S&V Weekly Newsletter Vol.6 No.25, June 22, 2020
This Newsletter is sponsored by SAFLIA
Please note: Click on any ad to go to the advertiser’s website
Restarting manufacturing: Retrenchments
Bolton: Still negotiating
In response to a query about retrenchments at Bolton Footwear's Cape Town factory, MD Alan Fleetwood responded as follows:
Cape Town, W Cape, SA – All we can confirm is that we gave notice to our employees of S189 procedures that are to be followed. This entails consultation with them about retrenchments.
Whereas some individuals have already left as a consequence, the process is not yet complete and I cannot be more specific.
Virtually all departments of the business are affected. That includes the administration of imports; accounting; design; production; IT; supply chain; etc.
It is a consequence of the re-shaping required to remain relevant in what we see the shape of the post-Covid business environment as being.
As things stand, our brands and sales strategies are not affected.
Edcon: Still no word on suitors
Lance Schapiro of Matuson Associates, the business rescue practitioners working with Edcon, responded to queries from S&V. Please note that a list of the trade creditors will be published in S&V Footwear & Leather Goods this week.
1. Any available information on the identity of the entities who are interested in acquiring parts of Edcon.
Unfortunately at this stage we are unable to share those details with you. As you would understand this is a competitive process and therefore we cannot make comment on the details at this stage due the confidentiality agreements in place.
2. Any available details on the trade creditors to the group - their identities and the amounts they are owed.
Trade creditors are included in the business rescue plan.
Stock Exchange News Service (SENS)
TFG: Final results March 2020
Cape Town, W Cape, SA (June 18, 2020) – Revenue for the year increased to R38.477 billion (2019: R37.128 billion), gross profit rose to R18.623 billion (2019: R18.281 billion), profit for the year attributable to equity holders of TFG lowered to R2.444 billion (2019: R2.640 billion), while headline earnings per share decreased to 1 174.4 cents per share (2019: 1 187.9 cents per share).
Final ordinary dividend announcement: In light of the current subdued economic environment and the heightened levels of uncertainty posed by COVID-19, the Supervisory Board has decided that it would be prudent not to declare a final dividend at this year-end (March 2019: 450 cents per share). Dividends will be resumed when appropriate to do so.
Preference dividend announcement: Dividend number 167 of 3.25% (6.5 cents per share) (gross) in respect of the six months ending 30 September 2020 has been declared from income reserves, payable on Monday, 21 September 2020 to holders of 6.5% preference shares recorded in the books of the company at the close of business on Friday, 18 September 2020.
Company outlook: Whilst we continue to deal with the economic and health impact of COVID-19 on the countries within which we operate, the outlook for trading conditions continues to remain materially uncertain across all three of the Group’s business segments. Notwithstanding that all three business segments are engaged with the recovery from COVID-19, the impact of the pandemic on our 2021 financial year is expected to be significant across all territories, the extent of which is difficult to predict with accuracy. Any reintroduction of significant lockdowns and store closures across our three business segments would have a further material and negative impact on our business and results of operations in our 2021 financial year.
The Group will however continue to focus on ‘self-help’ measures and these, together with the Proposed Rights Offer, will ensure that TFG is well positioned for future growth, and to capitalise on the re-opening of the economies across all our territories.
The focus on sustainable business optimisation, digital transformation and local manufacturing will continue. We are confident that our resilient business model and strategic investments will stand us in good stead for the future.
The Supervisory Board would like to take this opportunity to thank the management teams of each of the business units for leading the Group through the pandemic and the challenging economic environment.
Notice of extraordinary general meeting: Shareholders are referred to the results presentation and circular convening an extraordinary general meeting of the shareholders to vote on the resolutions required to implement the Proposed Rights Offer published on TFG’s website. The extraordinary shareholders meeting will be held on 16 July 2020 at 08:30 and will be conducted entirely by electronic communication as detailed in the circular.
Massmart: Covid-19, sales and trading update
Johannesburg, Gauteng, SA (June 17, 2020) - Shareholders are referred to the SENS announcement issued on 18 May 2020, which provided an update of the impact of the Covid-19 national lockdown on the Massmart Group.
