Diversified electronics, electrical and technology group Reunert has hiked its interim gross cash dividend by 7,6% to R1,13/share after reporting a year-on-year improvement in its results for the six months ended 31 March 2016.
The group, which owns businesses such as Nashua, ECN and CBI-Electric, said revenue from continuing operations increased by 2% to R4bn and operating profit rose by 12% to R564m, despite adverse macroeconomic conditions in South Africa and delays in the commencement of various national infrastructure projects.
“The improvement in the financial result is due to moderate growth in operations, a positive impact from exports, cost management and improved efficiencies,” Reunert said in notes accompanying the financial numbers.
Normalised headline earnings per share (Heps) for the group, from continuing operations, increased by 12% to R2,68. For all operations, normalised Heps rose by 3% to R2,71.
In the ICT division, which includes the Nashua businesses, segmental revenue from continuing operations decreased by 1% to R1,7bn. Operating profit increased by 2% to R250m driven by efficiency gains and cost controls.
“The rapid devaluation of the rand placed pressure on the office automation business, whose market continues to be characterised by strong competition resulting in ongoing margin pressure,” Reunert said.
The voice component of the ICT segment – mainly ECN – continued to grow its base while margins remained intact.
Quince, Reunert’s in-house finance company, reported positive first-half operating results, mainly due to the higher loan book of R2,1bn, a 4% increase on the prior period. “Despite the continued challenging economic conditions, there was no increase in credit losses,” it said.
In the electrical engineering division, cable operations saw an increase in demand for aluminium over copper, leading to lower revenue. Revenue was also impacted by a delay in the award of key projects. However, operating margins improved through continued manufacturing efficiencies, it said.
In applied electronics, revenue jumped by 64% to R696m, with operating profit of R122m, as a result of large-scale export sales assisted by the weaker exchange rate. Reunert’s communications and radar businesses delivered in line with expectations. — © 2016 NewsCentral Media
