Electrical and technology company Reunert this morning reported a 9% jump in revenue, to R5.1 billion, for the six months ended 31 March, with operating profit growing 6%, to R643 million.
The company says in a statement that normalised headline earnings per share increased by 7%, to 277.5c per share, and an interim cash dividend of 78c per share, 7% up on last year, was declared.
Cash on hand was R294 million at the end of March, the company adds, despite spending R66 million the past six months on upgrading and replacing equipment in the group.
CBI-electric, Reunert's electrical engineering division, upped revenue by 8%, to R1.8 billion, and operating profit by 9%, to R289 million, despite Reunert's interest in the telecom cable business reducing from 100% to 50%, from 1 February 2007.
Reunert CEO Boel Pretorius says the low-voltage business had a good start to the new financial year - even with moving the assembly operations from Qwa-Qwa to Lesotho, which led to a disruption in supply of products.
The costs associated with the move were fully absorbed in the review period. Low-voltage improved revenue by 7% and grew operating profit by 30%, he says in the statement.
Pretorius states CBI-electric enhanced its product range, with the acquisition of Moeller Electric SA. The acquisition was effective 1 April and is expected to add 10% to revenue of the low-voltage business on a full-year basis. Energy cables benefited from buoyant market conditions, with revenue improving by 29% and operating profit up by 15%.
"Our results could have been better. We had some disruptions in manufacturing due to the ongoing upgrading of capacity, as well as drawn out labour unrest, which was finally resolved in February," Pretorius says. "We are giving close attention to bringing efficiencies to the desired levels and working capital should reduce as efficiencies improve."
The company reveals the telecommunication cable joint venture with Altron suffered from a collapse in demand for copper cable from Telkom, leading to a 44% revenue decline. This was partly offset by a strong demand for the instrumentation/data and fibre cable from other customers. Neotel and the cellular operators, in particular MTN, are beginning to buy significant quantities of fibre cable.
The Nashua group of businesses upped revenue by 10%, to R3.1 billion, with operating profit increasing by 12%.
According to Pretorius, increased export sales and healthy margins led to a "very pleasing" result from the defence businesses. Reutech's revenue increased by 40%, to R282 million, while operating profit grew by 396%, to R65 million.
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