Ellies Holdings, an importer and distributor of LED lighting, electronic and solar solutions, reported a loss of over R85 million in its 2023 financial year, more than its entire market value of R56 million.
- The loss widened by 95% due to restructuring costs of R18 million and a shortage of working capital that limited its ability to capitalize on increased demand during load shedding.
- Ellies has diversified away from its traditional satellite business but incurred R18 million in restructuring costs in the process.
- It has constrained working capital and was unable to leverage scale for better pricing and inventory, limiting its ability to benefit from higher load shedding demand.
- The company has net debt of around R183 million, almost 4 times its equity, but considers itself a going concern and expects a return to profitability.
- Ellies is also looking to raise R120 million from shareholders to acquire Bundu Power, a company specializing in generators, solar and other products.
- Bundu Power had revenue growth of over 60% and profit growth of almost 300% in its 2023 financial year, and the acquisition is part of Ellies’ strategy to expand its alternative power footprint.