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Market cheers Long4Life's interim profit

October 22, 2020

DURBAN – Long4Life’s share price leapt more than 13 percent on the JSE on Wednesday as the market cheered the group's delivery of an interim profit, albeit down 75.54 percent, following significant disruptions to all of its businesses in its portfolio as a result of Covid-19.

The share closed the day 13.05 percent up at R2.94.

Long4Life, the listed investment firm launched by BidVest founder Brian Joffe, holds a portfolio of assets in the leisure and lifestyle sectors structured into three operating divisions: Sport and Recreation, Beverages, and Personal Care and Wellness, with businesses such as Sportsmans Warehouse, Chill Beverages and Sorbet.

Chief executive Brian Joffe said while the financial performance in the past six months had been constrained, it was pleasing that most of their businesses have emerged from the pandemic relatively unscathed, and more resilient in many respects.

“Comparisons of our financial performance these past six months against the prior period is not meaningful. What is more defining is where we are today – quality businesses, quality people – aligned with a vision for the future,” Joffe said.

The group reported that its trading profit lowered to R49.1 million for the six months to end August, down from R200.7m compared to last year.

The first half of the 2021 financial year had been difficult and unpredictable following the significant disruption on all group businesses as a result of the Covid-19 pandemic, it said.

Revenue declined by 22.69 percent to R1.42 billion and operating expenses declined by 15 percent.

Its basic earnings per share and headline earnings per share fell by 94.48 percent to 0.8 cents a share, down from 14.5c compared to a year earlier.

Cash generated by operations increased by 13.44 percent to R246.5m and the group reported a cash balance of R821m at the end of the period.

Joffe said they were pleased with the measures taken during this extraordinary time by the various management teams across the group.

“We are continuously trying to determine and anticipate what the ‘new normal’ will be post the Covid-19 crisis and to adapt our business activities accordingly,” he said.

In the Sport and Recreation division of Sports Retail, Outdoor Warehouse and Performance Brands, the group reported R826.9m in revenue and a trading profit of R94.8m.

The Beverages division, comprising Inhle Beverages and Chill Beverages, reported a decline in revenue to R500.8m and a trading loss of R5.3m.

While the Long4Life operations traded throughout lockdown, it was at significantly reduced volumes due to the suspension of alcohol sales as well as very limited on-consumption sales.

The Personal Care and Wellness division reported revenue of R93.3m and a trading loss of R22m. The division consists of both the beauty and grooming businesses, Sorbet, Lime Light and ClaytonCare.

Looking ahead, the group said while the future was uncertain, it remained cautious that the effects of Covid-19 would constrain the economy for some time. However, there had been a marked improvement in trading across its businesses since the recent easing of the lockdown.

iol