JSE-listed lifestyle products group Long4Life recorded a 12% year-on-year decrease in revenue to R3.58-billion for the financial year ended February 28, as the pandemic and lockdown restrictions in South Africa had a significant impact on the operating and financial performance of the group.
Its trading profit decreased to R367.1-million from R520.1-million in the 2020 financial year.
The group notes that it recovered well in the second six months of the financial year, with strong performances from the sport and recreation and beverage divisions.
The pandemic resulted in a considerable focus on costs throughout the group, with operating expenses having decreased by 8% year-on-year to R788.3-million.
"Overall, the group has emerged relatively unscathed and, in certain respects, more resilient and with more efficient employment of funds in the businesses," Long4Life CEO Brian Joffe said on May 13.
Headline earnings decreased to R234.6-million from R364.1-million in the prior financial year, while earnings a share decreased by 26% to 31.9c from 43c in the previous year.
Working capital levels reduced by 25%, driven largely by sustainable improvements in inventory management in the sport and recreation and beverage divisions.
As a result, cash conversion and operating cash flows were "excellent" during the year, with cash flows from operating activities up 14% year-on-year.
"While there was significant improvement in asset management, return on funds employed (ROFE) was negatively impacted on by the decline in trading profit in the first half of the year.
"The ROFE of 27%, compared with 38% in the prior year, is expected to improve substantially going forward with the improved earnings," the company reported.
"The past year has been devoted to aligning strategic and operational objectives to ensure business activities are scaled responsibly and positioned effectively in order to navigate the impact of Covid-19 and ensure relevance in a post-pandemic new norm," said Joffe.
Meanwhile, Long4Life reiterated that it is undertaking a review of its corporate structure and strategic focus. While underlying value has been created in the current Long4Life format, various alternatives are being evaluated by the board in order to maximise shareholder value over the medium term.
These alternatives include, besides others, retaining the status quo, a possible delisting from the JSE or the unbundling of certain focused assets.