Reutech on acquisition trail

By Leon Engelbrecht, ITWeb senior writer

Johannesburg, 22 Nov 2007

Reunert CEO Gerrit "Boel" Pretorius plans to expand his defence IT subsidiary Reutech`s portfolio on the back of good financial results.

"If you look at other defence companies in SA, there is nothing like Reutech. We may now make an acquisition or two" to build out the business`s portfolio, he adds.

Pretorius has reported to shareholders that Reutech has had an excellent year, contributing 7% (R109 million) to Reunert`s operating profit. This is substantially up from R30 million in the previous year. Revenue also increased by 55%, to R490 million.

The CEO, in June last year, put Reutech on the market, saying it is non-core and not part of his future plans for Reunert. However, in February, he took the company off the market, saying although "Reutech remains non-core, it would be insane to give away a profitable business".

Pretorius says he received a number of offers for Reutech, but these were all "pedestrian". He adds that the prospective buyers expected him to give away the business.

He adds indications are that future demand from the SA National Defence Force will ensure Reutech remains viable. Products developed over the past five years are now nearing the production phase and should contribute meaningfully, he adds.

"Exports of airborne radios and electronic fuses remained brisk and we are confident that existing markets will provide a reasonable base going forward," Pretorius says. "Our Stellenbosch radar business, Reutech Radar Systems (RRS), developed a product that detects moving slope walls in open-pit mining. Given a premium on safety in mining, we are excited about prospects for this product. Systems have been sold to mining operations in SA, Australia and South America."

Reutech includes RRS, RDL Technologies, RDI Communications and Fuchs Electronics. In addition to radars, the companies supply the South African and other militaries with hardware- and software-driven radio equipment, fire control systems and computerised logistics solutions.