FIFI PETERS: Today CA Sales grew to become the 313th firm listed on the Johannesburg Stock Exchange’s foremost board. It is an organization that operates in the fast-moving shopper items [FMCG]section and gives various companies for its purchasers together with warehousing, distribution, advertising and promoting. Its purchasers are literally widespread throughout the continent in fairly various international locations.
We have Duncan Lewis, the CEO of CA Sales on the Market Update for extra. Duncan, I suppose congratulations are to ensure that your debut on the JSE. How would you describe the first day of commerce and the market’s reception of your organization?
DUNCAN LEWIS: Good night, ma’am. Thank you very a lot. I’ve been behind closed doorways so am actually unsure what the market did in the present day. Mid-afternoon I bought the thumbs-up from a colleague. I’m assuming that we had been nicely obtained, so I simply hope that can proceed.
FIFI PETERS: Some of the communication that you simply despatched out earlier than coming to market was the expectation of how the market would worth you. We learn studies that you simply had been hoping for a valuation of round R2.2 billion by way of your market valuation. I’m questioning in case you had been capable of obtain that in in the present day’s session – or [perhaps] you don’t know as a result of, as you stated, you’ve been behind closed doorways.
DUNCAN LEWIS: Yes. I referred to the colleague earlier on and in the present day it actually ended up one thing north of R2.2 billion. What the ultimate quantity is I’m unsure simply but.
FIFI PETERS: All proper. You had been on the Cape Town Stock Exchange, nonetheless, earlier than that. Why the resolution to maneuver to the JSE?
DUNCAN LEWIS: We had a twin itemizing. We had been first listed on the Botswana Stock Exchange, which we did in 2017. We had the secondary itemizing on the Cape Town Stock Exchange. It was at all times our ambition to record on the Johannesburg Stock Exchange however frankly we had been too small. Now we’ve the scale and the measurement to record and fortuitously that’s come to fruition.
FIFI PETERS: Give us an image of CA Sales – simply by way of your possession construction previous to itemizing, your main advertising investments agency, in addition to your self. Talk to us about how this itemizing modifications the possession construction proper now. [Sound break]
DUNCAN LEWIS: I hope I’ve bought the gist of it, since you went silent for about 10 seconds. So my apologies. If it was round the possession construction, presently we’ve PSG Alpha, a part of the PSG secure, proudly owning about 48% of the shares, and the relaxation are round institutional traders in addition to administration.
FIFI PETERS: As you stated, you had been listed in Botswana earlier than, and also you’ve been in enterprise for a very long time. You’re nonetheless listed in Botswana. But what are your plans now that you’re on the JSE’s foremost board?
DUNCAN LEWIS: Firstly sure, we had been included in 2011, however a few of our companies return 4 and 5 many years, some again to the early seventies. But we’re primarily a South African enterprise. Our focus for geographical enlargement can be towards East Africa. We are in Zambia and our intention is simply increasing to different markets in East Africa, but in addition in our current markets to broaden with further companies and extra channels.
FIFI PETERS: What is the enterprise case that’s driving your enlargement? You appear fairly optimistic about the alternatives that lie forward in the remainder of the continent, and I suppose we’re simply looking for out what these are.
DUNCAN LEWIS: Yes. I believe that our enterprise mannequin lends itself to Africa and creating markets. If you have a look at the macro stuff, in case you take Africa’s inhabitants going from a billion to two-and-a-half billion by 2050, you consider fast, fast urbanisation – and fast urbanisation is commonly a catalyst for formal retail. Our enterprise mannequin lends itself to that.
And then, albeit off a low base, we’ve a rising center class in the area. Our enterprise is round branded shopper items, and I believe these issues bode nicely for us. Yes, it’s not with out its challenges however I believe by and huge we’re nicely positioned.
FIFI PETERS: And how will this enlargement be funded?
DUNCAN LEWIS: I believe, in case you listened, we stated we’re going to attempt to be a R20 billion enterprise by 2026 – that’s actually the dream and it’s formidable. We can actually fund the development in the quick to medium time period internally. We do have additional enlargement plans – whether or not it’s different companies, different geographies – and if want be we are able to increase capital on the markets.
FIFI PETERS: And when will you understand the place the want [is]. What level, what sort of state of affairs must be introduced to you so that you can know that it’s the proper time to look to the market and look to your shareholders to lift capital?
DUNCAN LEWIS: We are involved about the price of cash. We are conservative by nature and by and huge our technique is a client-led enlargement technique – whether or not it’s new markets or new companies. And if an acquisition comes alongside that we predict is complementary to our current enterprise, that’ll be the time to resolve how and the place we increase capital if crucial.
FIFI PETERS: Can I ask who a few of your purchasers are? I used to be taking a look at your web site and it talks about some blue-chip purchasers, actually necessary folks in the FMCG sector. I didn’t actually get [all the] names. I used to be simply intrigued as to who a few of your prospects are.
DUNCAN LEWIS: As you understand, we function in a shopper bundle, a great house. Our purchasers specialize in residence care, private care, snacking, treating and meals. The purchasers regionally can be the likes of Tiger Brands, for instance, Pioneer Foods, Premier Brands. But additionally we do world companies, for instance Colgate Palmolive, Kimberly Clark, Pfizer, Beiersdorf – who’re model homeowners of Nivea – we do Reckitt Benckiser, British American Tobacco, Coca-Cola, Diageo, AB InBev. So we’re very privileged to signify these model homeowners.
FIFI PETERS: Really blue chip. They’re actually massive names, native and world names that you simply’ve talked about.
But Duncan, you talked about your issues round the price of cash proper now, and also you’re speaking about rates of interest which are going up – and are going up as a result of inflation is actually excessive in most components of the world. I’d like to grasp how you’re coping with the pressures of inflation of prices, notably being a participant that’s chargeable for shifting items round the continent the place we all know that’s not at all times the best factor to do as a result of the roads usually are not at all times in the finest situations, and different supporting infrastructure isn’t essentially as much as scratch.
DUNCAN LEWIS: Obviously we’re involved about inflation – the way it impacts buyers and shoppers. But I believe what are we doing to mitigate that [is] we focus on, to begin with, capability-building and a big a part of that capability-building train is round the funding in know-how. That is round ensuring that we’re mining efficiencies in order that we’re decreasing the fats in the enterprise, mining the large areas. And we’ve a number of initiatives in place round useful resource to distinguished……8:20 fashions round ensuring that we’re extra environment friendly tomorrow than in the present day. So only a steady journey.
Our emphasis is round capability-building know-how folks to make it possible for we mine the effectiveness and the efficiencies.
FIFI PETERS: Just lastly, what may your development imply for jobs in South Africa and maybe in the different markets by which you use, simply provided that we all know in most components of South Africa in addition to the remainder of the continent it’s fairly a sore problem proper now?
DUNCAN LEWIS: Absolutely. I believe the newest numbers of unemployment in South Africa are north of 45%, which is massively regarding. But we make use of over 12 000 folks in the eight international locations the place we function and it stands to motive if we’re capable of develop our high line in a sustainable and worthwhile approach naturally we [will be] using extra folks. And so I believe that our story is an effective one so far as future employment is worried. Our job is to ensure we simply do the proper issues and, if we do the proper issues, it’ll manifest in the proper outcomes and the good thing about that’s using extra folks in these areas.
FIFI PETERS: All proper, Duncan, thanks very a lot to your time and your persistence with us. We are actually trying ahead to monitoring your development and fascinating you alongside that journey. That was Duncan Lewis, the CEO of CA Sales, the newest member on the Johannesburg Stock Exchange foremost board in the present day.