Compounding the industry strike, a consistently strong rand saw the manufacturing division struggling to compete against imports.

Branded consumer durables group Nu-World Holdings has reported big drops in income and earnings in the year ended August 31, amid what the company said was consumers’ conservative spending in the second half of the financial year.

Nu-World said yesterday that trading conditions were extremely difficult. “Consumer confidence plunged in the second and third quarters of this year, suggesting that the spending that drove the post-recession recovery has lost most of its momentum.

“The FNB-BER consumer confidence index dropped by seven index points, from the second quarter of this year to the third quarter, resulting in a two-year low,” the company said.

Nu-World’s profit after tax from continuing operations fell by 52,2% to R34,7m, while revenue was down 5,4% to R1,6bn. Headline earnings per share fell 71,1% to 93,7c per share.

Nu-World has blamed adverse trading conditions for the closure of its local manufacturing business. It said the manufacturing business had taken a knock from, among others, the National Union of Metal Workers of SA.

“Compounding the industry strike, the rand remained consistently strong during the financial year under review, resulting in our local manufacturing division struggling to compete against cheaper imports,” it said.

“These factors, coupled with the burdensome and ongoing electricity price increases and increasing fuel costs, have led to the increasingly uncompetitive position of our manufacturing division, necessitating its closure.” The closure would be completed before the end of the year.

Source: www.fastmoving.co.za