Nashua Mobile sale worth R1.4 billion
JSE-listed Reunert says the profit recognised in respect of the sale of subsidiary, Nashua Mobile, amounted to R1.4 billion.
The sale of Nashua Mobile’s subscriber bases to the mobile networks and Autopage was made unconditional after approval by the Competition Tribunal in late September.
“The sale process was professionally completed through careful planning and detailed
project plans,” Reunert said in reporting its financial results for the year ended September 2014.
Nashua Mobile informed subscribers that their accounts would be moved to Altech Autopage Cellular (Cell C users), MTN, and Vodacom in early November.
Back in April, Nashua Mobile said that the disposal of its MTN and Vodacom subscriber bases alone, would generate a combined gross sum of R2.26 billion plus VAT.
The following month, Autopage, a wholly owned subsidiary of Altron, entered into a sale agreement to purchase its 65,000 strong Cell C subscriber base for approximately R91.5 million.
On Tuesday (18 November), Reunert reported a 7% rise in revenue from continuing operations to R7.8 billion, however, operating profit decreased by 8% to R1 billion.
Basic earnings per share and headline earnings per share from continuing operations decreased by 52% to 235.4 cents and 19% to 391.2 cents, respectively.
Normalised headline earnings per share for the group, from all operations, decreased by 3% from 569.1 cents to 553.3 cents.
Reunert declared a gross final cash dividend of 275 cents per ordinary share, unchanged from 2013.
The group said that revenue from the electrical businesses, including the telecoms joint venture increased by 3% to R3.6 billion. Despite the modest increase in revenue,
operating profit decreased by 15% to R427.6 million, it said.
“The industrial action in the metals’ industry had a significant impact on the segment, which lost more than a month of production in the current year.”
Revenue for Nashua increased marginally to R6.8 billion for the segment. However, excluding Nashua Mobile, revenue increased by 13% to R3.4 billion.
Operating profit from continuing operations increased by 4% to R453.8 million, whilst operating profit, including Nashua Mobile, decreased by 2% to R637.5 million, Reunert said.
“Increased competition and a difficult sales market resulted in a decline in new unit sales by Nashua Office Automation, although the large installed base sustained print volumes.
“Service and annuity income grew in line with expectations. However, operating margins were affected by the lower sales volumes as operating costs are largely fixed,” it said.
Nashua Communications, Reunert said, reported mixed results. Sales and installations of its VoIP solution continue to strengthen, while the Unify and PBX business remains subdued.
The drop in interconnect rates in April provided margin expansion in the VoIP business, which improved operating profits for the year.
Looking ahead, Reunert said it will continue to pursue earnings growth, both organically and through synergistic acquisitions.
“The proceeds from the sale of the Nashua Mobile subscriber bases will introduce significant liquidity to the Reunert balance sheet. This provides the group with the means to seek meaningful future inorganic growth.”
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