Grintek, the Kunene Group`s electronics arm, plans to reduce its exposure to low-growth areas such as the defence sector and focus on the high-growth telecommunications market, says group MD Sybrand Grobbelaar.
Speaking after the release of Grintek`s financial results for the year to 30 June, Grobbelaar said the reduced exposure to the defence sector will allow the company to invest further capital in the telecommunications business.
The company, which operates in the telecommunications, industrial electronics and defence electronics sectors, has embarked on an "internationalisation strategy" in terms of which it plans to expose its own intellectual property to international markets to a greater degree.
"Exports in the past have contributed 15% to 20% to revenue," says Grobbelaar. This percentage has dropped due to domestic growth, but Grintek plans to increase it once more.
In the year to 30 June, Grintek lifted earnings 102% to R39.5 million from R19.5 million the previous year, translating to an 82% increase in headline earnings per share to 18.4c from 10.2c.
Turnover rose 65% to R942 million from R571.9 million previously.
"We are pretty pleased," Grobbelaar says. "We expected it, but it has been hard work.
"These results would not have been possible without the group`s commitment to developing long-term mutually beneficial relationships with our clients and strategic partners," he adds.
The telecommunications division, working in conjunction with international telecommunications companies, continued to show growth and contributed 68% to the group`s revenue.
Grintek says the division, with an established foothold in the public networks arena, has matured into a major player in the corporate communications domain over the past year.
"The business has exciting potential for local as well as global sales with recent successes including the contract to supply and maintain equipment to monitor Telkom`s SS7 network and the two-year supply contract for Tellabs` Martis DXX system used for Telkom`s leased line network," says Grobbelaar.
The group says its new industrial electronics division is well placed in both the local and international markets to establish its aviation, power electronics, antenna and information management businesses as innovative solution providers.
Grintek has also entered into a joint venture with Swedish group Celsius, which it says has further entrenched the group`s defence electronics business interests in the global market.
"Equity partnerships with major defence companies will focus our technology base and strengthen our access to international markets. The sale of equity in the defence electronics interests will enable us to redirect further capital into the high-growth telecommunications business," says Grobbelaar.
In addition to the Telkom contracts, the group has also signed contracts with, among others, Vodacom, call centres and dealing rooms.
Grintek`s share was trading at 122c on Thursday morning, 12c up from Wednesday`s close, after 362 300 shares changed hands in 16 deals.
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