Control Instruments has reported a return to positive headline earnings in the first half of its current financial year.
MD Richard Friedman says the group`s focus on supplying specialised hardware and software products to the automotive industry is creating good opportunities.
<B>Salient figures</B>
Control Instruments results for the six months to 30 June 2002
Figures for the year earlier period in parentheses, move in square brackets:
Revenue: R153.87m (R132.95m) [+15.7%]
Gross profit: R52.34m (R44.64m) [+17.2%]
EBITDA: R11.32m (-R2.36m) [+579.8%]
Amortisation: R2.04m (R1.72m)
Profit before tax: R7.38m (R1.44m) [+413.1%]
Net profit from ordinary activities: R5.94m (R1.44m) [+313.1%]
Headline earnings: R6.4m (-R5.26m) [+221.6%]
HEPS: 7.23c (-5.95c) [+221.6%]
Dividend per share: 1c (--)
Cash generated from operations: R7.95m (R1.13m)
Current assets: R107.35m (R112.58m)
Cash and equivalents: R23.97m (R10.97m)
Current liabilities: R90.58m (R74.98m)
NAV per share: 88c (94c)
The opportunities arise out of SA`s Motor Industry Development Programme and the stated intention of the world`s motor manufacturers to increase their vehicle and component supplies out of SA; the increased use of electronic systems in motor vehicles; and the increased integration of electronic hardware and software solutions in vehicle and fleet management applications.
During the period the group continued to invest in the expansion of its manufacturing facilities, and Friedman says further investments are planned for the remainder of the year.
It acquired the Audio Navigation business from Siemens VDO and integrated it with minimum disruption. The group also disposed of several non-core assets, including the interests in Rhomberg Electronics and SAN People.
Friedman says operating expenses were tightly controlled and decreased by 3.8%, despite a significant increase in the level of business.
"The group`s balance sheet remains sound. A relatively small amount of cash (R4.79 million was absorbed during the period as a result of the investment in plant and equipment, the increased working capital requirements resulting from the increased sales, the cost of acquiring the assets and stock of the Audio Navigation business, and the cost of funding SAN People`s losses prior to its sale."
He says the operations are strategically well positioned to benefit from the increased demand for electronic automotive components and products sourced from SA.
"The fleet management product platform established by CI Fleet Management Systems should provide further international opportunities and the expanded range of products resulting from the Audio Navigation acquisition should continue to complement CI Automotive Training`s business."
The board has declared an interim dividend of 1c per share.
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