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Seardel toys with the recession

May 21 2010 11:19 Marc Hasenfuss

Company Data

Seardel Invest Corp Ltd [JSE : SER]

Last traded R1.25
Change R0.05
% Change 4.17%
Cumulative volume 75,000
Market cap R796.13m

Last Updated: 25/05/2012 at 19:32. Prices are delayed by 15 minutes. Source: McGregor BFA

 

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Johannesburg - Struggling clothing and textile conglomerate Seardel [JSE:SER] managed to eke out much-needed profits from its Prima Toy and Seartec divisions, despite a tough trading environment.

Results released on Thursday showed that the toys, office automation and consumer electronics segment was the most profitable part of Seardel's business in the 12 months ending March 2010.

As a combination, Prima and Seartec – which largely import their respective branded product ranges – generated turnover of R423m. Combined operating profits came in at R42.5m, more than double the profits earned from Seardel's continuing textile operations.

While Seardel's comparative results for 2009 only covered nine months (due to a change in year-end), the fact that 12-month profits in 2010 were roughly R4m down on the abridged reporting period for 2009 underlines just how tough a trading period the Prima and Seartec businesses endured.

Gross margins from the Prima and Seartec businesses dropped markedly from 18% to 10%.

Seardel CEO Stuart Queen said while gross margins came under pressure in the prevailing economic environment, the businesses were helped by the strong rand and strict cost containment.

He said fixed costs in both Prima and Seartec were reduced by 15% in nominal terms.

Queen said Prima grew its market share in the 12-month period ending March 2010, and noted that further success was dependent on the company securing meaningful international principals and licensing contracts.

He pointed out Prima had recently secured the rights from Disney Interactive Studios for the distribution of computer and console games. "This acquisition represents a major opportunity to expand Prima's product footprint and offers an entrée to the world of interactive electronic games."

Queen said management had also secured a number of prestigious international brands, like Meccano and Crayola.

On the Seartec side, Queen said turnover in most office automation products was substantially down, although microwave and calculator sales were more resilient.

He said Seartec was actively looking for complementary products to market through its distribution network.

 - Fin24.com

 
 
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