Electric cabling specialist sets sights on merger and acquisition opportunities in SA and rest of Africa
Low-voltage electric cabling specialist South Ocean Holdings could be on the deal trail. In an annual report released last week, CEO Andre Smith said the group was alert to suitable merger & acquisition opportunities in SA and in the rest of Africa as well as explore opportunities to extend its product range.
Though the group had a tough 2022 financial year, it has a solid balance sheet with net cash holdings of close to R95m. Smith pointed out that SOH, now the largest manufacturer and distributor of low-voltage electric cable in SA, had seen demand for its products outstrip supply. “We have therefore continued to focus on expanding our production capacity to cater for this demand.” In the last financial year to end-December SOH made investments in associate companies such as Niehoff Electrical Warehouse, Global PE and Mwanga Afrika Cables. Smith said that several of SOH’s competitors closed their low-voltage operations or were placed in business rescue in the past financial year. “This opened up opportunities for us to grow our client base and extend our distribution capabilities both locally and within the Sadc [Southern African Development Community] countries.” He said SOH would also continue implementing its strategy of backwards integration and explore new distribution channels for its products to further strengthen the business. Looking ahead, Smith said that while 2023’s outlook was uncertain, SOH had a strong advance order book and continued to enhance production capabilities, efficiencies and product range. Among bigger challenges facing the group he cited fluctuations in the copper price, load-shedding, cheap imports, political and policy instability and a volatile exchange rate. Smith said SOH would still explore opportunities in Africa “as moving into new territories is one of the most immediate ways to secure growth”. The group would also look at gaining access to large contractors serving government, the parastatals and corporates in SA, especially those working on infrastructure projects. Since its listing on the JSE in 2007, SOH has been bedevilled by inconsistent profit performances. In the year to end-December, the group saw earnings drop from 32c to 22c a share on the back of reduced turnover of R1.87bn .The annual report said labour action affected its operations directly when workers went on a go-slow after 23 employees were dismissed for submitting false sick notes. SOH was unable to respond to this by implementing phased shift cycles due to stage 6 load-shedding and so put the entire workforce on short time to manage costs. These developments hampered production markedly with SOH reporting a reduction in cable volume from 19,789 tonnes in 2021 to 16,254 tonnes in 2022. What is more, stop-start operations and excessive changeovers due to the shortage of raw materials also had an impact on SOH’s scrap rate, which rose to average 9.30% in 2022 from 2021’s average of 7.9%. SOH was 117c at close of trade on the JSE on Friday, well off its 12-month high of 164c in August last year.
South Africa Latest News, South Africa Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
South Africa’s new property landscape – from micro apartments to ‘lifestyle farms’South Africa's new property landscape - from micro apartments to 'lifestyle farms'
Read more »
South Africa: Sjava and Big Zulu come together for anthem of the agesIn late March, two of SouthAfrica’s most prominent musicians invited a few dozen entertainment industry personnel to a venue in the north of Johannesburg for a special announcement....By ShingaiDarangwa
Read more »
South Africa’s massive pension problemThe Allianz Global Pension Report 2023 says South Africa has one of the “poorest” pension systems in the world.
Read more »
UAE President's Visit to South Africa Above Board - GovtThere is nothing untoward about United Arab Emirates (UAE) President and Ruler of Abu Dhabi His Highness, Sheikh Mohammed bin Zayed al Nahyan and his entourage's visit to South Africa. On Wednesday, April19, 2023 the landing of the UAE raised concerns, taking place at a decommissioned Bulembu military airbase in Bisho in the Eastern Cape, which was renovated with funds donated by the UAE president. At a media briefing, the Minister in the Presidency, Khumbudzo Ntshavheni has said that nothing improper unfolded in the Eastern Cape's preparations for the private visit by UAE President and Ruler of Abu Dhabi His Highness, Sheikh Mohammed bin Zayed al Nahyan and his entourage. "We are here today to share with the nation that this visit has been made possible with the diligence and integrity required of government as we interact with people from all walks of life, including persons of the standing of the UAE president," the minister said. South Africa was dealt a hefty blow by the UAE recently, with the middle eastern country refusing to extradict the Gupta brothers - Atul and Rajesh - who fled to Dubai after they were implicated by the Zondo Commission of among others, the irregular awarding of tenders, influencing various political appointments and of the capture of the South African Revenue Service. The Guptas drew the attention of South Africa 10 years ago when they landed their private plane at the Waterkloof airforce base in Pretoria, to attend a family wedding.
Read more »
This new work trend causing headaches for businesses in South AfricaThis new work trend is creating an unproductive environment for many employees.
Read more »