Ellies scrambles to finalise delayed results
The company's board will meet on Friday next week to finalise long-awaited financial results
The board of electrical products group Ellies meets on Friday next week to finalise long-awaited financial results amid concern that the delay sends the wrong signals.
“We have scheduled a meeting with the board for January 18 and will hopefully have the matter resolved by then, get board approval to release the results, and should do so either the same day or shortly thereafter,” the company’s new CEO, Shaun Prithivirajh, told Business Day.
Investors had expected the results to be published at about the time of Ellies’s annual general meeting in early December, when shareholders opposed Prithivirajh’s appointment unsuccessfully.
Now the reporting deadline of January 31 looms.
Prithivirajh said this week the results were delayed over “contrary views” within the board as to how Ellies should account for a successful claim against a construction company. The funds were received during the interim period ended October.
“This matter is a ‘below the operating line’ issue and has no bearing on the period under performance review,” he said.
Independent analyst Anthony Clark said the delay “just sends the wrong signal to the market”.
“The results were due out before the AGM and they are being pushed out to the zenith of when they’re allowed to be published, and it just doesn’t look good because they’re fostering speculation that something is untoward,” Clark said.
After the company’s AGM, Ellies said it had no plans to axe Prithivirajh even though 52.8% of votes cast at the meeting were against his appointment. He took over the reins from Adrian Bock in August, after spending two years as group CEO of GloCell.
In July, Ellies reported its first annual profit in four years.
Revenue for the year to April 2018 rose 8% to R1.4bn, while the group recorded a total comprehensive profit for the year of R38m, from a loss of R249.9m the year before.
But despite the return to profitability, the company’s share price has yet to show signs of recovery.
The stock, which reached a high of nearly R10 in 2013, was trading at just 19c on Wednesday.
“Even if Ellies’ interim results are decent, I think given what’s been going on, they’ve just made it even harder for themselves to attract an institutional following,” Clark said.
“Sadly, it’s become a private client and speculation stock only.”
Investors were once hopeful that Ellies would be a major beneficiary of the government’s digital migration project, for which it invested significant sums.
The company was expected to supply set-top boxes for digital television, though the government has delayed the project for years, leaving SA well behind its peers in terms of digital migration.
Bock told Business Day in July Ellies was nearly ready to start making bolt-on acquisitions again.
“I’m a big proponent that Ellies has to grow,” he said.
He also said the company’s new business unit that provides lighting, satellite and solar products to companies was starting to gain traction.
“We’ve got a pipeline in excess of R60m or R70m of potential deals,” he said at the time.