As previously reported, Massmart was unable to trade in the majority of general merchandise categories, home improvement and liquor products for most of the month of April, which had a significant impact on total sales during that month. Moving to level 4 lockdown from the beginning of May enabled Massmart to gradually start trading in more product categories. Most notably, our Builders stores throughout the country were able to recommence sales to the general public. However, restrictions on the sale of liquor and tobacco products remained in place throughout the month of May. Missed liquor sales for the months of April and May are estimated to be approximately R2.3 billion based on prior year sales. In line with level 3 lockdown regulations in place from 1 June 2020, Massmart is now able to trade in all product categories with the exception of tobacco and related products. Trading hours relating to liquor are however still restricted, with no liquor sales allowed from Friday to Sunday and on public holidays.
Sales update: As previously reported, for the 19-week period ended 10 May 2020, total sales decreased by 11.9% over the prior year, with comparable store sales decreasing by 12.1% over the same period. With the easing of the lockdown from level 5 to level 4, pent-up demand for home improvement products drove strong sales at our Builders stores during May, while pent-up demand for general merchandise goods supported better sales performance at Makro and Game as the month progressed. Consequently, total sales for the 23 weeks ended 7 June 2020 amounted to R34.8 billion, which is 10.3% lower than the prior year, while comparable store sales were 10.5% lower than last year. Sales from our South African stores amounted to R31.3 billion, 11.5% lower than last year, with comparable store sales decreasing by 11.5%. Total sales from our ex-South Africa stores amounted to R3.5 billion, or 1.2% higher than the prior year, with comparable store sales decreasing by 0.3%.
Estimated impact of Covid-19 lockdown regulations: The Covid-19 national lockdown has had a significant impact on the trading performance of Massmart as a Group. For the 9 week period from 30 March 2020 to 31 May 2020, total sales were R4.6 billion lower than the same period during the prior year. Operating costs attributable to the execution of safety protocols in our stores in line with regulated requirements amounted to approximately R50 million. In spite of the lockdown, the Group has not slowed down the implementation of the turnaround plan announced at our Investor Strategy Day at the end of January. If anything, it has accelerated some of the initiatives – most particularly the cost-reset project, Group restructure into a Wholesale and Retail business units and the Game turnaround plan. We will provide a comprehensive update on the progress of the turnaround plan during the interim results presentation in August.
Liquidity and cash management: The extended Covid-19 trading restrictions intensified the daily focus on liquidity and cash flow management for the Group. Massmart has continued to meet all payment obligations to suppliers and employees as we successfully navigate through the various levels of lockdown. Our focus remains on prudent cash flow management and the implementation of strategies to improve cash generation performance through previously reported key initiatives, including negotiated rental savings, mutually beneficial commercial terms with our vendors, applying for available Tax Incentive relief measures and aggressively pursuing the cost reduction initiatives already outlined in our turnaround plan. Massmart’s balance sheet remains strong and based on our various cash flow forecast scenarios, the Massmart Group has sufficient cash facilities and resources to meet its obligations. In addition to the facility support provided by local financial institutions, the Group secured a R4 billion inter-company loan from Walmart Inc. to provide additional headroom in the event of unforeseen circumstances as we navigate through the lockdown period and beyond.
Trading statement for the 26 week period ended 28 June 2020: As referred to above, the Covid-19 lockdown has had a significant impact on trading performance. While sales and margins have been lower than the same period last year, increased focus on expense management and cost savings initiatives are bearing fruit, with expense growth expected to be contained to well below inflation. Consequently, shareholders are advised that Massmart expects, as a result of the impact of the Covid- 19 lockdown, with reasonable certainty, that the loss per share and headline loss per share, will be at least 50% or 191.1 cents per share and 182.4 cents per share respectively worse than the loss per share and headline loss per share for the same period last year of 382.2 cents per share, and 364.7 cents per share respectively. Excluding the impact of the Covid-19 lockdown, we expect the loss and headline loss would have been slightly better than the same period last year. Massmart’s financial results for the 26 weeks to June 2020 will be released on the Stock Exchange News Service of the JSE Limited on 27 August 2020.
The information above has not been audited or reviewed or otherwise reported on by the Company’s external auditors.
They Said It
"For the moment, it is what it is, but it too, shall pass. There is a good footwear future for the survivors." - Bolton Footwear MD Alan Fleetwood on the current state of the industry.
"Tony, you work too hard, like I do. keeps you young and on the ball." - Retired retailer Aubrey Neimann, who's heartfelt comments on surviving liquidation will appear in S&V Footwear & Leather Goods on Wednesday.
