S&V Weekly Newsletter Vol.8 No.24, June 13 2022

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SARS wins case against 'aggressive litigation' by under-invoicing importers - but has to go all the way to Supreme Court

Pretoria, Gauteng, SA (10 June 2022) – In the Supreme Court of Appeal (SCA), the South African Revenue Service (SARS) last week won a case brought against it by a group of importers who had under-invoiced and mislabelled apparel, but who had accused SARS of “procedural unfairness, irrationality and unreasonableness” in seizing their 19 containers - and who had earlier won their case in the Gauteng Division of the High Court.
      SARS took the case to the SCA on appeal.
      The appellants in the SCA trial were SARS, the Minister for Trade, Industry & Competition, the SA Apparel Association, the Apparel & Textile Association of SA, and SACTWU, and the respondents were clearing agent Dragon Freight and 6 importers. The containers were detained between 04 November and 20 December 2019.
      In its summary, the SCA said SARS' decision to seize the containers had been "lawful, reasonable and procedurally fair".
      The containers were seized after they were flagged by SARS' customs electronic system because the declared value was lower than SARS reference pricing for the declared items.
      In a press release, SARS said it was "firmly committed to service excellence and this includes not being deterred by aggressive litigation that undermines the fiscal and economic fabric of the country".
      "SARS is dedicated to its mandate to combat tax evasion and affirms its warning to non-compliant traders and clearing agents to desist from the practice of false declarations in attempts to defraud the state of what is due to the fiscus.
      "The impact of illicit activities on imports includes under-invoicing resulting in lower revenue to the fiscus given that not all customs duties and value added tax (VAT) due to the government are paid, and trade mis-invoicing involving.
      "SARS Commissioner Edward Kieswetter expressed his satisfaction with this important decision. He said, 'There are concerted attempts by those engaged in these illicit activities to circumvent the support put in place by government for local industries thereby eroding productive capacity in the country with accompanying job losses, particularly in the local manufacturing sector. This limits the country’s potential to grow and create jobs, and leads to unfair competition for legitimate trade.'
      The Commissioner thanked the Department of Trade, Industry and Competition, the textile and clothing industry and the Trade Union in the sector for their valuable contribution in this success.
      To read the judgement, click here

TFG final results

'Our best results yet!', says Thunström

Cape Town, W. Cape, SA (Fri 10 Jun 2022, 9:03) – Following the release via SENS of its full year 2022 (FY22) results on Friday, TFG CEO Anthony Thunström sent a media email in which he said TFG had achieved its best-ever results, which included a turnover of R43 billion.
      "We gained market share across all territories...as we outpaced retail competitors...achieving 27% growth in mens- and ladieswear in South Africa against average growth for the segment of 5.9%, 57.3% versus 12.7% in the UK, and 24% for TFG Australia versus the market average of 12.2% growth.
      "We opened 274 new stores in South Africa, completed 96 relocations and enlargements, rebuilt or restored 176 looted stores, as well as opened 41 new stores in Australia and 8 new stores in London. That's 2.4 stores per day over the past year."
      He said a "new integrated omni-channel platform" would be launched soon.
      "We have created over 7 000 jobs and workplace opportunities, shifted R2 billion more business to black-owned suppliers, set environmental commitments for cotton, wood and washcare labels and signed up to the Better Cotton initiative to source cotton more sustainably.
      "We have also become the only major retailer to achieve a Level 3 B-BBEE score, up from a Level 6 in the previous year. This is a measure of our ability to create value for our customers, shareholders, employees and the communities we operate in as we grow TFG together."

Extracts from the SENS report: Revenue for the year increased to R46.2 billion (2021: R35.6 billion) and gross profit went up to R21 billion (2021: R15 billion). Operating profit before acquisition costs, gain on bargain purchase and impairment of goodwill and brands leaped 215% to R4.9 billion (2021: R1.5 billion). Profit attributable to equity holders recovered to R2.9 billion (2021: loss of R1.9 billion). Furthermore, headline earnings per share jumped 409.9% to 1 009 cents per share (2021: 197.9 cents per share).

Company outlook Macroeconomic conditions in all territories in which we operate are likely to remain constrained. Current shipping disruptions will most likely continue for most of the 2022 calendar year and global inflationary pressures and the rising interest rate environment are both expected to persist.
      The Group will however continue to invest in its key strategic initiatives to further strengthen its differentiated business model, which has proven to be resilient and has delivered superior growth in all its operating territories. Further, the Group made progress on the implementation of its key strategic objectives and its speciality brand business portfolio. The Group remains very well positioned for further organic and inorganic growth, supported by a strong Group balance sheet.
      Operationally, there will be a continued focus on further improving gross profit margins, expense control, working capital management and disciplined capital allocation.

Mr Price final results

Turnover up 23%

Durban, KZN, SA (Thu 9 Jun 2022, 7:27) – Revenue from continuing operations for the 52 weeks ended 02 April 2022 jumped 23% to R28.1 billion (2021: 22.8 billion) and profit from operating activities shot up 28% to R4.9 billion (2021: R3.9 billion). Profit attributable to equity holders of parent grew 26.4% to R3.3 billion (2021: R2.6 billion). In addition, headline earnings per share from continuing operations went up 19.8% to 1 282.1 cents per share (2021: 1 070.3 cents per share).

