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Reunert has 'exceptional` year

By Iain Scott, ITWeb group consulting editor
Johannesburg, 15 Nov 2005

Reunert released its year-end financial results this morning, showing a 46.3% increase in headline earnings per share (HEPS) from 277.5c to 406c.

"The past year has been exceptional for Reunert," says CEO Gerrit Pretorius, who attributes the HEPS increase to strong domestic economic growth and the share buyback in September 2004.

In the electrical engineering division, turnover grew 36% to R2 billion, with operating profit rising 49% to R324 million. All the companies in the division grew, with ATC finally achieving a modest profit.

The electronics division, which includes Nashua, Panasonic, Nashua Mobile and Siemens Telecommunications, grew turnover 4% to R6 billion, with operating profit up 9% at R714 million.

Reutech was the only struggling operation. However, Pretorius says although the operation`s prospects are uncertain, it is a small part of the business.

"It remains our aim to grow headline earnings per share at a rate higher than inflation in a sustainable way," says Pretorius. "However, it is unlikely that this year`s growth rate will be achieved in the coming financial year."

The group has declared a final dividend of 170c a share, bringing the total for the year to 222c (2004: 160c).

The group`s share was trading at R47.52 on the JSE by midmorning, up 17c or 0.4% on yesterday`s close, having touched R48.50 earlier in the morning.

Revenue for the year to end-September was up 12.6% from R6.25 billion to R7.04 billion, while earnings before interest, tax, depreciation and amortisation (EBITDA) rose 18.5% from R811.9 million to R661.8 million, reflecting an increase in EBITDA margin from 13% to 13.7%.

An operating profit of R905.5 million is 29.3% up on the R700.5 million of the previous year, while pre-tax profit rose 24.4% from R771.6 million to R959.6 million.

A 79% decrease in earnings attributable to outside shareholders, from R51 million to R10.5 million, helped the group to a 48.2% increase in attributable earnings from R478.4 million to R709.2 million.

Basic earnings per share rose from 251.9c to 409c.

The weighted average number of shares in issue during the period, which is the number used to calculate earnings and headline earnings per share, was 173.4 million, compared with a restated prior-year number of 189.9 million shares.

The restatement was the result of the early adoption of IFRS (international financial reporting standards).

Reunert`s balance sheet shows current assets of R2.65 billion (2004: R2.01 billion) at the end of the period, of which 784.4 million (R451.3 million) was cash. This compares with current liabilities of R2.4 billion (R2.02 billion).

However, cash generated from operations decreased from R1.62 billion to R361.1 million, the result of a R600.7 million increase in net working capital, a R499.7 million increase in RC&C Finance Company accounts receivable, and a R101 million increase in other working capital.

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