Nu-World under pressure

Nu-World Holdings reported a strong performance for the first half of its 2025 financial year, as the company managed to increase sales both locally and globally.

However, its margins came under severe pressure, which the company attributed to a competitive trading environment, higher operating costs and unreasonably high freight rates.

Nu-World Holdings is a South African holding company that imports, assembles, markets, and distributes branded consumer goods, such as small and large appliances, furniture, consumer electronics, liquor, and power generation.

It began manufacturing electrical wiring accessories in South Africa as early as 1946 and has expanded in the last 70 years to become a worldwide player in consumer goods.

The company has operations and major subsidiaries in South Africa, China, Lesotho, Australia, the United Arab Emirates and Brazil.

Some of Nu-World’s brands include Aiwa, Conti, Goldair, Nu-Tec, Ultimum, Telefunken and Sunbeam.

On Thursday, 10 April, the company released its results for the six months through February 2025.

These results revealed a strong performance, with revenue up 28.8% to R1.25 billion due to sales growth both locally and globally.

Despite this impressive revenue growth, the company reported a net operating income of R63.95 million, while its net income for the half-year was R39.45 million.

Nu-World’s basic earnings per share increased by 19.6% to 176.1 cents per share, and its net asset value grew by 4.1% to R7.56 million.

The company explained that while it managed to increase its sales, margins came under pressure internationally.

It attributed this to “the competitive environment we trade in, as well as higher operating cost levels, plus unreasonably high freight rates”.

The company’s performance in South Africa was strong, with sales up 20.9% in the six-month period.

It described the trading environment in this period as “buoyant”, with the first quarter of 2025 showing the strongest growth at 30%. 

Although the second quarter was not as strong, the company’s products – both premium brands and best-value brands – remain in good demand. 

“Confidence levels improved, allowing consumers to increase their discretionary spend,” the company explained.

It specifically highlighted the two-pot retirement system as a driving force that had a positive effect on consumer spending.

Internationally, Nu-World’s sales boomed, with its offshore operations seeing a 46% increase in revenue.

The company said this was primarily due to an increase in sales in its Australian operations.

However, it said its overall offshore operations’ gross margins and profitability came under pressure due to higher operating costs and expenditures.

The company did not declare an interim dividend for the six months ended 28 February 2025.