Trade Tatler
“Buying the right computer and getting it to work properly is no more complicated than building a nuclear reactor from wristwatch parts in a darkened room using only your teeth.”
Dave Barry



THIS ISSUE:     13 Jan - 27 Jan

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Clicks  Move along, nothing to see here ...

There may or may not be any truth in the rumour that Clicks might or might not be readying itself for a takeover by UK pharmacy chain Boots Alliance, where CEO Mr Kneale enjoyed a happy three decades before coming over here to apply some of his learnings to Clicks, which he has led from the doldrums to a brighter tomorrow – sales up a phenomenal 16.8% the last 18 weeks of 2010 off a high base, with comparable store sales up 13.6%, and Clicks itself contributing a more than satisfactory 12.7% to the mix. Gimlet-eyed analysts have observed that Clicks has cleaned itself up nicely in recent months, sharpening its focus on pharmacy and generally looking like a business readying itself for a transaction. Its market cap sits today at an appealing R10billion, while its share price has achieved sparkling new highs.
Comment: To be fair, as Mr K points out, Boots still has some private-equity debts to settle, and is focusing on its core markets of Europe, Asia and, erm South America...

Fin 24 18/01/11, The Times 22/01/11

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Woolworths  Oh, jolly good.

The Dapper One lifted turnover to the tune of 9.8% for the 26 weeks to December last year, on the back of a strong performance in the clothing division, where they are furiously punting posh Aussie brands Country Road and Trenery, and where sales grew 11.5%. How have they done it? Salary increases at the upper end apparently, and a generally buoyant environment towards the end of the year, when retails sales lifted surprisingly – see our Trade Environment section below. Interestingly, the Country Road division in Aus was a drag on results rather than otherwise, with one analyst remarking kindly that Aus as a retail environment remained tough as a drover’s trouser seat.
Comment: And there we were thinking a trenery was the shovel strapped by a swagman onto his tucker bag...

Business Day 21/01/11

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Massmart  Beaten, but not bashed

The Men in Black have bested SACCAWU at a special shareholders’ meeting last week where the union was unable to secure a single vote against the acquisition of part of the business by ... what? You didn’t know? Bleeding heck. SACCAWU and its internationalist allies in UNI and UFCW seem unable to turn their opposition for the deal into meaningful action, with protests being called off, and apparently lukewarm support at best from Massmart staff. With the buy in from shareholders, that’s another major hurdle down for the deal.
Comment: Then it’s a quick whisk through the Competition Commission, and we’re home free.

Finweek 27/01/11

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Tiger Brands  Good lord Stanley – the blighter’s got stripes!

Tiger Brands’ strategy for Africa is based on a rollout into 16 key sub-Saharan markets, or “priority zones”. Expansion on the continent is critical for The Striped One, as it has pretty much shot its bolt in many of the major categories back home, with All Gold owning 74% of the tomato sauce sector and other brands claiming major chunks elsewhere – jams at 62%, canned veggies at 60% and pasta at 45%. Hence the acquisition in the year 8 of a stake in Tanzania’s Haco Industries and the small but strategic acquisition of a majority stake in Cameroon’s Chococam.
Comment: The strategy is well timed, as Shoprite entrenches its position and Walmart rolls out into deepest darkest. Both will be looking for reputable brands to fill the shelves.

Financial Mail 21/01/11

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SABMiller  Shouting lager, lager, lager!

Lager volumes are up 3% internationally in the quarter to December 2010 for SABMiller, a London-based manufacturer of malted liquor and soft drinks. This pleasing result was more than willingly assisted by our own great continent, where volumes were up 12%, and a similar amount in Asia, although sales were slower elsewhere. In the US, for eg., tardy punters consumed 2.5% less of the amber liquids served up my MillerCoors than they did in the perhaps darker days of ’09. Here at home, despite the fact that industrially-brewed beer is a pillar of the culture, volumes were up only 3%. Revenue grew 6% internationally for the quarter, with group revenue per hectolitre at 3%. Good savings were apparently to be had on raw materials during the period.
Comment: Well cheers eh.

I-Net Bridge 18/01/11

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Retail Sales  Meanwhile down at the birdsellers’ market...

The pleasant surprise last week was that retail sales were up 7.8%, according to the hoary beard-tuggers over at StatsSA. The highest annual real growth rate was recorded for retailers in household furniture, appliances and equipment’ (19,8%), followed by ‘retailers in pharmaceutical and medical goods, cosmetics and toiletries’ (12,7%), and ‘retailers in textiles, clothing, footwear and leather goods’ (12,0%), while general dealers were up 5.5%. But what is this? Retailers of food, beverages and tobacco in specialised stores saw sales decline by 0.6% year-on-year, which to us suggests a problem of definitions rather than a crisis in this great industry we call home.
Comment: Some goodish numbers for December should be on the way, then, a prediction supported at least anecdotally by the retailers. But General Dealers, StatsSA? What next – horse traders and ironmongers?

Tatler Reporter 27/01/11

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Woolworths  No truth in the rumour. No rumour, even...

Oh what the heck, seeing as irresponsible transactionary speculation is rife in these uncertain times, let’s indulge in a little ourselves. Is there any significance in the appointment of ex Marks and Sparks boss Stuart Rose as a non-exec on the Woolies board? Apart, obviously, from the close philosophical and family alignment between those two great businesses.

Bloomberg 25/01/11

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Unilever  The Life Aquatic

Le Grand Bleu, with its passion for cleaner, healthier punters, will be launching its water purifier, Pureit, in emerging markets in Asia, Eastern and Central Europe where traditionally they have purified water with white spirits distilled from members of the tuber family, and of course, here. If the mines won’t do it for us, perhaps Unilever will.

Business Report 24/01/11

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Pick n Pay  Increasing share of basket case?

Thwarted in its sale of Franklin’s Aus, Pick n Pay appears to be similarly stymied in Zim, where the government is blocking its purchase of another 24% of TM Supermarkets, in which it currently holds a 25% stake. This under the indigenisation law requiring foreign and white-owned firms to relinquish control to black Zimbabweans.

Bizcommunity 20/01/11

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Tesco  Big shoes

Sir Terry Leahy is retiring from the helm of the UK’s top grocery business in March – a development which when announced in June last year knocked 750 million quid off Tesco’s market value in a single day. Typically, however, Sir T’s succession planning has been impeccable, and he will be replaced by head of international operations Philip Clarke.

The Sunday Times (London) 26/12/10

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