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LONG4LIFE LIMITED - Results for the six months ended 31 August 2021
2021/10/14 07:05:00Download PDF Stock report
Results for the six months ended 31 August 2021
LONG4LIFE LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2016/216015/06)
Share code: L4L
ISIN: ZAE000243119
('Long4Life' or 'the Company')
RESULTS OF THE LONG4LIFE GROUP FOR THE SIX MONTHS ENDED 31 AUGUST 2021
Revenue - R1.8 billion (up 30% vs August 2020: R1,4billion)
Trading profit - R214 million (up335% vs August 2020: R49 million)
HEPS - 22.5 cents (up 2 713% vs August 2020: 0,8 cents)
Cash generated – R288 million (up 17% vs August 2020: R247 million)
Dividend – 10 cents a share (August 2020: nil)
Cash on hand - R667 million
“Long4Life continues to focus on sales growth, cost containment, working capital
improvements and enhancing returns. Capital allocation remains key”. Brian Joffe
OVERVIEW
The group’s operating and financial performance has been particularly pleasing over the six
months to 31 August 2021 (‘interim period’), despite the continued impact of the pandemic
lockdown restrictions. Comparison and analysis of the results to the previous six months is not
meaningful given the Level 5 lockdown restrictions in the prior comparable period, and financial
commentary on the results is therefore provided against the pre-COVID six months to 31 August
2019 (‘2019 period’).
Group revenue of R1.8 billion was in line with the 2019 period, and gross profit of R771 million
is a 7% increase on the 2019 period’s R719 million. Trading profit of R214 million exceeded the
2019 period by 6% with improved trading margins of 11.6% (Aug 2019: 10.9%).
Headline earnings of R143.1 million translated into a 55% increase in headline earnings per
share (‘HEPS’) of 22.5 cents from 14.5 cents in the 2019 period. HEPS is calculated on a weighted
average number of shares in issue of 636.6 million (Aug 2019: 875.2 million shares).
The group is benefiting from the highly accretive share buy-back programme that has been
carried out over the previous years.
The group generated excellent operating cash flows of R288 million, up 33% from the 2019
period. The balance sheet of the group remaining solid with cash balance of R667 million as at
31 August 2021.
OPERATIONAL REVIEW
The Sport and Recreation division’s revenue amounted to R1.1 billion up 2% on the 2019
period, a satisfactory achievement under the prevailing market conditions. Trading profit of
R148.1 million was impacted by a non-cash foreign exchange loss, but excluding this impact,
trading profit was 7% higher than the 2019 period. The division is being affected by the
worldwide unprecedented supply chain constraints, which is being actively managed and
assessed on a daily basis. This division has shown resilience during these challenging times, a
result of its strong national execution, diverse product range appeal, agility and strong
customer base.
The Beverages division’s performance in the period was particularly pleasing. Revenue of R630
million was 4% lower than the 2019 period, which was a direct result of both the alcohol
restriction which hampered volumes at Inhle and the change in sales mix arising from excellent
growth in Own Brands at Chill Beverages. Trading profit grew by 43% to R69.6 million from the
2019 period. Well managed working capital has resulted in strong cash generation and
significantly improved returns.
Personal Care and Wellness sales of R152 million were 12% higher compared to the 2019
period, largely as a result of strong occupancy levels at the ClaytonCare facilities. The division’s
trading profit of R16.6 million was 33% lower than in the 2019 period, impacted by the
continued strain on the bottom line at Sorbet.
DIVIDEND
The company has not declared dividends in the past three years given the share buy-back
programmes undertaken. In light of the limited share repurchases in the interim period, the
board has approved and declared a gross dividend of 10.0 cents per ordinary share in respect
of the six months ended 31 August 2021.
The dividend is declared out of income reserves and is subject to South African dividends
withholding tax at a rate of 20%, resulting in a net dividend of 8.0 cents per share payable to
shareholders not exempt from dividends withholding tax.
As at the date of this announcement, the Company has 709 989 417 ordinary shares in issue.
The Company’s income tax reference number is 9745546169.
The salient dates relating to the payment of the dividend are as follows:
Declaration and finalisation date announcement Thursday, 14 October 2021
Last day to trade cum dividend Tuesday, 9 November 2021
Shares commence trading ex dividend Wednesday, 10 November 2021
Record date Friday, 12 November 2021
Payment date: Monday, 15 November 2021
Share certificates may not be dematerialised or rematerialised between Wednesday,
10 November 2021 and Friday, 12 November 2021, both days inclusive.
BRIAN JOFFE TO BE APPOINTED CHAIRMAN
Shareholders are advised that Brian Joffe has informed the board that he will be relinquishing
his position as CEO at the end of the 2022 financial year. The board is, however, pleased to
advise that Brian Joffe will continue with the group and will be appointed as Chairman at that
time. The current Chairman, Graham Dempster, will then assume the role of Deputy-Chairman.
The board is delighted that Brian will continue to participate in the company’s future in a
strategic role and that Long4Life will continue to be guided by both Brian and Graham’s superb
leadership and remarkable experience.
The board has commenced a process to identify Brian’s successor and to allow for a timeous
and smooth hand-over. Shareholders will be advised on progress made in this regard in due
course.
PROSPECTS
Long4Life management remains cautiously optimistic about the prospects for the remainder of
the year and is confident of the group’s ability to execute in terms of its strategic imperatives.
The group continues to review investment opportunities.
This prospects statement has not been reviewed and reported on by the group’s external
auditors.
STRATEGIC REVIEW UPDATE
As previously communicated to shareholders, the company undertook a strategic review of its
structure in order to explore various options to unlock value for shareholders. Investigation in
this regard continues.
Further, the company has received an unsolicited expression of interest to acquire all the shares
in Long4Life. The Board is evaluating this and will update shareholders should there be any
further developments.
Signed on behalf of the board
Brian Joffe Mireille Levenstein
Chief executive officer Chief financial officer
Johannesburg, South Africa
14 October 2021
The financial information contained in this publication has not been reviewed or reported on
by the company's external auditors. The short-term announcement is the responsibility of the
company's directors and is a summary of the information contained in the full results
announcement. The full announcement was released on 14 October 2021 on the Stock
Exchange News Services of the JSE Limited at
https://senspdf.jse.co.za/documents/2021/jse/isse/l4le/hy_21.pdf and on the Company's
website at www.long4life.co.za.
Copies of the full announcement may also be requested at the
Company's registered office and sponsor at jsesponsor@standardbank.co.za, at no charge,
during office hours. Any investment decisions by investors and/or shareholders should be
based on a consideration of the full announcement.
CORPORATE INFORMATION
REGISTERED OFFICE SPONSOR
7th Floor, Rosebank Towers The Standard Bank of South Africa Limited
13 - 15 Biermann Avenue 30 Bake Street, Rosebank
Rosebank, Johannesburg, 2196 South Africa, 2196
Box 521870, Saxonwold, 2132
Further information regarding our group can be found on the Long4Life website:
www.long4life.co.za
Date: 14-10-2021 07:05:00
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