Ellies Holdings Limited has released its results for the year ended 30 April 2021, reporting a profit of R30.4 million for the year — up from a loss of R196.1 million in the previous financial year.
“The newly structured and repositioned Ellies has produced a solid set of results despite the unprecedented global pandemic,” said Ellies CEO, Shaun Prithivirajh.
“The main contributor to this successful turnaround has been a company-wide focus on executing the strategy and while we have been opportunistic to some degree, our costs have been well managed due to the prevailing uncertainty.”
EBITDA improved to R76.0 million and operating profit increased to R57.1 million.
Prithivirajh said that the reason Ellies reported a profit this year is largely attributable to the significant changes the executive team implemented.
During the year under review, Ellies migrated the Johannesburg logistics and warehousing operations to Value Logistics which also required integration into Value’s IT systems.
This resulted in a marked improvement of governance and internal controls which have plagued Ellies in the past.
This change has generated a decrease in operating expenses of 4.3% in the nine months of operation.
Earnings per share for the year amounted to 7.25 cents compared to a loss per share in the previous year of 28.97 cents.
Similarly, headline earnings per share amounted to 9.19 cents per share compared to a headline earnings loss of 18.66 cents per share in 2020.
Another milestone includes the order for liquidation of the manufacturing segment which has been a financial strain on Ellies for many years.
While every attempt was made to sell the segment, no sale was realised and the High Court granted the final liquidation order on 12 April 2021.
“With the continued downward trajectory of Ellies Industries, the Group could no longer sustain the financial support to keep the business afloat. Even though it was a difficult decision to make, it was the responsible one for the Group,” said Prithivirajh.
Ellies’ focus on diversification and its move into the solar sector has also stood it in good stead, according to Prithivirajh.
“With challenges related to Eskom and low consumer and business confidence in energy security, we have grown from a single product offering to a range of alternative energy solutions for both consumers and businesses,” he said.
“As consumers become more knowledgeable about solar, Ellies is well positioned to take advantage of this growing necessity.”
Additionally, the business has announced its proposed B-BBEE transaction with Imvula Education Empowerment Fund Trust which will significantly improve Ellies’ prospects of reaching a compliant Level 4 B-BBEE status as a minimum.
“Once finalised, this will be a viable relationship for both Ellies and Imvula, and we look forward to welcoming Imvula to the Ellies family,” said Prithivirajh.