The bottom line: Long4Life is short on critical mass, for now
And Steinhoff bigwigs snub parliamentary hearings
Outlook not exactly clear for Joffe’s Long4Life
Long4Life, the investment vehicle headed by deal-making doyen Brian Joffe, has been fairly industrious on the acquisition front. The group – which listed in April last year – has snagged investments in beauty therapy chain Sorbe and, sportsware/sportswear retailer Holdsport, as well as two specialist beverages ventures.
The company’s share price enjoyed a strong run initially, but has subsequently been reined in markedly as sceptical voices became more audible around the risks of acquisition driven growth strategies.It’s difficult, at this early juncture, do discern exactly how these disparate ventures will gel to form a operational platform from which Joffe can launch further forays to build critical mass and sustainable profits in Long4Life. A trading statement – covering the 11 months to end February – released on Wednesday does at least give some inkling to the earnings prowess of the early assemblage of assets.
Long4Life expects to report earnings of between 28c per share and 31c per share for the 11-month trading period. When perusing the bottom line number it must be remembered that the acquisitions of Holdsport, Sorbet and Inhle Beverages only became unconditional at the end of October last year. The Chill Beverages acquisition only became effective after the end of February.
In other words the earnings figure is mainly driven by interest earned on Long4Life’s cash pile and around four months of trading of three acquired assets. On the face of it, this does not appear to be a bad result – although a clearer indication of sustainable earnings power of the acquired assets will only be firmed up once the full financials are released early next month.Steinhoff bigwigs snub an impotent parliamentThe impotency of the South African regulators became apparent this week when one by one Steinhoff-related individuals informed the parliamentary portfolio committees they would not be attending the second day of hearings into the events around the company’s spectacular collapse. But each one of them, Ben la Grange, Heather Sonn, Johan van Zyl, Steve Booysen (the members of the Supervisory Board) and the entire top management team did make sure to thank the committee for the generous invitation.The members of the four committees were particularly irritated by former CEO Markus Jooste’s continued refusal to attend any of its review sessions. They may, or may not, succeed with their plans to subpoena him. Steinhoff shareholders who’ve lost a lot of money mightn’t be too happy with it but the fact is Jooste does have rights in terms of the constitution. His lawyers contend being forced to pitch up at parliament and answer questions represent a contravention of these rights.
The committee members are also considering subpoenaing La Grange. They might want to look to the UK parliament to see what it plans to do about getting Facebook’s Mark Zuckerberg to change his mind and attend its parliamentary inquiry into fake news. Zuckerberg has undertaken to attend US senate hearings into the same issue and reckons that as the CEO of a US company that is enough. So much for the fact Facebook has become hugely powerful and wealthy because of its global footprint.
But Wednesday did prove to be a useful exercise after all as PwC tried hard to discourage any thoughts of an early resolution to the crisis. And the Financial Services Board and the Companies and Intellectual Property Commission did manage to encourage hope there would be consequences for some of the key players.