Secha Capital Impact Report - December 2020

Read our full Secha Capital 2020 Portfolio Growth and Impact Report here

Hello friends of Secha -

We hope that you have all made it through a tumultuous 2020.

At Secha and throughout the portfolio, we have been repeating the line, “calm seas never made good sailors.”

We are happy to report that the portfolio has come out the other side of the lockdown stronger than before. It required some pivoting of revenue channels and team focus, but,

across the portfolio, we have increased revenue and added jobs.

Our portfolio proved defensive and resilient because it feeds, cleanses and clothes South Africa. Local champions with robust supply chains will become even more important in

the New Normal and we are pleased with the performance around of investment themes of female hair and body care (nativechild, Hair City, WUKINA), healthy food (Stoffelberg

Biltong, RUSH Nutrition, Taste of Waterberg) and import substitution manufacturing (Geestep, Equalization).

Some highlights:

•Portfolio online sales increased 4x the last six months, compared to 2019 (primarily from Hair City [5x] and nativechild [7x], but also buoyed by Stoffelberg Biltong and RUSH

Nutrition, which had not previously focused on this channel)

•We de-risked the portfolio’s operating expenses the last six months by successfully qualifying for various COVID relief programs, most notably the Jobs Fund, which awarded the

portfolio a grant of an additional R1.8M

•Hair City had successfully exited two retail shops (and thus the leases) shortly before lockdown

•In parallel, we launched a new wig company, WUKINA, which is online-only

Some lowlights:

•Cash conversion cycles and working capital solutions continue to be a constraint on growth at, especially, Stoffelberg Biltong and Geestep. The lockdown increased demand for

meat and footwear to local retailers. Both companies added new customers (e.g. Food Lovers and Kibsons in the UAE for Stoffelberg and more customers under the Retailability

portfolio for Geestep). However, we have under-fulfilled orders due to the 90+ days it can take between buying supply inputs and getting paid by the customer. We speak to

mitigating solutions below