Reunert's Nashua subsidiary has done better in the first half of the year without its Nashua Mobile unit than it would have done otherwise.
The listed company this morning released its results for the six months to March and said revenue from its continuing operations - which excludes Nashua Mobile - gained 14%, to R3.7 billion. Its operating profit moved up from R449.2 million to R477.2 million.
Basic earnings per share grew 3%, to 200.9c, while headline earnings per share from continuing operations grew to 201.3c, also a 3% gain. However, normalised headline earnings per, including Nashua Mobile, dropped 8%, to 237.2c.
Reunert said last month that Nashua Mobile would sell its MTN and Vodacom subscriber bases back to the mobile duopoly for R2.26 billion, before eventually shutting down. It is also in talks to hive off its Cell C base to an unnamed third party.
The move will leave the independent mobile services provider space with only one main contender - Altech Autopage - which sees upside in its monopoly status, as it feels it can offer a differentiated service.
Stripping out
Reunert's Nashua unit grew its top line 3%, to R3.4 billion. However, excluding Nashua Mobile, revenue increased 10%, to R1.6 billion. Operating profit from continuing operations increased 11%, to R204.4 million.
Adding in Nashua Mobile, operating profit decreased 8%, to R290 million. Nashua Mobile's revenue dropped 5% during the period due to price deflation in the mobile industry, as well as the impact of the reduced incentives received from the service providers.
Reunert explains its decision to sell its subscriber base was driven by the expiry of the service agreement between Nashua Mobile and Vodacom, and the expiry of the incentive deal with MTN.
On the back of those two events, Reunert and Nashua Mobile pondered the long-term prospects for Nashua Mobile and "concluded that it is unlikely that this business would generate acceptable returns".
Nashua Office Automation reported an increase of 19% in revenue, which was mostly due to the acquisition of Nashua North and Prodoc Svenska, Reunert's acquisition in Sweden. Nashua Office Automation managed to limit the impact of the weakening rand on its margins, says Reunert.
Nashua Communications reported a marginal decrease in revenue, while Pansolution's revenue and operating profit declined marginally as the market remained highly competitive. Quince, the segment's financing operation, delivered a "strong performance" with increased revenue and operating profit.
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