Star 2022-08-26

THE NATIONAL Treasury should raise the taxes in South Africa, including VAT, in order to reduce the government Budget deficit, finance infrastructure investments and the growing social security spending. This is the view of the Organisation for Economic Co-operation and Development (OECD), which has just completed its 2022 Economic Survey of South Africa. The OECD survey found that South Africa enacted impactful policy measures and concrete recovery strategies in response to the Covid-19 pandemic. However, it noted that economic challenges and social disparities still remained. OECD acting chief economist Alvaro Santos Pereira yesterday said boosting job creation and strengthening the redistributive role of the tax and benefit system were key priorities for South Africa. Pereira said South Africa would need to create more fiscal space to deal with potential future…

DISTELL, Africa’s biggest drinks and beverages group, massively increased its spending on administration and capital expenditure in what is likely to be its final full financial year before being taken over by Dutch brewer Heineken International. Its administration costs increased by a whopping R696.1 million to R2 billion in the year to June 30, 2022, this at a time when most listed companies are trying to contain costs as best they can in the high input cost and inflationary environment. Distell, in its published results, attributed these sharply higher costs to an increase in the short-term incentive bonus provision for employees, increased investment in digital transformation initiatives and merger and acquisition costs related to the Heineken transaction. In the year, headline earnings and headline earnings per share increased…

SOUTH Africa’s producer prices in July tracked consumer prices and rose to a fresh peak, mainly driven by petroleum and chemical products, food and beverages as well as metals and machinery. This means that consumers will continue paying higher prices for goods and producers pass on the input costs to the end-users amid elevated headline inflation, which reached 7.8 percent in July. Data from Statistics South Africa (StatsSA) yesterday showed that the annual producer price inflation (PPI) at the factory gate reached a fresh record high of 18 percent in July, up from another record of 16.2 percent in June. This latest PPI print crept closer to the all-time high reached during the 2008 global financial crisis and was above market forecasts of 17.3 to 17.6…

The search and seizure operations are being conducted as part of an ongoing investigation The South African insurance industry was caught by surprise yesterday as the Competition Commission raided the premises of eight major long-term insurance companies as part of a probe on alleged price fixing and collusion. Shares of JSE-listed firms involved in the probe all fell. If the firms are found guilty of price fixing they can be fined 10 percent of their revenue. The commission said yesterday it was conducting search and seizure operations at the premises of eight insurance companies – BrightRock Life; Discovery; FMI, a division of Bidvest Life; Hollard Insurance Group; Momentum, a division of Momentum Metropolitan Holdings (MMI); Old Mutual Insure; Professional Provident Society (PPS) and Sanlam – operating in Gauteng, Kwa-…

ITALTILE will focus on factors under its control and mitigate risks as much as it can so that it can trade through the choppy macroeconomic and operational environment outlook for 2023, chief executive Lance Foxcroft said yesterday. The bathware, tiles and other home finishing products group yesterday released results for the year to June 30, where it did well to increase headline earnings a share to 152.1 cents from 140.1c, off the back of a very high earnings base in 2021 when home improvement boomed through the pandemic. The dividend increased to 61c from 56c. Foxcroft said in a telephone interview yesterday that the outlook for discretionary consumer spending was cloudy because of the uncertain inflation and interest rate outlook. He said consumer spending had shifted from home improvement…

BLUE LABEL Telecoms, a JSE-listed firm which specialises in selling prepaid airtime, electricity and ticketing, yesterday posted robust annual results with strong gross profit margin growth. Brett Levy, who is a joint chief executive, said: “The next few years look really good for Blue Label. We’ve come out of Covid strong after two great years.” For the year ended May 31, 2022, the group, which is in the process of recapitalising Cell C, said headline earnings per share rose from 86 cents a year ago to R1.17. Earnings before interest, tax, depreciation and amortisation was up by 25 percent. On inclusion of the gross amount generated on PINless topups, prepaid electricity, ticketing and gaming, the effective increase in revenue equated to 10 percent from R66…