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SIMON MUNDY
Contributing Writer
AH-Vest, the AltX-listed condiment maker formerly known as All Joy, was still embroiled in a dispute with the Financial Services Board (FSB) over irregularities in its 2005 financial results, CEO Marci Pather said yesterday.
The FSB fined AH-Vest R1,5m last September for deceiving shareholders. This followed a declaration by auditors in 2005 that journal entries adding up to R830000 “could not be verified or explained”. The FSB said it believed Mr Pather had given instructions to interfere with the entries, which allowed the company to overstate its financial results, but the company immediately vowed to appeal.
Mr Pather said yesterday that the company had appointed senior counsel to manage the process for it, but was still “waiting for a definitive answer on the matter”. He was unwilling to explain how the erroneous entries had been made.
But he accused the FSB of being “an internalised organisation that works on rules of their own”. He was unsure how soon the result of the appeal would be known.
Meanwhile, AH-Vest was looking to move beyond providing pasta sauces and begin selling products used in Asian cuisine.
Speaking by telephone from Thailand, where he was investigating possible new product ranges, Mr Pather said the company now deemed it prudent to move “outside the Italian category”.
“Asian cuisine represents a range of products that hasn’t yet grown significantly in SA. One of my ambitions is to see whether we can do the same thing there that we’ve done with Italian cuisine.”
AH-Vest enjoyed strong revenue growth in the year to March, helped by a focus on its higher-end ranges that helped to cancel out an expected decrease in volume. Turnover of R77,5m represented a 16,45% rise compared with annualised results for the prior period.
While using its “critical mass” in the market to promote its higher margin premium ranges, the company had done away with some less profitable lines.
“We culled about 25 lines — there was a range of products targeted to the kids’ market that we took out because it wasn’t meeting the cut in terms of units sold. We also looked at our position on certain of the brands that were linked to the lower-end products,” Mr Pather said.
While it was seeing particularly strong growth in its ranges targeted at higher-income groups, the company had benefited from the economic downturn, as cost- conscious shoppers favoured its brands over more expensive lines.
“I started this business in 1987 because sauces and condiments were out of reach to the average consumer. The reason we grew so well in the period is that people were looking for a better deal.”
AH-Vest’s net earnings of R1,15m marked a return to profitability after several years of losses, and followed a deficit of R3,41m in the nine months to last March.
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