Company Data
| Last traded |
R2.75 |
| Change |
R-0.05 |
| % Change |
-1.79% |
| Cumulative volume |
20,989 |
| Market cap |
R583.52m |
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Johannesburg - Despite consumers keeping a close watch on their wallets, Amalgamated Appliances [JSE:AMA] (Amap) reported stellar results on Monday as the group's aggressive restructuring began to bear fruit.
The appliance manufacturer and distributor is responsible for brands such as Russell Hobbs, Sansui and George Foreman in South Africa.
Amap reported a 148% increase in diluted headline earnings per share to 11.7c for the six months to end-December 2009. Despite a 35% drop in gross revenue, the group's profits are back in the black for the first time in two years.
According to CEO Alan Coward, the increase in earnings is thanks to the group's restructuring and cost-cutting.
Amap's electronics business was revamped into a royalty-based business model. "We work with retailers to source products [of the Sansui and Tedelex brands] and they pay us royalties to use the brand," said Coward.
Retrenchment threat
Coward said the business model allowed for a smaller staff requirements and a drop in inventory levels.
Inventories decreased by R110.6m to R132.2m.
According to Coward, the company's cost-cutting will result in a further 140 retrenchments if no buyer can be found for its Atlantis factory.
"[The factory] needs support from a major international player... [if not] the result will be that we will decide to sell the factory by the end of June," said Coward.
Retail figures from Statistics SA attest to Amap's tough trading environment.
According to Stats SA, total retail sales for household furniture, appliances and equipment in 2009 were down by 5.8%.
The company is looking to sub-Saharan Africa and the Indian Ocean islands for future growth. Amap is already operating in countries like Mozambique, Angola and Mauritius. "We are very excited about these export opportunities," said Coward.
- Fin24.com