Delisting plan sends Verimark shares soaring
Desultory results from the direct retailer were upstaged by founder Michael van Straaten's plan to buy out minorities
Verimark’s share price jumped 16.5% to R1.06 on Monday morning on news that founder Michael van Straaten has proposed to buy out minorities and delist the direct retailer.
Van Straaten, via his family trust, owns 57% of Verimark, whose market capitalisation was R119m at Monday morning’s share price.
The announcement followed Verimark’s interim results statement, which showed it fell into an interim loss of R2m for the six months to end-August from a profit of R1.1m in the matching period.
Revenue declined slightly to R207.5m from R209.7m.
Verimark, as an importer of products including Floorwiz and Twista, is among the JSE-listed companies that suffer most when the rand weakens.
“The first six months [of] trading has been tough for Verimark as for most import retailers given the volatility of the rand against foreign currencies,” the company said.
“The South African economy is in a technical recession and consumer confidence has suffered as a result.”
Its operating costs rose 12.% to R98.1m, partly as a result of an increase in sales staff costs to improve store presence and revenue.
Revenue slipped 1% to R205.7m.
The company opted not to declare an interim dividend.