Ellies said the challenging economic environment in South Africa and global supply chain pressures had curtailed its ability to deliver its products to retailers.<\/p>\n
It also blamed the reduced demand for services related to the installation of satellite products for putting pressure on our business.<\/p>\n
\u201cIn view of this, it has become abundantly clear that Ellies cannot move forward with its current structure,\u201d it said.<\/p>\n
The retrenchment plans follow disappointing financial results, with revenue declining 10.8% and EBITDA decreasing 149%. It turned from a profit of R76 million to a loss of R37 million.<\/p>\n
Ellies CEO Shaun Prithivirajh blamed the Covid-19 pandemic, July 2021 riots, the local economic downturn, and micro-chip shortages for the poor results.<\/p>\n
The reality is that the blame lies much closer to home. In short, Ellies messed up.<\/p>\n
In 2020, Prithivirajh told investors they had cleaned up the business and were ready for future growth opportunities.<\/p>\n
As part of the turnaround, Ellies focussed on alternative energy solutions and moving from DStv satellite dish installation to fibre-to-the-home (FTTH) as new revenue streams.<\/p>\n
It was an excellent strategy. The energy crisis presented Ellies with a brilliant opportunity to rapidly increase sales through its alternative energy products.<\/p>\n
Ellies has a wide range of backup power products \u2014 including solar solutions and inverters \u2014 to serve residential and commercial clients.<\/p>\n
The high price of petrol and diesel has also played into Ellies\u2019 hands, making its battery backup and inverter trollies attractive alternatives to generators.<\/p>\n
Considering the exceptional demand for alternative energy solutions and fibre since 2020, when Prithivirajh unveiled its new strategy, it raises the question of why Ellies is facing financial hardship.<\/p>\n
While other solar PV, battery backup, and fibre players are showing exceptional growth, Ellies is struggling.<\/p>\n
The answer lies in poor operations. Ellies were often out of stock during the height of load-shedding and did not do proper marketing to capitalise on the demand for its products.<\/p>\n
Ellies blamed global supply chain pressures, but its competitors were able to overcome these challenges.<\/p>\n
It is also not a new problem. Long before Covid-19 pandemic and supply chain problems, Ellies power trolleys were in short supply during load-shedding.<\/p>\n
Ellies should have learned from these experiences and managed its stock levels better to grow the business.<\/p>\n
However, when excuses are accepted in a business, things go south very quickly.<\/p>\n
The result is that Ellies employees are now facing retrenchments when the company should be one of the best performers on the JSE thanks to extended load-shedding.<\/p>\n
There are even accusations that Ellies dismissed employees<\/a><\/strong> for not complying with the company\u2019s Covid\u201319 vaccine mandate as a way to bypass a formal retrenchment process.<\/p>\n Ellies would not answer questions on why it continues to blame reduced demand for satellite products when it knew about this problem in 2020.<\/p>\n It would also not comment on why it is firing staff when other energy solution providers are experiencing booming trade.<\/p>\n It also avoided answering questions about using a Covid\u201319 vaccine mandate as a way to dismiss employees and bypass a formal retrenchment process.<\/p>\n Ellies\u2019 share price plummeted 98% from a high of R9.39 in May 2013 to its current price of R0.15.<\/p>\n Ellies\u2019 revenue is on a downward trend, showing the company\u2019s turnaround and growth strategy is not working or is implemented poorly.<\/p>\n This article was first published by Daily Investor<\/a><\/strong> and is republished with permission.<\/em><\/p>\n Ellies was perfectly positioned to capitalise on load-shedding with its alternative energy products, but poor management crushed its chances of success, and it now has to retrench staff.<\/p>\n","protected":false},"author":341108,"featured_media":427524,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"idle","_sma_x_autopost_error":"","_sma_x_post_id":"","_sma_facebook_post_id":"","_sma_instagram_post_id":"","_sma_threads_post_id":"","_sma_x_attempts":0,"footnotes":""},"categories":[80335],"tags":[18911,35,66935],"class_list":["post-464679","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing","tag-ellies","tag-headline","tag-shaun-prithivirajh"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/464679"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/341108"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=464679"}],"version-history":[{"count":0,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/464679\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media\/427524"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=464679"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=464679"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=464679"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nEllies share price<\/strong><\/h2>\n
![\"\"](\"https:\/\/mybroadband.co.za\/news\/wp-content\/uploads\/2022\/10\/Ellies-share-price-2013-2022.jpg\")
<\/a><\/p>\n
\nEllies revenue<\/strong><\/h2>\n
![\"\"](\"https:\/\/mybroadband.co.za\/news\/wp-content\/uploads\/2022\/10\/Ellies-revenue-2019-2022.jpg\")
<\/a><\/p>\n
\nNow read:\u00a0Mustek’s inverter trollies flying off shelves in South Africa<\/a><\/h2>\n","protected":false},"excerpt":{"rendered":"