Western Cape Business News

Send  Share  RSS  Twitter  19 May 2009

MANUFACTURING: Toys A Little Joy At Seardel


Recent Western Cape Business News

THERE’s been little joy at beleaguered industrial conglomerate Seardel with recent proposals to close down certain Frame textile divisions and the shutting down of the Scripto stationery operations.

But there is a bright spot amidst the gloom with Seardel’s Epping-based toy manufacturing and distribution subsidiary, Prima Toys, bucking tighter trading trends.

In the half-year to end December Prima managed a 7% hike in turnover to R175 million and managed to push up operating profits 9% to R18.5 million.

Seardel acting CEO Stuart Queen says Prima – which markets a wide array of toys and games – increased its market share.

Prima is now by far the most dominant toy, game and branded stationery distributor in the SA market.”

Queen says Prima will be concentrating on securing its growing market penetration and product range into 2009.

New and exciting brands and characters, as well as some lower price-point product, will be on offer to help mitigate the impact of the current economic conditions.”

Prima Toys’ performance should perhaps not be that surprising after research group Euromonitor recently found that there is remarkable resilience in consumption patterns in the SA market for toys and games.

Euromonitor found that traditional structure of the SA toys and games market has been affected by the trend towards ‘age compression’.

This means children are leaving behind traditional types of play at an earlier age.

This impacts on sales of children’s toys and games as they begin to demand items such as mobile phones, DVD players, CD players, mp3 devices and other electronic products instead of building blocks, toy soldiers or dinky cars.

Euromonitor notes a tremendous increase in the interest rate and an increased demand for video games, resulting in an upward trend in sales.

With Prima Toys fairly reliant on imports the recent strengthening of the rand should aid the building of trading margins, especially on some of those big ticket items like video games that require extensive marketing spend.

And goodness knows Seardel needs a strong profit performer at this critical juncture…

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