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SHORT-FORM
ANNOUNCEMENT –
Incorporated in the Republic of South Africa AUDITED CONDENSED
Registration number: 2007/007084/06
JSE share code: ELI CONSOLIDATED FINANCIAL RESULTS
ISIN: ZAE000103081
(“Ellies” or “the Company”)
for the year ended 30 April 2023
2023 AT A GLANCE
LOSS AFTER TAX TOTAL COMPREHENSIVE
REVENUE EBITDA LOSS ATTRIBUTABLE TO EQUITY
HOLDERS OF THE PARENT LOSS
DECREASED by 7,7% INCREASED by 26,6% INCREASED by 94,7% INCREASED by 95,9%
to R993,0 million to a loss of R46,9 million to a loss of R85,0 million to a loss of R85,4 million
(F2022: R1 076,4 million) (F2022: loss of R37,1 million) (F2022: loss of R43,7 million) (F2022: loss of R43,6 million)
HEADLINE LOSS PER NET ASSET VALUE NET TANGIBLE ASSET
LOSS PER SHARE
SHARE PER SHARE VALUE PER SHARE
INCREASED by 77,2% INCREASED by 51,2% DECREASED by 63,9% DECREASED by 63,9%
to a loss of 10,56 cents to a headline loss of 10,78 cents to 6,0 cents to 6,0 cents
(F2022: loss of 5,96 cents) (F2022: loss of 7,13 cents) (F2022: 16,6 cents) (F2022: 16,6 cents)
No dividend declared
OVERVIEW OF RESULTS
The Ellies Group, as reported in the trading statement, posted disappointing results for the year ended 30 April 2023. Revenue
decreased by 7,7% on the prior year. Demand for Ellies’ satellite installation and a portion of its retail offering came under pressure
due to difficulties facing the consumer, with rising inflation and interest rates. The Group saw an increase in demand for its products
related to power due to the continual load shedding, being UPS backup solutions, generators, solar and surge protection products.
Unfortunately, the constrained working capital limited the Group’s ability to capitalise on the surge in demand.
The Group’s EBITDA loss increased from R37,1 million to a loss for the current year of R46,9 million. The loss, as reported, includes
once-off separation costs as a result of the restructuring of the business of R18 million. Ellies expects to see the benefits of the
restructuring in the form of reduced operating costs, estimated at R30 million per annum.
Depreciation was flat year-on-year with the prior financial year amounting to R19,1 million compared to the current year’s R19,6
million. Interest, however, increased from R14,7 million to R21,3 million, a consequence of the increase in the prime rate as well as an
increase in the Group’s average borrowings over the year. The prior year results also included a profit from discontinued operations
of R14 million compared to the current year of only R1,9 million. The profit is attributable to the distribution from the liquidation of
Ellies Industries as well as the deregistration of Botjheng Water. Both these matters have now been concluded and are not expected
to have any further impact on the results of the Group.
Deferred tax assets were created in previous years in respect of assessable losses and other temporary differences and are
reflected in the Statement of Financial Position at R36,6 million. Based on the forecasts, the Group expects to utilise this asset in
the foreseeable future, usually three years. The directors decided not to raise a further tax asset in the amount of R20,4 million as
the realisation of the asset would likely extend beyond three years. In the prior year, the impact of the recognition of the temporary
differences improved the loss by R13,1 million.
The loss after tax for the current year was R85 million compared to R43,7 million for the prior year, an increase of 94,7%. The loss per
share increased from 5,96 to 10,78 for the current year, with net asset value per share decreasing by 64,1% to 6,0 cents per share.
As reported in the trading statement released on 25 July 2023, Ellies is happy to report that the restructuring is now substantially
complete, and the Group has begun to see the benefits of a reduced operating expense base. The second objective was to diversify
away from the traditional satellite business toward a smart home infrastructure business, including comprehensive solutions for
alternative energy, water storage, connectivity and the connected home.
The Group is finalising an agreement with its bankers both for an extension to the Group’s term loan currently due on 30 April 2024
as well as an increased working capital facility in order to capitalise on the increased demand in its power-related products noted
above. Management expects this to be finalised during August 2023.
As reported to the market on 1 February 2023, the Group has signed an agreement to acquire Bundu Power. To finance the initial
payment to the sellers of Bundu Power, the Group plans to undertake a fully underwritten renounceable rights offer, aiming to raise
R120 million at an issue price of 7 cents per share. This acquisition represents a pivotal step in the Group’s strategy to expand its
offering into alternative power, and is further expected to bolster the balance sheet and enhance earnings.
The Board and management believe that with the acquisition of Bundu Power, the expected increase in working capital facilities and
benefits from the restructuring, the Group will be well positioned for the next year.
Any forward-looking statements have not been reviewed or reported on by the Group’s auditors, BDO South Africa Incorporated.
SHORT-FORM ANNOUNCEMENT
This short-form announcement is the responsibility of the directors. It is only a summary of the information contained in the audited
Annual Financial Statements and does not contain full or complete details.
These condensed consolidated financial results have not been audited by the Company’s auditors but are derived from the audited
Annual Financial Statements.
Any investment decision by investors and/or shareholders should be based on the published audited Annual Financial Statements.
The Annual Financial Statements including the audit opinion of the external auditor, BDO South Africa Incorporated, which sets out
the key audit matters and the basis for its unmodified opinion with an emphasis of matter relating to the Group’s going concern, are
available on the Company’s website at
https://ellies.co.za/AFS2023.pdf and the JSE link is https://senspdf.jse.co.za/documents/2023/JSE/ISSE/ELI/AFS23.pdf.
The Annual Financial Statements are also available at the Company’s registered office (for inspection, at no charge, during office hours
on any business day) and at the offices of the sponsor, Java Capital, from Tuesday, 1 August 2023 to Tuesday, 8 August 2023, both days
inclusive. Copies of the Annual Financial Statements may be requested by email to investorrelations@ellies.co.za.
1 August 2023
ELLIES HOLDINGS LIMITED
Directors: Mr Timothy Fearnhead (Chairperson)*, Dr Shaun Prithivirajh (CEO), Mr Guy Moretti (CFO), Mr Darren Kramer*, Mr Martin Kuscus*, Mr Edick Lehapa*,
Ms Maya Makanjee*, Ms Sedzani Mudau*, Mr Francois Olivier*, Mr Edward Raff*
* Independent Non-Executive
Preparer: Prepared by Mr Jacques Liebenberg (BCompt (Hons), AGA(SA)), Group Reporting Financial Manager, under the supervision of
Mr Guy Moretti (BCompt (Hons), CA(SA)), Financial Director and CFO
Company Secretary: Acorim (Pty) Ltd
Registered office: Brooklyn Place, 3 Centex Close, Kramerville, Sandton, 2090 • (PO Box 57076, Springfield, 2137)
Sponsor: Java Capital, 6th Floor, 1 Park Lane, Wierda Valley, Sandton, 2196
GRAPHICULTURE
Auditors: BDO South Africa Incorporated
Transfer secretaries: Computershare Investor Services (Pty) Ltd
www.ellies.co.za