Group prospects: The way forward is likely to be characterised by ongoing volatility. Global supply chain challenges, rising inflation and interest rate hikes are expected to continue, placing pressure on forecasting efforts and the cost of doing business. These knock-on effects will be felt domestically, amidst other previously communicated local challenges, exerting pressure on businesses and households. A constrained consumer environment is anticipated to persist for most of 2022 as post year end trade has reflected.
      The group will continue to strive for its operating model to be supportive of its value roots and it aims to minimise as far as possible, the impact of rising input costs on its customers and operations. Adequate cover has been taken to protect the group against elevated exchange rate, freight rate and other key cost pressures. To ensure price leadership it has invested in key defensive departments and is holding certain price points while striving to preserve overall margins. High single digit input inflation is expected in H1 FY2023.
      The group’s extensive experience and track record in its primary market South Africa, has shown that despite the challenges outlined above, opportunity exists for organisations who embrace uncertainty and pursue growth. The group’s vision is clear, and it is focused on executing its strategic plans which include exciting organic and inorganic prospects. The group’s business model is well positioned to navigate an adverse economic climate. It will continue to differentiate itself by delivering its brand promise through fashion and value at Everyday Low Prices. This gives it the advantage of attracting customers trading down from higher price points as well as aspirational value shoppers, supported by its convenient omnichannel store footprint.

They Said It

"Often the addresses that we're asked to send goods to are 'near the baobab on the main street', and the Post Office gets it there. A lot of addresses in Africa are like that, and it works." - PPE supplier, Gaborone, Botswana.

Got anything you'd like to share?

Do you have any suggestions, comments or experiences about the industry that you'd like to share with the industry? - tony@svmag.co.za

13/06/1943: Peter Book, retired, formerly Woodheads, Cape Town, W. Cape, SA.
13/06/1950: Maria Caldeira, Solemates, East Rand, Gauteng, SA.
13/06/1966: Benedict Plaatjies, Leather from Hart, Pietermaritzburg, KZN, SA.
13/06/1974: Stuart Worrall, Elan-Polo, Cape Town, W. Cape, SA.
14/06/1952: Terry Holton, ACA Threads, Gauteng, SA.
14/06/1969: Alison Piccione, KMP Footwear, Pinetown, KZN, SA.
14/06/1963: Niekie Vermaak, KKI Leather Marketing, Oudtshoorn, W. Cape, SA.
14/06/1965: Beverley Riley, Brits Leather Products, Brits, NW Province, SA.
14/06/1965: Allan Kisten, Spunlok, Pinetown, KZN, SA.
15/06/1945: James Cragg, agent, East London, E. Cape, SA.
16/06/1945: Yusuf Kadwa, May’s Shoes, Durban, KZN, SA.
16/06/1963: Deepak Dayal, Deluxe Footwear, Durban, KZN, SA.
16/06/1965: Tersia Wessels, retired, formerly Crocs SA, Somerset West, W. Cape, SA.
16/06/1973: Sue Meehan, left the industry, formerly Saddler Belt and Mantella Q Leather, Durban, KZN, SA.
16/06/1985: Chris Stottelaar, Leather Systems, Port Elizabeth, E. Cape, SA.
16/06/1960: Jaywant Irkhede, the DTIC, Pretoria, Gauteng, SA.
17/06/1972: Odelle Hadnum, Chillisource, Durban, KZN, SA.
17/06/1973: Alfredo de Oliveira, Fashion Fever, Welkom, Free State, SA.
18/06/1933: Erich Debus, retired, formerly Richleigh Shoes [closed], Pietermaritzburg, KZN, SA.
19/06/1979: Sumen Naicker, Fusion Footwear, Springs, Gauteng, SA.
19/06/1969: Monica Frank, Labora Shoes, Durban, KZN, SA.

16/06/1945: Yusuf Kadwa, retired, former owner of May's Shoes, Durban, KZN, SA.
17/06/1994: Roy Inggs (b. 18/06/1932), Inggs Shoe Stores [closed], Roodepoort/Florida, Gauteng, SA.
17/06/2021: Cornelius 'Con' Barnard (b. 01/02/1934), Stanhope Boot & Shoe, Pinetown, KZN, SA.
19/06/2021: Hennie du Plessis (b. 06/01/1942), Strassberger Shoes, Clanwilliam, W. Cape, SA.

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.

Directory entries updated last week

NDSS Trading, Durban, KZN, SA.
The Pro Shop, Sandton, Gauteng, SA.

3. Malawian Kwacha (MWK)

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4. Zambian Kwacha (ZMW)

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5. Zimbabwean Dollar (ZWL$)

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ABSA Agri Trends: Hides & skins prices

Johannesburg, Gauteng, SA (09 June 2022) - The current average hide price remained unchanged at  R4.14/kg from a week ago. The current price is 0.6% lower than the average price a month ago and is 50% lower than the average price a year ago. The range of prices reported was as follows: Minimum price: R4.00 Maximum price: R5.00. Please note: Our methodology weighs the prices we collect according to the number of hides they sell in a month. This is done to make it more representative of the prevailing market price. NB* Hide prices are determined by the average of the RMAA (Red Meat Abattoir Association) and independent companies. - Marlene Louw, senior agricultural economist, and Nkhensani Mashimbyi, agricultural economist, Absa group.

Note: For previous prices, see HERE

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:
Hinterland, Klerksdorp, N.W. Province, SA. Retail co-op.
His & Hers, Bujumbura, Burundi. Men's and women's boutique.

Contact us

News & Classifieds: Tony Dickson, +27 (0)31 209 7505, tony@svmag.co.za

Next newsletter: June 20, 2022.

SAFLIA enquiries: Tel 0800SAFLIA * Email info@saflia.co.za * Website http://www.saflia.co.za

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