Taste Holdings swallowed some jewellery and interim results published on Wednesday revealed a bad case of indigestion.
But CEO Carlo Gonzaga has Rennies on hand – and no regrets about moving from food into jewellery, which is now the biggest arm of the group.
The top lines of the income statement raise hopes with revenue up 170% to R85.8m, Ebitda up 54% to R11.7m and operating profit up 35% to R9m.
A group that has shunned debt in the past was set back heavily by interest costs of R3.5m (R600 000). As a result, headline earnings were down, as warned in the trading statement, by 43%. Until now Taste has been so set on growing (without debt) that it has not paid dividends.
Gonzaga says the no-dividend policy is not about to change, till debt on the Natal Wholesale Jewellers (NWJ) purchase is reduced and trading normalises.
New acquisition NWJ traditionally makes 70% of its money in the second half. Gonzaga says a lot of time, money and effort has gone into revamping NWJ, which should soar as soon as consumer sentiment lifts.