South African investment firm Long4Life on Wednesday suspended its dividend after spending on share repurchases and posted forecast-beating annual sales, sending its shares up nearly 5%.
Long4Life, which invests in the leisure and lifestyle sectors and which reported its first twelve-month period results since listing in 2017, said sales stood at R3.6 billion, topping the average analyst estimate of R3.3 billion, according to Refinitiv I/B/E/S.
Sales of drinks and demand for beauty treatments increased substantially in the summer months, it said, while sport and recreation retail stores did well over the holiday and Christmas periods.
At 1052 GMT, shares in Long4Life were 4.03% firmer at R4.90.
Long4Life said it had no formal dividend policy at this stage.
“It’s very difficult to make a forecast in the dividend if we don’t really know what the investment profile is going to look like in the period ahead,” Chief Executive Officer, Brian Joffe said while presenting the results.
The board also considered the R159.6 million ($11.23 million) spent on share repurchases.
Hoping to boost its range of beauty products under its Sorbet business, the firm will be launching Sorbet SK-N, a high-end skin and aesthetic treatment offering, with the first store scheduled to open in May in Johannesburg.
“With the changing demographics of people’s ages, more and more people are looking to improve their wellbeing,” Joffe said.
“This is a very interesting space (personal care and wellness)…and we’re working hard in developing a lot of opportunities.”
Since listing, investors had expected the company to go on an aggressive buying spree, betting on Joffe, one of South Africa’s most respected dealmakers who founded the conglomerate Bidvest Group in 1988.
But available deals have not met the group’s valuation criteria.
“The group has reviewed several investment opportunities in the past year, however, sellers’ expectations and asset valuations have not reflected the difficult economic climate and in many instances have not met the group’s valuation criteria,” it said.
Nonetheless, it remains optimistic on investment opportunities materialising in the forthcoming year, it added