S&V Weekly Newsletter Vol.5 No.30, July 29, 2019

This Newsletter is sponsored by SAFLIA

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Retail last week

Comment from 5 retailers on Saturday
"It's been very quiet. Ladybrand as a whole is very quiet since the South African border post has been forcing Lesotho residents - who are the majority of the shoppers here - to queue for several hours every time they want to enter SA. Previously, they got a 6 month stamp in their passports. Footwear isn't a big part of our business, but we're having to look for cheaper merchandise." - Teresa Stockdale, partner, Euro Clothing, Ladybrand, Free State, SA. Independent, family outfitter.

"It's been steady. The last few months have seen an improvement, and now it's stable. We've been in business for about 45 years, selling exclusive, top end imported merchandise, and we never see a big dip - nor a big rise, unfortunately." - Paul Abrosie, director, The Executive, Johannesburg, Gauteng, SA. Independent, 1 store, men's outfitter.

"It's been very bad. We do mostly school wear, which is very seasonal. It's been a warm winter, and the sales of tracksuits and jerseys have been slow. School wear has been good for us over the years, and hopefully it will pick up again from November." - Raj Sukai, proprietor, Fair Price Store/Workwell Tailors, Port Shepstone, KZN, SA. Independent, 1 store, school wear and tailoring, including manufacturing of school uniforms.

"It's been quiet, but the rest of the month hasn't been so bad." - Famida Mohamed, partner, Fame, Matubatuba, KZN, SA. Independent, 1 store, men's outfitter.

"This week has been quiet, but the rest of the month hasn't been so bad, and overall we're doing well and can't complain. The Johannesburg Municipality has put up its lights and water rates, which I think has affected consumers. We import around 85% of our footwear now, which is sad. I'd rather it was the other way round, but we can't get the finish we want from most local factories. I don't think South Africa has the skills anymore." - Mohammed Bulbulia, member, Family Shoe Centre, Johannesburg, Gauteng, SA. Independent, 1 store, family footwear, mostly more expensive. 3rd generation owners of this store, founded in 1921.

Green Cross hurts AVI results

Johannesburg, Gauteng, SA (July 24 2019) – In a release via the Stock Exchange News Service (SENS), AVI Limited issued a voluntary trading update and statement for the year ended 30 June 2019

       Comparisons to prior year results in the commentary are made on a like-for-like basis, before taking reclassifications in terms of the new revenue and lease accounting standards, which were adopted with effect from 1 July 2018, into account.
       Group revenue was 1,2% higher than the prior year. The trading environment was difficult throughout the financial year with weak consumer spending limiting sales volumes in many of our categories, exacerbated in some categories by competitor discounting which we were unwilling to match. Selling prices were increased in categories where specific cost pressures arose but, in general, selling prices were maintained through the year. December's sales volumes were lower than last year including in Spitz which was unable to match the prior December's record sales volumes.
       Gross profit margins were well protected reflecting generally low raw material cost inflation and benefiting from selling price increases where necessary. Lower sales volumes resulted in pressure on operating profit despite ongoing efforts to reduce selling and administrative costs across all business units.
       Operating profit for the full year was lower than last year. Both creamer and biscuits achieved strong year on year profit growth in the second semester and this, supported by an improved result from I&J partially ameliorated the first semester's decline in operating profit.
       Group operating profit was impacted by restructuring costs at Green Cross (R27m) and an unrealised mark-to-market loss on I&J's fuel hedges of R13,4 million compared to an unrealised gain of R15,6 million in the prior year.        Finance costs were higher than last year in line with higher debt levels.
       The impact of the new revenue and lease accounting standards, adopted with effect from 1 July 2018, on headline earnings for the year was negligible.
       A total impairment of R87,0 million after tax has been made against Green Cross' property, plant and equipment and trademark values to recognise expected realisable values following the restructuring completed in the second semester, as well as the period it will take to return the business to acceptable levels of profitability. The impairment will be recorded as a non-cash capital item.
       The weighted average number of shares in issue during the year was 0,5% higher than last year due to the issue of new shares in terms of the Group's various share incentive schemes, including the black staff empowerment share scheme.
       The following disclosure is made in accordance with Section 3.4 (b) of the Listings Requirements of the JSE Limited:
- Consolidated headline earnings per share for the year ended 30 June 2019 are expected to decrease by between 4% and 6% over the prior year, translating into a decrease from last year's 543,1 cents to a range of between 511 and 521 cents per share; and
- Consolidated earnings per share for the year ended 30 June 2019, including capital gains and losses, are expected to decrease by between 4% and 6% over the prior year, translating into a decrease from last year's 513,1 cents to a range of between 482 and 493 cents per share.
       It is expected that AVI will release its results for the year ended 30 June 2019 on or about 9 September 2019.
       The information above has not been reviewed and reported on by the Group's auditors.

