The big news from Long4Life is that Brian Joffe will be vacating the CEO position, but will remain as President at the end of the current financial year.
The announcement, made on Thursday at the end of the presentation of the group’s provisional results until August 2021, does not offer information on the reasons for Joffe’s departure.
Joffe spent 27 years building Bidvest into an international giant before leaving the group in 2017. He brought the same formula of selecting reasonably valued business and entrepreneurial managers to his next company, Long4Life. Joffe is now in his 70s, so he will no doubt want to enjoy some of the fruits of his labor accumulated over more than three decades.
Long4Life was always going to be a group to watch, given Joffe’s partnership and his track record at Bidvest.
As a commentator on the Sasfin market, David Shapiro remarked Many years ago, Joffe’s success was his ability to spot opportunities that others missed. For many years, Bidvest seemed like an inappropriate agglomeration of companies that lacked a coherent theme, but Joffe saw something that others did not see: the ability to bring these companies together through synergy or cross-marketing. He rarely made mistakes. He encouraged management to be bold and was willing to add a little capital where needed to get things moving in the right direction.
The same formula that worked at Bidvest was clearly in evidence at Long4Life, and shareholders will be reassured that he is not completely retired from the company.
Current President Graham Dempster will assume the role of Vice President. Meanwhile, the board has begun the search process for a new CEO.
The group’s interim results were clearly affected by the Covid lockdowns in 2020, making the comparisons to 2019 more meaningful. The group comprises three divisions: sports and recreation; drinks and personal care and well-being.
Covid’s restrictions were most evident in the beverage division, where revenues of R630 million were down 4% from 2019.
However, it was not all bad news, as the closings focused management’s attention on costs and logistics, while increasing the market presence of Chill Beverages and Inhle.
The result was a 43% increase in business profit to R69.6 million.
However, as the graph below shows, Long4Life’s stock price was affected by the Covid closures.
Especially affected was the Personal Care and Wellness division, made up of brands such as Sorbet, a beauty therapy network with more than 200 stores, Lime Light and Candi & Co, involved in a growing hair and beauty market, and ClaytonCare, which deals with the rehabilitation and recovery of the patient.
Overall, sales in this division increased 12% from 2019, largely as a result of strong occupancy levels at the ClaytonCare facility and an acquisition by Lime Light.
The third division, Sports and Recreation, achieved a slight 2% increase in 2019 revenues for the comparable period in 2019, but reported a business gain of 4% below R148.1 million (on revenues of R1.1 million). million) due to foreign exchange. losses. But due to the impact of the loss of foreign exchange, trading profits were 7% higher. This division is made up of brands such as Sportsmans Warehouse and Shelflife, which suffered from the limitation of team and school sports during the business period.
The group paid an inaugural dividend of 10 cents a share, having forfeited dividends in prior periods during a share buyback plan.
Long4Life management says it is optimistic about the future, although a key risk is the possibility of a fourth wave of Covid infections, as well as continued supply chain limitations.
The group says it has received an unsolicited expression of interest to acquire all of the Long4Life shares and is currently evaluating the offer.