Kunene Technology (KTL), which last night reported a 72% increase in its interim headline earnings, has given no further details of the potential unbundling of its stake in Grintek.
<B>Salient figures</B>
Kunene Technology results for the six months to 31 December 2001
Figures for the year-earlier period in parentheses:
Revenue from sales: R606.36m (R613m)
Profit before finance costs: R65.21m (R47.6m)
Profit before tax: R58.34m (R42.85m)
Profit after tax: R38.85m (R28.32m)
Headline earnings: R19.86m (R11.56m)
HEPS: 31.4c (27c)
Dividend per share: 12.5c (4.7c)
Current assets: R936.48m (R765.31m)
Current liabilities: R655.95m (R579.01m)
Deposits and cash: R197.31m (R142.65m)
NAV per share: 409c (316c)
The company announced in a cautionary notice two weeks ago that it was considering the unbundling, and has reiterated the cautionary with the release of its results for the six months to 31 December 2001.
Commenting on the results, chairman Zoli Kunene points out that a 16.3% increase in headline earnings per share was achieved despite turnover being flat.
"What is particularly pleasing in assessing Grintek`s performance is the progress the company has made with two of its key strategic initiatives," he adds.
"Firstly, the internationalisation of its defence business has contributed towards a 66% increase in the group`s export revenues." He says this means turnover in hard currency markets is increasing and the company is building a secure platform for future growth in offshore earnings.
"Secondly, notwithstanding the lower turnover in Grintek`s telecommunications business, we are encouraged by the progress made by that business in growing its product offering and customer base."
Revenue from sales in the telecommunications business was 20% lower than in the previous interim period, mainly because of delays in orders from operators and corporate clients. Kunene says operating margins were well maintained through prudent expense control.
While the industrial electronics division`s turnover fell by 19.4% due to a slowdown in the energy management business, turnover in defence electronics rose by 45.2%.
He says that while KTL is confident about the medium- to long-term future of Grintek`s telecommunications business, short-term market conditions remain unpredictable.
"Four new significant infrastructure supply contracts are currently being finalised with telecom operators in South and central Africa.
"Recent investments in the telecommunications field, Centricity, Syrinx and Application Integration Software, have improved their performance considerably during the reporting period."
The Kunene Technology share price was unchanged at 550c on the JSE by midmorning.
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