Shares in Ellies Holdings fell yesterday after it said the company would enter into a formal consultation process regarding the restructuring of certain operational functions and begin retrenchments due to tough trading conditions.
The shares of the the electrical products group fell to a low of 12 cents, closing later 11.76 percent down at 15c.
“This is pursuant to ongoing constrained trading conditions being experienced by the group,” it said.
“As part of the S189 process, the company and affected stakeholders will together consider appropriate measures to minimise possible retrenchments, and seek viable alternatives which will assist the group in returning to profitability and ensure the continued operation of Ellies.”
Section 189A (S189 process) of the Labour Relations Act permits employers to dismiss employees for operational requirements.
Ellies said it was committed to following the legislative processes to ensure that all affected employees were treated fairly.
Ellies last month said it would launch an “ambitious turnaround” plan over the next 18 months to move into new areas such as tendering for public sector alternative energy and solar opportunities, and broaden its alternative energy product offering.
This was according to chairperson Timothy Fearnhead and the chief executive Dr Shaun Prithivirajh, who were commenting after the electrical products group reported that comprehensive income had slid by 243.4 percent to a loss of R43.6 million in the year to June 30, compared with a R30.4m profit in the 2021 financial year.
BUSINESS REPORT