"In this economy, you don't try to go from 0 to 100 in 3 seconds...0 to 100 in 5 minutes is fine!" - Branded distributor (and, I suspect, car enthusiast) Richard Dixon.
Got anything you'd like to share?
Do you have any suggestions, comments or experiences about the lockdown that you'd like to share with the industry? We will publish the throughout the lockdown, so please let us know. - tony@svmag.co.za
2020 Trade Fairs Another essential service from S&V
Please note that we have updated most 2020 trade fairs and conferences on our website, linked to their websites: http://www.svmag.co.za/events
Exchange rates
1. SA Rand (ZAR)
Source: http://www.x-rates.com/calculator/
|
Euro € |
GBP £ |
US $ |
CNY ¥ |
2020/01/04 |
R15.97 |
R18.71 |
R14.31 |
R2.05 |
2020/01/11 |
R15.97 |
R18.76 |
R14.36 |
R2.07 |
2020/01/18 |
R16.04 |
R14.47 |
R14.47 |
R2.10 |
2020/01/25 |
R15.87 |
R18.82 |
R14.39 |
R2.07 |
2020/02/01 |
R16.54 |
R19.81 |
R15.00 |
R2.16 |
2020/02/08 |
R16.48 |
R19.41 |
R15.06 |
R2.15 |
2020/02/17 |
R16.16 |
R19.44 |
R14.90 |
R2.13 |
2020/02/22 |
R16.27 |
R19.43 |
R15.00 |
R2.13 |
2020/02/29 |
R17.27 |
R20.08 |
R15.66 |
R2.24 |
2020/03/07 |
R17.69 |
R20.44 |
R15.67 |
R2.26 |
2020/03/14 |
R18.04 |
R19.94 |
R16.25 |
R2.32 |
2020/03/21 |
R18.92 |
R20.50 |
R17.60 |
R2.48 |
2020/03/28 |
R19.63 |
R21.93 |
R17.61 |
R2.48 |
2020/04/04 |
R20.58 |
R23.37 |
R19.03 |
R2.68 |
2020/04/11 |
R19.70 |
R22.43 |
R18.01 |
R2.56 |
2020/04/18 |
R20.43 |
R23.49 |
R18.79 |
R2.65 |
2020/04/25 |
R20.59 |
R23.53 |
R19.02 |
R2.68 |
2020/04/30 |
R20.24 |
R23.27 |
R18.51 |
R2.62 |
2020/05/09 |
R19.89 |
R22.69 |
R18.29 |
R2.58 |
2020/05/16 |
R20.11 |
R22.49 |
R18.58 |
R2.61 |
2020/05/23 |
R19.24 |
R21.47 |
R17.64 |
R2.47 |
2020/05/30 |
R19.48 |
R21.67 |
R17.54 |
R2.45 |
2020/06/06 |
R18.93 |
R21.28 |
R16.77 |
R2.37 |
2020/06/13 |
R19.19 |
R21.39 |
R17.06 |
R2.40 |
Note: For previous rates, see HERE
2. Zambian Kwacha (ZMW)
Source: https://www.xe.com/currencyconverter/
|
Euro € |
GBP £ |
US $ |
CNY ¥ |
2020/06/20 |
20.39 |
22.53 |
18.24 |
2.58 |
3. Zimbabwean Dollar (ZWL$)
Source: https://www.xe.com/currencyconverter/
|
Euro € |
GBP £ |
US $ |
CNY ¥ |
2020/06/20 |
405.54 |
446.91 |
361.90 |
51.17 |
ABSA Agri Trends: Hides & skins prices
Johannesburg, Gauteng, SA (June 19, 2020) - The current average hide price decreased by 1.3% to R0.70/kg from R0.71/kg green a week ago. The current price, however, is 8.2% lower than the average price a month ago and is 58.4% lower than the average price a year ago. Prices are extremely low across the board. There’s no local automotive manufacturing, which is driving the hide demand to non-existent levels. The local hide industry is expected to remain under pressure for the next few months. Stakeholders hope that the export market will pick up again from August/September. NB* Hide prices are determined as the average of the RMAA (Red Meat Abattoir Association) prices and prices of independent companies. - Conce Moraba, agricultural economist, Absa group.
