Media Releases

Electronics group continues to be acquisitive
Monday, 2 December 2002

For the fifth consecutive year, Reunert Limited produced headline earnings per share growth in excess of 25% a year.

These results were based on a mixture of organic and acquisitive growth, reported executive director Pat Gallagher, at the group's financial results presentation yesterday.

"All businesses are producing good results, bearing in mind their individual circumstances," added CE Gerrit Pretorius. "In most cases sales have grown strongly, while operating margins benefited from the increased activity".

Nashua, the office systems operation and all it divisions, performed strongly and this was partly due to the excellent year experienced by the in-house finance arm, RC&C Finance Company, which increased its rental book by 28% to R954-million.

Royce Imaging, the re-manufacturer of toner and cartridges also performed well, doubling its sales since being acquired a little more than a year ago.

Reunert also announced yesterday that it has reached an agreement with The IQ Business Group to acquire the 50% stake in IQ Works currently held by them. Pretorius said this would enhance the Nashua digital product offering in future.

NPC Electronics, exclusive distributors of Panasonic products showed growth in the business and non-consumer operations. Consumer demand was flat. Futronic, a new brand targeting the entry-level consumer market, was launched last month, whilst the company reported that the distribution rights for Nintendo games had been secured.

Nashua Mobile, which became a wholly owned subsidiary during the year, performed well. The subscriber base has grown to 265 000, with an additional 45 000 pre-paid customers. Average revenue per user (ARPU) is in the region of R570 per month and is aided by an increased offering in value added services.

The group's telecommunications operations also reported a pleasing year. The market has continued to expand with the spend on the third cellular licence, the second network operator and the telecommunication infrastructure spend in Africa.

CBI grew sales by 39%, clearly showing the benefits of its wider product offering locally and its growing penetration of the export market.

Approximately 17% of sales revenue comes from exports and the company expects to grow this steadily as the quality of the local product gains recognition. The company's export market was also assisted by the devaluation of the rand.

African Cables benefited from increased local demand for power cables, resulting in improved turnover. Margins improved due to operational efficiencies.

Reunert, subject to approval by the Competition Commission, recently acquired Marconi's 51% stake in ATC increasing its stake to 89,5%.

"The decision to increase our investment in ATC clearly demonstrates our belief that this business will turn and again produce good results. Negotiations to introduce a black economic partner are progressing well and will hopefully be finalised early in the new year," Pretorius said.

"We are proud of our achievements over the past five years. During this period, Reunert has distributed more than R1,2-billion to shareholders by way of dividend, which is around 30% of our current market capitalisation. In addition, we have achieved compound growth in headline earnings per share in excess of 25% per annum".

A final dividend of 88 cents a share was declared, bringing the total dividend for the year to 118 cents a share - an increase of 30% a share for the year.