COMPANY NEWS IN BRIEF

Cash sales fall at Lewis

South Africa's largest furniture chain Lewis says it is already seeing of deteriorating retail trading conditions, reporting on Thursday that cash sales fell in its six months to end-September, as rampant inflation and a weak labour market puts pressure on its customer's wallets.

The JSE-listed furniture and appliance group reported on Thursday that merchandise sales rose 4.3% to R2.1 billion to end-September, but added that “trading conditions weakened significantly in the second quarter of the financial year”.

While credit sales grew by 16.4% for its half-year, its cash sales declined by 8.1% “reflecting the pressure on consumer disposable income.”

The group said it increased headline earnings by 4.4% to R236 million, while headline earnings per share rose 19.2% to 393c “reflecting the positive leverage effect from the group’s aggressive share repurchase programme”. The group kept its interim dividend at 195c per share.

CEO Johan Enslin said a statement that escalating food, fuel and electricity costs, together with rising interest rates and record unemployment had negatively affected consumer spending and confidence.

“Our traditional retail brands of Lewis, Beares and Best Home & Electric have proven more resilient in the current environment, supported by increased credit sales,” he said.

But he said cash sales had been hit particularly hard, especially at its UFO stores, which focus on higher-income consumers. UFO was also particularly hit by rail woes, given it imports about two thirds of its stock.-Fin24

Former Steinhoff boss to go on trial

A court in Germany has announced that the accounting fraud trial of former Steinhoff CEO Markus Jooste will start early next year.

The Oldenberg regional court said in a media statement on Thursday that it had yet to secure a date for the case to begin, however.

Last year Jooste, two former Steinhoff executives and a fourth accused, who was not employed at the retailer, were charged with balance sheet fraud carried out between July 2011 and January 2015.

The case was subsequently split in two, in part due to travel restrictions caused by the Covid-19 pandemic. The case against two former Steinhoff executives, who are in living in Germany, is set to begin on 3 May next year.

The second case involves Jooste and an unnamed 72-year-old co-accused, who acted as a trustee of a trust in the British Virgin Islands.

The Oldenburg court said it would share the date for the start of Jooste's case as soon as it had been secured.

While German authorities have not yet officially named any of the accused, a source with knowledge of the investigation previously told News24 that Jooste was one of the four accused.

The court referred to him as the CEO of Steinhoff International Holdings until the end of 2017. Jooste's South African lawyer did not immediately reply to a request for comment. –Fin24

TotalEnergies about to submit to drill for gas

French energy giant TotalEnergies is preparing to submit its final application for approval to drill up to five wells for oil or gas between Cape Town and Cape Agulhas. The project has met opposition from environmental groups but the company says it is part of South Africa’s transition from coal.

The scoping and environmental impact process started in May this year. If the project is approved, the drill area will span about 10,000 square kilometres, with the closest point 60km from the coast and the furthest 170km.

This application is one in a rush of offshore oil and gas applications along South Africa’s coast. This is part of a wider expansion by multinational companies into Africa, as a recent report by environmental research group Urgewald, in partnership with dozens of organisations in Africa and Europe, shows.

TotalEnergies is the biggest oil and gas developer in Africa. In this project, it holds a 40% interest in the block, and is the operator. Shell has a 40% interest and the state-owned Petroleum Oil and Gas Corporation of South Africa (PetroSA) has 20%.

A public participation process concluded last week after meetings in coastal communities, including Saldanha Bay, Hout Bay, Kleinmond and Hermanus. This formed part of the Environmental and Social Impact Assessment (ESIA). Independent assessors from SRL Consulting evaluated marine ecology impact, noise impact, socioeconomic impact, fisheries impact, climate impact, and air quality impact.-Fin24

Clicks eyes all of Sorbet for R105 million

South Africa's largest pharmacist Clicks says it wants to take full ownership of salon owner Sorbet Holdings for R105 million, something that would add a franchise chain to the JSE-listed group.

Clicks already has 25% of Sorbet Brands, which holds the intellectual property of the group, but control of the holding structure will give it full ownership of all entities, including salons which operate under the banners of Sorbet, Sorbet Man and Candi & Co.

The acquisition would add over 190 salons to the pharmacist’s more than 850 SA stores, and mark its first acquisition of a franchise chain.

Clicks is acquiring Sorbet from Old Mutual Private Equity, who picked up the business earlier in 2022 as part of the previously listed Long4Life group. Sorbet was founded by Ian Fuhr in 2005.

"Sorbet has a natural strategic fit and is closely aligned with Clicks Group’s health, beauty and wellness offering," Clicks CEO Bertina Engelbrecht said in a statement on Thursday.

"Sorbet is a highly trusted brand with a loyal and growing customer base, and we aim to capitalise on the opportunities to expand our presence together and accelerate revenue growth."

Sorbet products are currently sold in Sorbet salons and Clicks stores and the transaction will ensure that these products will be sold in the Clicks stores in perpetuity, the pharmacist said.-Fin24