the prior year due to inflation, and in particular increases in fuel and energy prices across all the regions.

Lewis said the positive results were due to better business conditions and increased sales, as well as new customer acquisitions.

The improved trading environment compared to the prior year’s Covid-19 restrictions and managed cost increases contributed to a 32.4% increase in operating profit to R531.1 million. Strong cash flows saw net cash resources rise to R451.1m from R344.1m.

During the year, the group acquired an additional sales and in-store execution business, effective sales and merchandising, based in South Africa, as part of a channel broadening strategy.

CA&S’s expansion strategy saw it lift its stake in Smithshine Enterprises in Botswana and increase its shareholding to 100% in Promexs in Zambia and Logico Unlimited in Eswatini.

On January 2, 2023, post financial year end, a Namibian group of companies, including its properties, known as the T&C Group, was acquired.

“The geopolitical uncertainty due to the conflict in Ukraine continues to adversely impact global economic conditions with resultant rising fuel, energy and other commodity prices, and scarcity of certain raw materials. The challenging environment and rising inflation is expected to continue across the globe and into the foreseeable future. The energy crisis facing South Africa, with various stages of load-shedding, will continue to disrupt businesses and households alike,” he said.

The group’s services and solutions for brand owners, for new and existing clients, would continue to be expanded. Channel broadening of existing channels would be a focus.

“Where feasible, the group will also grow its client and customer networks and make value-adding acquisitions,” said Lewis in a statement.

CA&S provides go-to-market services to leading international and regional brand owners. The group partners with its customers to take brands across borders, and helps move them through the supply chain and into stores, on shelves and into baskets and trollies.

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