Nashua Mobile drags on Reunert
Listed ICT group, Reunert, has reported an 8% decline in normalised headline earnings per share for the six months ended March 2014, to 237.2 cents, curbed by its Nashua Mobile business.
On 14 April 2014 Reunert announced that its subsidiary, Nashua Mobile, had entered into separate and distinct agreements with MTN and Vodacom to dispose of its subscriber bases.
Reunert therefore presented Nashua Mobile as a discontinuing operation in its results.
Nashua Mobile reported a 41% decline in profit for the period to R60.4 million.
Normalised headline earnings per share from continuing operations increased by 3% from 194 cents to 200 cents.
Group revenue from continuing operations increased by 14% to R3.7 billion, whilst operating profit increased from R449.2 million to R477.2 million.
Reunert declared a gross interim cash dividend of 95 cents per ordinary share (2013: 95 cents).
Nashua
Revenue increased by 3% to R3.4 billion for the Nashua segment as a whole. However, excluding Nashua Mobile, revenue increased by 10% to R1.6 billion.
Operating profit from continuing operations increased by 11% to R204.4 million, whilst operating profit, including Nashua Mobile, decreased by 8% to R290 million.
Nashua Office Automation reported an increase of 19% in revenue, which was principally due to the acquisition of Nashua North and ProdocSvenska AB, in Sweden.
Nashua Office Automation managed to limit the impact of the weakening Rand on its margins, Reunert said.
Revenue for Nashua Mobile decreased by 5%, as a result of continued price deflation in the mobile industry, as well as the impact of the reduced incentives received from the service providers.
“Nashua Communications reported a marginal decrease in revenue. The sales and installations of our VoIP solution continue to strengthen, while the Siemens/Unify business remains subdued,” Reunert said.
It said that the business of Nashua Communications was right-sized in October 2013, which resulted in once-off restructuring costs being incurred. As a consequence of these costs, operating profits were slightly down on the prior year.
Looking ahead, Reunert said it will continue to pursue earnings growth, both organically and through synergistic acquisitions.
“However, given the sluggish economy, organic growth is expected to remain challenging.”
“Consequently, the group will also retain its focus on rigorous cost control, effective cash management and the extraction of efficiencies from its businesses,” Reunert said.
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