Deep inside the PSG machine, small engines are revving up
Hot subsidiary CA Sales Holdings is kicking out the jams by distributing consumer goods in southern Africa
PSG Alpha, the nursery of the PSG Group, has an intriguing portfolio of high-growth opportunities – but arguably none with the profit traction of unsung CA Sales Holdings.
By maintaining listings on the small Botswana Stock Exchange and the new 4 Africa Exchange, CA seems to reinforce its relative obscurity – yet the company plies a lucrative niche in fast moving consumer goods distribution throughout southern Africa.
The company last week announced a sprightly revenue increase of 15% to R5.5bn and a commendable double-digit increase in gross profit to R824m. Bottom line jumped 20% to over 40c a share with strong cash flows underlying the quality of headline earnings.
But perhaps it is the geographical breakdown of CA’s profit before interest and tax that is most telling about the company’s strategic focus. The core market in Botswana saw an increase of 36% to R151m off sales of R3.1bn – with profits in SA bucking the dour consumer trend by rising 12% to R86m. Profits generated in Swaziland shifted up 10% to R67m, but the small Namibian segment sagged slightly to R22m.
Considering the unrelenting pressure on consumer industries, CA – with a stout balance sheet and an adventurous strategic shareholder in PSG Alpha – must be poised to snatch well-priced opportunities that abound in southern Africa.
But surely the more immediate issue is taking the impressive CA to a wider investing audience. Surely a JSE listing beckons?