JSE-listed distribution company Rectron has emerged from the market slowdown relatively unscathed, posting moderate growth for the six months to December.
Both headline and attributable earnings increased by 20% from R10 million to R12 million. Headline earnings per share grew by 20% to 10.1c, which the company says is due to organic growth.
Turnover grew 21% to R316.4 million compared to the period ending in 1999. The split of the local to international operations was at 80% - 20%, unchanged from the comparable period.
Group CEO Mark Lu attributes the performance to Rectron`s ability to realise the benefits of exclusive distribution agreements, its "lean and mean" operational methods, the company`s extensive dealer and reseller base, and its understanding of and quick reaction to changes in the IT distribution market.
Local operating margins increased by 33% to R22.8 million from R14.4 million the previous year, while international operations recorded an operating loss of R3.7 million.
The source of this loss, the Netherlands operation, has been discontinued. The company says the other international locations are operating profitably.
Lu says the last two quarters have been "a disaster" for the IT industry generally, but he is enthusiastic about future prospects, both for SA and abroad.
"We are focused on increasing market share, while addressing discipline in key business areas such as cash flow and inventory holdings.
"In addition, we are planning to further strengthen our positioning in the manufacture and assembly of PCs, servers and memory products."
He says Rectron`s budgets for the next six months reflect strong growth in all areas of activity and plans are in place to increase the size of the company`s warehousing facilities in Johannesburg and implement a phased growth of the sales force.
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