Pivoting is a favourite tactic of start-ups that realise their original business plan is dead in the water. They surprise their original funders by switching from supplying online baby food to specialising in adult incontinence pants before anyone can say: "That’s not what I thought I was investing in." This appears to be a badge of honour in Silicon Valley, where you’re often not a success until you’ve had a few failures and a raft of disappointed investors behind you.
Labat Africa is in the middle of a mighty pivot, hoping to establish itself as a major player in the national cannabis industry.
It seems that a government that can’t even keep the lights on has managed to produce a "national cannabis master plan", which has been presented to SA’s major economic stakeholders. According to Labat Africa, the illegal dagga industry is worth R28bn, and finance minister Tito Mboweni has his eye on it, stating that cannabis should be a "legal, taxable product that generates money for the fiscus, creates jobs and brings illegal farmers into the economic mainstream".
Labat is clearly hoping for high times ahead. But for the moment things are a little challenging, with a loss of R16.4m after the exit from its catastrophic fuel business. The company has had a pretty chequered history, dabbling in this and that without any recognisable focus, so perhaps the pivot to pharmaceutically approved weed will finally provide a viable way forward. At least the company should be able to provide a bit of its most punchy product at the AGM to calm the nerves of any dubious investors.
Volkswagen: The wheels keep rolling
Volkswagen has an interesting history, starting in the 1930s when Adolf Hitler decided that Germany needed a basic vehicle that could take two adults and three children at a speed of 100km/h to take advantage of the autobahns that he was sticking all around the country.
Ferdinand Porsche headed the design team, which came up with the iconic shape of the Beetle, one of the first cars designed with the use of a wind tunnel, and a shape still recognisable today.
The company has come through a few issues since then, but it’s now the world’s second-largest carmaker by volume, and it’s pouring out the cash on the back of a major recovery in car sales.
It is estimating €11bn in operating profits for the first half of the year, despite a slump in sales in China, its biggest market, and limp sales figures for its electric vehicles.
What keeps it going, however, is advice from the likes of Jeremy Clarkson that if you want to buy a little car that works, you look at everything else, then buy a Golf.
Volkswagen is expecting an issue from the global shortage of semiconductors, but as a result it has pushed forward the production of higher-margin premium models, and it is also benefiting from the rise in demand for used cars, which has helped its financial services arm.
The strongest growth was in its truck brands, MAN and Scania, which saw sales up 68% and 61% respectively as delivery became one of the strongest themes of the pandemic.