Engineering, electronics and technology group Reunert has thumbed its nose at the weak South African economy, hiking its dividend by 8.6% to R3.54/share (before withholding tax) on the back of robust full-year earnings growth. This brings the total dividend for the year to R4.74/share.

The group, which has been listed on the JSE since 1948, said headline earnings per share rose by 19% in the 12 months to end-September 2017. It had a strong performance across all segments in the second half, including its export businesses, it said.

Profit was up 19% to R1.1bn on revenue that rose 15% to R9.8bn.

The group’s “electrical engineering” segment grew revenue by 28%, while the “applied electronics” segment grew by 14%.

Revenue in the ICT segment was flat, though “margin-enhancement programmes” helped operating profit in this segment (which includes Nashua and ECN) rise 16% to R635m.

In the office automation business, revenue increased from the sales of fewer but higher-value units, while in the voice-over-Internet business, the final statutory reduction in interconnection rates (the fees operators charge to carry calls between their networks) resulted in lower income despite positive customer growth.

“Our voice business, ECN, enjoyed a 9% growth to 1.2bn minutes carried on the network,” Reunert said in an overview of the numbers. “The impact of lower business confidence reduced demand per customer. This was offset by substantial growth in the number of customers serviced.”

Investment

ECN invested R12m in its network to create a “more robust, high-quality and simplified network, creating scale for our new business Internet access product suite”.

“The ability to provide both voice and data to our customers offers a new diversified sales stream and underpins the continued growth rate of this business.”

Reunert said its traditional businesses have continued to deliver real growth in tough local economic conditions.

“Applied electronics’ export orders are at record high levels and should translate into a strong operating performance, with exchange rates providing some uncertainty in the financial results. Subject to no adverse changes in the local economic, social and political environment, we expect another year of real growth in 2018.”

The order mix of the group again favours a stronger financial performance in the second half of the financial year, it said.