JSE-listed Reunert, whose operating portfolio comprises electrical engineering, ICT and applied electronics, reported “marginal” year-on-year growth from its ICT companies in the six months to 31 March.

“ICT’s segment revenue increased marginally to R1.94-billion (from R1.93-billion the previous year) and segment operating profit increased to R318-million from R316-million the year before,” Reunert said.

Services dominated the revenue mix in Reunert’s ICT segment, accounting for just over R1-billion. Revenue from products was R729-million, with R185-million from interest on lease loans and loan receivables.

Within this segment, Reunert’s solutions and systems cluster struggled despite the merger of its IQbusiness and +OneX subsidiaries, announced in April, with “challenging macroeconomic conditions” cited as the reason.

“The solutions and systems integration cluster was negatively impacted by longer order placement cycles as enterprise customers faced weak growth and volatile market conditions,” it said.

The group’s Nashua business, which provides workspace solutions – including office automation, document management, connectivity and security solutions – improved its financial performance off the back of a more reliable supply chain, with the situation at South Africa’s ports improving over the past year.

“Sales were in line with historic norms as volumes improved on the back of successful large tender wins and an improved run-rate business,” said Reunert.

Broadband booms

Reunert said it has seen strong growth in its business communications cluster, where last-mile broadband connectivity continued its “double-digit growth trajectory”. Its rental finance cluster produced lower revenue because it started the reporting period with a loan book that was lower than usual. Macroeconomic factors like lower interest rates also contributed to revenue declines, said Reunert.

Group revenue showed a 6% year-on-year decline from R6.6-billion to R6.2-billion. Operating profit fell by 30% to R474-million, with net profit down 28% to R209-million. Headline earnings per share sank by 21% year on year to R2.27. An interim cash dividend of 90c/share was declared, unchanged from a year ago.