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Alert Steel’s white knight isn’t naïve about the group’s future. He’ll be staying way from the bright lights and big competition. In other words, the rural market will be his base camp. Since the group announced Johan du Toit as its new CEO – and what on paper looks like a very impressive turnaround strategy – it’s been culling a few business segments. Alert Steel Holdings [JSE:AET] is at last getting back to its core business: steel retailing.
Clearly, it’s the strategy it should have stuck to before it got carried away with the excitement of the building boom and opened plumbing, retailing and diversified hardware supply outlets.
Nonetheless, Du Toit has already sold off most of its offending business segments and is manoeuvring Alert out of a few costly long-term property leases and planning a rights issue. The group also recently swapped its rebar business with Murray & Roberts to gain 100% control of its nine retail branches in Polokwane.
After two years of poor earnings, an embarrassing loan to the previous MD’s other companies and a history dotted with costly contracts, it really doesn’t seem as if the share can drop any further.
However, the entry of Du Toit into the ring indicates someone still sees a flicker of hope for the down and out AltX listed company. “We have a large footprint and I see great opportunity here to recover our market share,” says Du Toit. The group’s bank, Nedbank, has learned a hard lesson through AG Industries that liquidation is a very ugly last resort. That went a long way in Alert renegotiating its debt.
As the construction building boom of 2007 turns into a bust for a number of AltX-listed companies, Du Toit making Alert his pet project is all the more telling. Initially asked to look at Alert’s situation by a shareholder, he took on the job after completing some successful transformations at RTT and Kelly Group. Speaking from its largely defunct Kya Sands branch, Du Toit says plans for Alert’s rebirth are on track. The share was stuck at 4c for months before its turnaround plan was announced but has since risen to 20c.
Clearly, it’s the strategy it should have stuck to before it got carried away with the excitement of the building boom and opened plumbing, retailing and diversified hardware supply outlets.
Nonetheless, Du Toit has already sold off most of its offending business segments and is manoeuvring Alert out of a few costly long-term property leases and planning a rights issue. The group also recently swapped its rebar business with Murray & Roberts to gain 100% control of its nine retail branches in Polokwane.
After two years of poor earnings, an embarrassing loan to the previous MD’s other companies and a history dotted with costly contracts, it really doesn’t seem as if the share can drop any further.
However, the entry of Du Toit into the ring indicates someone still sees a flicker of hope for the down and out AltX listed company. “We have a large footprint and I see great opportunity here to recover our market share,” says Du Toit. The group’s bank, Nedbank, has learned a hard lesson through AG Industries that liquidation is a very ugly last resort. That went a long way in Alert renegotiating its debt.
As the construction building boom of 2007 turns into a bust for a number of AltX-listed companies, Du Toit making Alert his pet project is all the more telling. Initially asked to look at Alert’s situation by a shareholder, he took on the job after completing some successful transformations at RTT and Kelly Group. Speaking from its largely defunct Kya Sands branch, Du Toit says plans for Alert’s rebirth are on track. The share was stuck at 4c for months before its turnaround plan was announced but has since risen to 20c.