Headlines

Pietermaritzburg, KZN, SA – Morné Gerber joined Leather From Hart from The Little Slipper Company in Port Elizabeth as SHEQ manager on April 1.

Durban, KZN, SA – Ashley Pillay, PA to the General Secretary of the National Bargaining Council of the Leather Industry, turns 54 today, and this year marks 30 years service with the NBC.

They Said It

"Even if you just have glass of red, it's just not worth the risk to drive. Unless you want to meet strange men in a small confined space …. Gives new meaning to Pressing and Fusing …… sorry but I am trying to humour myself while my partner spends all the money." - Sew Solutions member Rajesh Raghunandan on a function they will hold to mark the opening of their new premises in Pinetown.

"I had never even heard of this store, but I checked with my wife and daughter, and they say it has closed down. You have to ask the women about clothing shops...unless of course you ask someone like Granville." - ISTT head and Grahamstown resident Dr Clive Jackson-Moss, who I asked to check the fate of Grahamstown retailer Elixir. 'Granville' refers to DyStar leather technician Granville Steyn, famed throughout the southern African leather industry for his dress sense.

"Yes, I do leather handbags, combining leather and canvas for 'man bags' and leather logos on caps. My main income is architecture (last 20+ years), but I want to start focusing on some fabrication such as shoes or wherever God leads me next." - Crafter Henri Nel.

S&V Directory - Order now

The directory is ready. On sale for R450. The online version is also available at R450 for 12 months' access.

2019 Trade Fairs Another essential service from S&V

Please note that we have put a list of the 2019 trade fairs and conferences on our website, linked to their websites: http://www.svmag.co.za/events

Exchange rates

Source: http://www.x-rates.com/calculator/

ABSA Agri Trends 23/07: Hides & skins prices

Hides: R1.71/kg. NB* Hide prices are determined by the average of the RMAA (Red Meat Abattoir Association) and independent companies.

29/07/1965: Ashley Pillay, National Bargaining Council, Durban.
29/07/1972: Shona Kelland, Chillisource, Durban.
30/07/1959: Alan Munsamy, Nulaw, Durban.
30/07/1949: Gerald Batt, last with Uber Gruvi (closed), Cape Town.
30/07/1973: Marco di Lembo, Villani Shoes, Johannesburg.
30/07/1973: Frankie Sequeira, Novel’s Outfitters & Shoe Store, De Aar.
31/07/1940: David Berry, retired, formerly Rockshoes [closed], Pinetown.
31/07/1969: Mark Dicks, emigrated, formerly Prime Leathers, Pinetown.
01/08/1935: Bev Jack, retired, formerly Bata Zimbabwe and LAIFEZ, Harare.
02/08/19??: Brian Haarburger, Paris Belts, Johannesburg.
02/08/1946: Burt Coburn, ?, Cape Town.
02/08/1971: JJ du Plessis, Strassbergers, Clanwilliam.
02/08/1991: Samantha du Plessis, Chillisource, Durban.
03/08/1941: Rolf Haesloop, retired, formerly Haesloop Agencies, Pinetown.
03/08/1972: Fazel Allie, Arma Trading, Botswana.
03/08/1928: Gerry Elder, retired, Cape Town.

In Memoriam this week

29/07/1993: JA "Pat" O'Brien, agent.
29/07/2003: Dennis South, (b. 26/12/1923), Cuthberts, Johannesburg.
29/07/2010: Eric Harvey (b. 09/02/1925), Barker Footwear, Cape Town.
03/08/1999: Otto Guldimann (b. 2/10/1922), Cellini [closed], Cape Town.
03/08/1992: Malcolm Kueghn, Hi-Tec Sports, Johannesburg.
03/08/2007: Noel Amery (b. 05/09/1944), Clarens Leather [closed], Clarens.
04/08/2006: Peter Gibbings (b. 31/01/1922), Apeco, Port Elizabeth.

Have you let us know about your birthday, or the birthdays of your colleagues? Our readers love this section, so please become part of it. This also applies to the In Memoriam section. Help us remember former colleagues.

Have a look at these links

We invite businesses to send us links to websites, Facebook pages and the like which they feel would be of interest to others. The links below are from our database:
BASF SA, supplier of PU and TPU polymer, Midrand, Gauteng, SA: https://www.basf.com/za/en.html
Basson Skoene, retailer, Wellington, W Cape, SA: http://bassonskoene.co.za/

Classified Adverts

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