Rectron, one of South Africa's leading ICT and consumer electronics (CE) distributors, reports that revenue for the six months ending 31 December 2008 ended on R592 million - 1% down compared with the same period in 2007.
“Although the revenue figure dropped, gross profit is up by 3.6% and net profit before tax is up by 5% year-on-year,” says Dean Prinsloo, Rectron executive vice-president and chief operating officer. “This is a fairly resilient result considering current economic conditions.” He attributes the resilience to Rectron's massive capital expenditure in 2008, which focused on upgrading its warehouse's automatic facility as well as relocating to a “smaller” revamped Midrand head office.
“All this puts Rectron well ahead of other players in the local market and lean and mean enough to weather the storm,” he states.
Rectron Holdings' revenue for the same period ended on R672 million, which is also 1% down compared with the same period the year before.
Gerhard Malan, Rectron chief financial officer, points out that the company's Australian losses were a major contributing factor to Rectron Holdings reporting a lower net profit of R15.9 million, compared with the previous year's R20.6 million.
“The Australian operations had major foreign exchange losses, which resulted in a net loss of R5.7 million for the six months, R7.9 million lower than what was reported during the same period last year,” he explained.
“This is the first time that the Australian operations have showed a net loss. This is mainly due to the depreciation of the Australian dollar against the US dollar, but we are firmly convinced that the business will bounce back to its original strength during the second half of the financial year.”
Recession not an adversary
Commenting on the results and the challenges currently faced by both the global and local ICT and CE industries, Mark Lu, Rectron president and chief executive officer, emphasises that the company does not see the current recession as a business adversary, for two key reasons.
“Firstly, when people thinking of saving money, they may stop buying new computers, but will definitely continue investing in upgrades, which fits perfectly into our components and peripheral businesses,” Lu explains.
“Secondly, while it is true that only the fittest will survive, a recession will humble you and force you to focus on doing the right things for your company. Now is the best time ever for any business to look closely at its business fundamentals and make itself even more competitive. It is our responsibility to survive and prosper - no excuses.”
Cheslynne Britz, Rectron vice-president and general manager, reports that while Rectron remains focused on its traditional core operations, the company will continue diversifying and looking at adding more value-added products and services to strengthen its relevance to all stakeholders, including suppliers and resellers.
Rectron has developed a reputation for excellence in service and quality in the ICT and consumer electronics (CE) markets. For more on local brand recognition and vendor awards, see http://www.rectron.co.za/awards_corporate.htm.
The company has grown from four people operating out of a garage in 1995 to a driving force in the South African distribution arena, partnering with numerous top vendors to provide its customers with the most innovative products on the market. In 2008, the company upscaled and automated its warehousing and production environment, as part of a R30 million project, which also saw it relocating its head-office in Midrand. For more, on this project, see http://www.rectron.co.za/News/Corporate_News/PressNews/2008_30JulyRenovation.pdf.
“We want to make sure that customers are able to get everything they need technology-wise from us,” says general manager Cheslynne Britz.
“We offer 'best-of-breed' products at market-related, competitive prices. Our diverse portfolio includes products from Microsoft, Intel, Gigabyte, Transcend, Samsung, Sony, Logitech and Asus, to name just a few.”
“By providing knowledgeable support staff, over-the-counter and telephonic support, outstanding delivery service (up to two full trips a day per vehicle), on-site repair nationally for components like motherboards and monitors, as well as all our major notebook brands; and quick turnaround times from our dispatch, we offer peace of mind to our customers in all areas.”
For more Rectron milestones, see http://www.rectron.co.za/path.htm.
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