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| It
is with satisfaction that
I look back on the past
year. The results achieved
vindicate the decision taken
more than a year ago to
restructure the group. Essentially
we have accomplished everything
that we set ourselves to
do. |
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| The
group's greater focus has
assisted us to act decisively
on the future positioning
of our remaining businesses,
with the sole objective
of ensuring sustainable
growth. |
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| Comparable
headline earnings per share
grew by a satisfactory 30,7%.
Sales from our ongoing businesses
increased by 20,2%, while
total turnover declined
by 30,3% as expected, following
the disposals of Alstom,
Temsa and Reumech OMC in
the previous year.
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| In
addition, we returned R510
million (R2,50 per share)
to our shareholders by way
of a special dividend in
October 1999. This was appropriate
at the time as the group
had generated substantial
cash reserves from the restructuring
and disposal process. From
a financial standpoint we
are satisfied that our actions
and timing were correct.
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| The
bigger question facing the
group is whether, strategically,
we are progressing in the
right direction. The group's
greater focus has assisted
us in acting decisively
on the future positioning
of our remaining businesses,
with the sole objective
of ensuring sustainable
growth. Achieving that objective
is not easy, as evidenced
by the lack of real growth
in the South African economy.
I am satisfied that, however
tentative, we have taken
steps in the right direction.
The urge to move too fast
had to be resisted to ensure
sustainability going forward.
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| Nashua
changed markedly in the
past year. The cellular
business was merged with
that of Nedcor to form the
supplier of choice for the
corporate customer in July
2000. More than 200 000
business people are customers
of Nashua NedTel Communications
and we are proud to have
such an elite clientele.
Substantial investments
are being made in order
to guarantee superior service
and efficiency. Management
is conscious that differentiation
and value-added services
are key to the future of
that business. Reunert owns
58% of the combined entity.
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| The
office automation business
subtly changed from being
only an equipment supplier
to being a provider of solutions.
Incorporating reliable equipment
into a bigger network is
creating major opportunities
for growth. There was a
shortage of skills in the
areas of networking and
software which had to be
obtained. |
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| Revenue
on a comparable basis grew
by 20%, while operating
profit improved by 30%. |
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| Reunert
formed a strategic alliance
with The IQ Business Group,
and a new company IQ Works
was established in July
this year. This company
will provide the total office
solution in all areas of
networking and information
technology. A close working
relationship exists between
Nashua and lQ Works. Progress
to date has been excellent
and I am confident that
all expectations will be
met in the short to medium
term. |
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| Panasonic
continues to endure tough
market conditions. Strong
management action ensured
profitable trading under
difficult circumstances.
Although returns fall short
of group expectations, I
am optimistic that positive
economic value added is
achievable in the short
term. |
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| Siemens
Telecommunications (Sietel)
is going from strength to
strength. Its presence and
undisputed leadership in
fixed line and wireless
communications ensure record
order books and demand for
its products and services.
We are confident that Sietel
will not only maintain its
position as the leading
telecommunications company
in South Africa, but will
further widen the gap between
it and its nearest competitor.
Great opportunities that
still need to be exploited
exist in the field of networks.
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| The
defence businesses have
had an excellent year. Reutech
Radar Systems was awarded
a major contract for the
supply of electro-optic
trackers for the South African
Navy. It is a just reward
for years of hard work and
investment in what is arguably
the finest example of high
technology in South Africa.
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| Reutech
Defence Industries secured
its first export orders
for the new, all-digital,
wide-band airborne radio.
This product is testimony
to the quality of our engineers
and technicians and is essentially
"soft" from antenna
to audio. |
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| Fuchs
Electronics continues to
export its entire production.
Few South African companies
can boast that 100% of sales
are exported. |
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| Reunert
Defence Logistics is suffering
from the severe cutback
in local defence expenditure.
This situation is not expected
to improve in the short
term. Alternative models
are being examined to mitigate
this downturn. |
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| ATC
currently benefits greatly
from the worldwide shortage
of fibre. The plant is running
at capacity and is expected
to continue doing so for
the foreseeable future.
More capacity will come
on stream in December after
the installation of an additional
draw tower that should further
enhance prospects. The strategic
significance of manufacturing
one's own fibre is highlighted
by the current high demand
on fibre-producing sources.
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| Circuit
Breaker Industries (CBI)
expanded its global presence
by opening wholly-owned
subsidiaries in Europe and
North America. Ongoing product
certification in those continents
is a priority and market
penetration is dependent
upon the speed of that process.
Sales are increasing on
a monthly basis and the
scope for real growth is
better than ever. It is
a greenfields approach and
calls for great investment
in time, patience and money.
However, with the rand's
weakness against the dollar
and the dearth of suitable
acquisitions, this strategy
is appropriate at present.
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| In
the domestic market, the
decision was taken to increase
CBI's product offering in
order to leverage the considerable
goodwill enjoyed by CBI
in the local market. The
benefit of that decision
is not expected to have
an impact in the short term.
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| African
Cables (Afcab) acquired
the energy cable business
of Rosslyn Cables from ATC.
Afcab now offers a complete
product range from house
wire to super-tension cables.
The additional capacity
and greater access to African
markets position Afcab strongly
for future growth.
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| Efficiency
at Afcab improved considerably
as a result of management
action. A programme of continuous
improvement has been implemented
and we are positive that
the desired results will
be achieved. |
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| In
conclusion, I would like
to express my sincere gratitude
to everyone who has contributed
so greatly during the past
year. Without their help
and support it simply would
not have been possible.
The assertiveness and determination
to succeed are evidence
of the calibre of our people.
I look to the future with
confidence, knowing that
we can achieve anything
we set our minds to.
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