Hide & skin price progression |
Date |
Hides/Kg |
Dorper/Skin |
Merino Skin |
2020/01/03 |
1.38 |
35.00 |
46.67 |
2020/01/10 |
1.42 |
28.69 |
45.71 |
2020/01/17 |
1.35 |
30.74 |
45.71 |
2020/01/24 |
1.39 |
33.75 |
48.14 |
2020/02/07 |
1.36 |
33.47 |
47.50 |
2020/02/14 |
1.36 |
33.75 |
47.50 |
2020/02/21 |
1.32 |
33.75 |
47.50 |
2020/02/28 |
1.29 |
37.22 |
43.89 |
2020/03/06 |
1.29 |
36.50 |
43.50 |
2020/03/13 |
1.31 |
36.00 |
43.50 |
2020/03/27 |
0.93 |
37.22 |
48.33 |
2020/04/03 |
0.92 |
37.78 |
47.36 |
2020/04/10 |
0.89 |
35.63 |
42.22 |
2020/04/17 |
0.88 |
39.38 |
41.25 |
2020/04/24 |
0.89 |
33.82 |
43.33 |
2020/05/01 |
0.82 |
34.55 |
46.88 |
2020/05/08 |
0.82 |
32.10 |
43.33 |
2020/05/18 |
0.77 |
32.10 |
43.33 |
Note: For previous prices, see HERE
22/06/1964: Collin Govender, Owen’s Press Knives, Durban. 24/06/1956: Dhirendra Bhoola, Modern Tailors/Danny's Outfitters/Hardy's/Benares, Pretoria, Gauteng, SA.
24/06/1968: Meshi Sunker, Soviet Group, Johannesburg.
24/06/1978: Ashveer Kallichurum, Shoe Component Supplies, KwaDukuza.
25/06/1976: Scott Croney, agent, East London.
25/06/1983: Sylvia Steyn, Fashion House Rules, Johannesburg.
26/06/1935: Jurgen Wedekind, retired, formerly Bellstedt, Durban.
26/06/1945: John ‘Zorb’ Caryer, retired, formerly Camdeboo Meat Processing, Graaff Reinet.
26/06/1956: Beau Rynhoud, RR Chemicals, Edenvale.
27/06/19??: Mpho Ramoshaba, the DTI, Pretoria.
28/06/1948: Joan Furner, retired, formerly Shoe Style, Johannesburg.
28/06/1957: AH Bulbulia, ?, formerly Papa Shoes/Bulhafi Shoes, Pretoria.
28/06/1975: Zane Ashraf, Foot Style, Durban.
In Memoriam this week
22/06/2010: Boris Levin (b. 03/07/1935), footwear agent, Johannesburg.
23/06/2016: Benjamin ‘Buzz’ Burke (b. 22/08/1949), Dolphin Components, Shoe Buzz, Cape Town.
23/06/2016: Billy Moodley (b. 31/08/1956), BM Components, Durban.
24/06/1995: Anand Singh, Angel Footwear Manufacturers, Durban.
25/06/2002: Gerald Haug (b. 28/01/1924), Bondseal [closed], Pinetown.
27/06/2015: Dave Bromfield (b. 19/11/1946), Apeco, Pinetown.
27/06/2019: Ebrahim 'Briggs' Mohamed (b. 29/04/1943), agent, Johannesburg.
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:
Cheftrapps, Cape Town, W Cape, SA. Safety footwear distributor.
Chemsol, Durban, KZN, SA. Adhesive manufacturer.
Classified Adverts
LUCRATIVE BUSINESS FOR SALE – DURBANVILLE – WESTERN CAPE
This business was established in 2007 and is an operational going concern. The Business has a loyal and large customer base in the WC and other provinces and offer excellent and affordable Hunting and Game skins products to the general public and commercial Wholesale/Retail trade.
Currently the only business in the Western Cape that tans hides, both commercial and game, with huge growth potential at competitive pricing.
Excellent earnings potential as business has not reached its full growth potential yet. Growth exists in expanding to larger client bases nationally and exploiting the International/export market.
We have well trained staff with more than 14 years in the industry. Email me for pictures and more detailed information if you are interested.
Enquires : Call JB SMUTS 0827383083 or E –Mail gameskinsafari@telkomsa.net
Contact us
News & Classifieds: Tony Dickson, +27 (0)31 209 7505, tony@svmag.co.za
Next newsletter: June 29, 2020.
SAFLIA enquiries: Tel 0800SAFLIA * Email info@saflia.co.za * Website http://www.saflia.co.za
Should you wish to subscribe email tony@svmag.co.za
Our website www.svmag.co.za
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