Our opinion on the current state of NUWORLD(NWL)NuWorld, a company established on the JSE since 1987, operates as an importer and exporter of consumer goods, focusing primarily on consumer electronics, appliances, and durables. The company's product lineup includes well-known brands like Telefunken and JVC, alongside a variety of items such as vacuum cleaners, fans, large and small appliances, cell phones, heaters, and liquor. Over the years, NuWorld has maintained a consistent track record of generating profits and distributing dividends, illustrating its stability in the industry.
Despite its long-standing presence and profitability, the share is relatively thinly traded, with several days often passing without any trading activity. This characteristic renders the stock less suitable for private investors who might seek more liquidity. In the latest financial results for the six-month period ending on 29th February 2024, NuWorld reported a slight decline in revenue by 2.8% and a decrease in headline earnings per share (HEPS) by 5%. However, it's not all downward trends for the company; the net asset value (NAV) saw a positive increase of 4.8% to 7258.3c per share.
The company highlighted several challenges affecting its local sales, including high interest rates, increased shipping costs, the devaluation of the South African Rand, load shedding, and rising fuel costs. However, it also noted a silver lining with its international sales, which demonstrated a 6.6% growth in turnover during the same period. This indicates that while NuWorld faces significant headwinds domestically, its international operations are contributing positively to the overall business.
Technically, the trading pattern of NuWorld shares reflects the company's low liquidity, with the share price having declined since March 2022. Nonetheless, there are indications of a potential recovery, suggesting that despite the current challenges, there may be opportunities for the stock to regain some ground. Investors interested in NuWorld would need to consider the low trading volume and potential for sporadic price movements, balanced against the company's long-standing history of profitability and resilience in a fluctuating market.
