Reunert will use the R1.4 billion it earned from selling its Nashua Mobile subscriber base to Altech Autopage, MTN and Vodacom to "explore growth opportunities through investment," it says.
Reunert subsidiary Nashua Mobile, which had just short of a million subscribers when the April sale announcement was made, recently closed all its shops, and customers have been migrated to other networks, although not without teething issues.
At the time of the sale announcement, Reunert said the total R3.17 billion it would be paid would be first used to settle Nashua Mobile's liabilities, before being plugged into growth strategies, with the balance set to be returned to shareholders, either through dividends, or share buybacks.
Nashua Mobile's sell-off came less than a year after it vowed to fix its reputation in a bid to win over customers. Nashua Mobile had been battling as competition between mobile operators intensified in the saturated market. Reunert's decision was driven by the fact that Nashua Mobile was operating in a saturated, highly-competitive market, and experiencing declining average revenue per user and lower revenue streams.
Better off
Reunert notes in its year-end results, for the 12 months to September, that it made a R1.4 billion profit on Nashua Mobile's sale. It says this introduces "significant liquidity" to its balance sheet, enabling it to "seek meaningful future inorganic growth".
Excluding Nashua Mobile, the company grew overall revenue 7% to R7.8 billion during the year, but operating profit dropped 8% to R1 billion. Normalised headline earnings per share for all operations dropped 3% to 553.3c, while basic earnings per share gained 104% to 1 201.6c. Excluding Nashua Mobile, headline earnings per share - seen as a key measure of performance - dropped 7% to 439c.
Its Nashua unit - stripping out the mobile arm - grew revenue 13% to R3.4 billion. Had Reunert accounted for Nashua Mobile as a continuing operation, this segment would have grown its top line marginally, to R6.8 billion. Its operating profit without the unit also fared better.
Reunert notes increased market competition cost it sales at its Nashua Office Automation unit, although the large installed base sustained print volumes. Quince, the segment's asset-backed rental financing operation, delivered "another strong performance", but Nashua Communications reported mixed results.
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