Brian Joffe banking on gin and tonic-fuelled summer to lift Covid-19 gloom in South Africa

Long4Life, the investment group started by Bidvest founder, Brian Joffe, said that despite significant disruption on all group businesses as a result of the Covid-19 pandemic, it did well to deliver revenue and trading profit for the six month period ended August 2020.

Long4Life, which holds a portfolio of assets in the leisure and lifestyle sectors including Sportsmans Warehouse and Sorbet, reported revenue of R1.42 billion, down from R1.84 billion, while trading profit declined to R49.1 million, from R200.7 million before.

Basic earnings per share and headline earnings per share amounted to 0.8 cents per share, from 14.5 cents per share.

Cash generated by operations increased to R246.5 million (August 2019: R217.3 million), while the board resolved not to declare a dividend for the period.

Sports retail sales dropped by 14% as people bought more home exercise equipment as the national lockdown curtailed team and school sports. Online sports sales, however, increased by 178%.

Outdoor retail fell by 36% as the national lockdown prohibited extensive travelling and closed the borders to international tourists.

The group said consumers preferred to shop outside malls which helped its Sportsmans Warehouse and Outdoor Warehouse branches that are in strip malls and outside the larger malls.

“With the onset of Covid-19, the trend of South Africans moving towards a lifestyle that is healthier and more focused on outdoor activities has accelerated and these businesses provide a compelling offering to service this need,” Long4Life said.

The group’s Performance Brands owns, designs, buys, manufactures and distributes the First Ascent, CapeStorm, Second Skins, OTG Active and African Nature brands. It also has the distribution rights for Speedo and Opro.

Its sales were severely affected by minimal demand from the lodge, school and corporate sectors, but its online business grew. It restructured the local manufacturing facility which is now “operating at better efficiency”.

Personal care and wellness reported a R22 million trading loss.

Sorbet’s revenue fell by 69%, because it was unable to trade until June 2020 and then with restricted capacity. It has 165 salons and nail bars, 23 Sorbet Man stores, 15 Dry Bar and eight Candi & Co stores. It closed nine of its salons while two opened during the reporting period.

The beverages division includes Inhle Beverages and Chill Beverages and reported an operating loss of R5.3 million.

“While the operations traded throughout lockdown, it was at significantly reduced volumes due to the suspension of alcohol sales as well as very limited on-consumption sales,” the group said. “Co-packing volumes, including sales in the Fitch & Leedes mixer brand were particularly hard-hit. Score Energy’s performance was pleasing.”

Joffe said he expects its sales to increase as summer approaches.

“Since the recent easing of the lockdown, there has been a marked improvement in trading across most of our businesses. Additionally, given the seasonality of all our businesses we anticipate increased demand in the summer months for our products.”

He said that there has been an uptick in volumes at both Inhle and Chill, and in September 2020 both plants were close to full capacity, with co-packing customers gearing up for buoyant summer sales.

“Our own brands, Score Energy and Fitch & Leedes, are well placed to continue growing market share with new product and flavour launches planned for the summer and in the 2021 calendar year.

“As consumer spend is currently biased on expenditure for the home, health and personal wellbeing, this augurs well for us to participate positively in this changing market dynamic,” Joffe said.

Read: Veldskoen and Sorbet investor Brian Joffe scores big payday