Amalgamated Appliances (Amap) - Q2 2013

SWOT Analysis


  • Large distributor of international and local brands.

  • Manufactures own devices.


  • Small manufacturing outfit has lower economies of scale to compete with major multinationals

  • Expansion through acquisitions is costly.


  • Growing demand for electronic devices in the South African market.

  • Good location for regional expansion - strong opportunities to place its brand in neighbouring markets as PC ownership takes off.


  • Attractiveness of South Africa's market and neighbouring markets has brought major international rivals to the region.

  • Low incomes and reach of internet infrastructure in rural South Africa and in neighbouring markets limits the potential for growth in the short term

Company Overview

Amalgamated Appliance Holdings Limited (Amap) is a South African incorporated group specialising in importing, manufacturing and distributing branded household electrical and electronic durables. Amap shares are traded on the Johannesburg Stock Exchange.


Following a sharp contraction in 2008/09, the group had initiated a change in business model resulting in substantial staff retrenchments and much reduced inventories. Amap said it continued to gain market in key product categories and highlighted margin improvements, despite the revenue decline.

Amap views itself as a sales and marketing company. Strategy is focused on sales and marketing activity surrounding its key brands. One major decision was to centralise all support services across the group to increase operational efficiencies. The company also launched a restructuring of management and sales incentives and a campaign to reduce fixed overheads, including staff reductions. The company also decided to wind down its mobile phone business and discontinue distribution of the Pioneer and Toshiba brands to focus on core strengths.

Company Structure

Amap has what the company describes as a matrix structure, with two core sales and marketing divisions - appliances and electronics - which are supported by a mix of dedicated and shared resources and activities, including sourcing, manufacturing, logistics, repair service, administration and finance. The company sees itself as a sales and marketing organisation. However, manufacturing is an integral part of the group and has its own management structure.

Amap previously had 1,220 staff employed at several locations across South Africa, including a head office, two factories, two distribution centres, a service centre and several sales and support offices. However, in 2008 the company announced a target of reducing head count to 765. The company has two factories, with one facility at Atlantis, Western Cape, producing TV sets and related electronics products, and another in Pinetown, KwaZulu-Natal, producing small domestic household appliances. The sale of the Atlantis property for ZAR34.5mn was completed in October 2012.

In December 2012, the Bidvest Group Limited acquired 27.57% shares in the company. The investor made an offer for the remaining shares in Amap in March 2013for ZAR3.5 per share. Amap declared a gross special dividend of ZAR0.3 per share if the Bidvest offer is accepted.

Recent Financial Performance

In the financial year ended June 30 2012 Amap reported revenues of ZAR996mn, up 20.5% y-o-y. The company has not indicated which areas of the business grew fastest, but continued to note difficult trading conditions and slower consumer spending. Amap announced it is planning to generate 10% of its revenues from countries in Sub-Saharan Africa by June 2014, stating it had a strong foothold outside its home market. Profit before tax was ZAR 119mn, up 53.9%.


Amap's key consumer brown goods and professional sound equipment brands include Sansui, Teledex, Behringer and Stanton. The company's other brands include Russell Hobbs, Brother, Salton, Hoover, HAZ, Remington and Wiltshire.

The group also distributes small domestic appliances under a number of brand names.

Amap reorganised its brands into Good, Better and Best, compared with previous divisions its brands into Silver, Gold and Premium status.

Among its own brands, Sansui ranks as best level and Teledex as better.

Financial Data

  • Revenues (Year Ended June 2010): ZAR759mn

  • Revenues (Six Months Ended December 2010): ZAR451mn

  • Revenues (Year Ended June 2011): ZAR826mn

  • Revenues (Six Months Ended December 2011): ZAR526mn

  • Revenues (Year Ended June 2012): ZAR996mn

  • Profit (Year Ended June 2010): ZAR38mn

  • Profit (Six Months Ended December 2010): ZAR25mn

  • Profit (Year Ended June 2011): ZAR57mn

  • Profit (Six Months Ended December 2011): ZAR37mn

  • Profit (Year Ended June 2012): ZAR85mn

Company Details

  • Amalgamated Appliance Holdings Ltd

  • 29 Heronmere Road

    Reuven 2091

    PO Box 39186

    Booysens 2016

    South Africa

  • Tel: +27/011 490 9000

  • Fax: 011 490 9115



This article is tagged to:
Sector: Consumer Electronics
Geography: South Africa, South Africa

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