Reunert lifts half year operating profit by 9%

Reunert on Tuesday reported a 10% rise in revenue for the six months ended March 2017, to R4.421 billion, while operating profits increased 9% to R616 million.

Headline earnings per share were up marginally, to 275 cents, from 271 in 2016.

The Reunert group manages a portfolio of businesses in the fields of electrical engineering, information and communication technologies including Nashua.

The company said that growth was driven by a 31% increase in revenue in the Electrical Engineering segment, from R1.82 billion to R2.38 billion.

Revenue in the ICT segment however, declined by 5% to R1.6 billion, and the revenue in
the applied electronics segment was flat at R693 million.

The board declared a gross interim cash dividend of 120 cents per ordinary share (2016: 113 cents per share).

“These results were achieved in challenging operational circumstances in which the political and economic environment contributed to reduced economic growth and increased rand volatility,” the listed group said.

In addition, the applied electronics segment experienced a lull in orders from a major export market while follow-up contracts were negotiated and concluded, it said.

Electrical engineering’s operating profit increased by 20%, ICT improved its operating profit by 11% and applied electronics’ operating profit reduced by 50%.

Over the last 18 months, the group concluded five acquisitions totalling R751 million; R494 million was invested in the 2016 financial year and the remaining R257 million in
the reporting period, Reunert said.

Looking ahead, the company said it will benefit from an improvement in export orders, received during this period, which will reflect in the second half’s profit as these export orders translate into sales.

“This, together with the enhanced output in our tactical communication business, should lead to an improved second half operating profit in the applied electronic segment,” it said.

Read: Reunert buoyed by Nashua mobile sale

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Reunert lifts half year operating profit by 9%