Growth in operating profit from continuing operations, coupled with additional proceeds from the sale of Nashua Mobile subscribers and interest earned on the full proceeds, have underpinned Reunert’s results in the six months ended March 2015.
Headline earnings per share (Heps) increased by 11% to 264,8c, while revenue climbed by 7% to reach R3,9bn. Operating profit was R502,3m, an increase of 5% over a year ago.
The group has hiked its dividend by 10,5%, to R1,05/share, on the back of the results.
The good performance came in spite of a sluggish economy, the adverse impact of Eskom’s load shedding and delays in the commencement of various national infrastructure projects, Reunert told shareholders in a statement.
Revenue at Nashua (excluding Nashua Mobile) increased by 8% to R1,7bn. Operating profit jumped by 19% to R243,7m, driven by increased volumes at ECN, a larger rental asset book in Quince and the return to profitability of Nashua Communications and Prodoc.
“The voice component of Nashua’s business has delivered very pleasing results,” Reunert said.
“Nashua Communications, which offers unified communication solutions, has been successful in acquiring and executing several large corporate contracts [while] ECN, our [voice over Internet protocol] business, has had another successful period and has grown its customer base and minutes routed over [its] network.”
Reunert’s balance sheet also received a big boost from the sale of the Nashua Mobile subscriber bases to MTN, Vodacom and Altech Autopage. Cash at the end of March stood at R2,5bn, from R463m a year ago.
It said it intends using its strong balance sheet and cash position “to focus on and prioritise strategically compatible growth opportunities”.
Reduced margins in the office automation business have been offset partially by cost reductions and improved sales across all product ranges, Reunert said.
The CBI-electric division also performed well. Revenue here increased by 11% to R2bn, while operating profit jumped by 20% to R257,3m on the back of increased sales and improved efficiencies.
The Reutech subsidiary’s revenues fell by 13% to R423,7m, with operating profit of R35,3m. — © 2015 NewsCentral Media