Uniserv benefits from exchange rate

The devaluation of the rand helped United Service Technology Holdings (Uniserv) offset a slowdown in revenue growth at Nasdaq-listed UTi Worldwide. The 36.1% equity stake in UTi is Uniserv`s only interest.

Chairman Tiger Wessels says the slowdown in revenue growth for the group was expected because of weakening economic conditions, particularly in the US.

"This was largely offset by the devaluation of the South African rand when translating the UTi results to South African rand," he adds.

Revenue in UTi, a global supply chain solutions provider, increased by 29% for the year to end-December 2001, while operating profit on ordinary activities (before amortisation of goodwill) rose by 54%. Earnings before interest, tax, depreciation and goodwill amortisation were up 48%.

Free cash flow generated during the year amounted to about R296 million, compared with R126 million the previous year.

Wessels points out that the prior-year results have been restated to bring them in line with US generally accepted accounting policy (GAAP), since UTi has changed its accounting policy from reporting in terms of international accounting statements to US GAAP.

He says that in January this year UTi increased its depth of service and global footprint with the acquisition of Spanish-headquartered warehousing and logistics services provider Grupo, bringing UTi`s warehouse space in Europe to about three million square feet.

In February, UTi announced the roll-out of its strategic growth plan for the next five years.

"Despite weaker economic conditions there are encouraging signs of strengthening ocean freight business early in the first quarter of fiscal 2003," Wessels says.

"UTi continues to manage costs in their operations as sustained improvements in the airfreight business, particularly in the US, are not yet apparent."

A dividend of 10c per share, unchanged from the previous year, has been proposed.