Press Release: Financial year 2022 (FY22) Interims financial performance
Wednesday, 25 May 2022
Johannesburg, 25 May 2022
Reunert is pleased to announce our financial performance for the six months ended 31 March 2022 (H1FY22) which is an overall improvement on the comparative period of the prior year.
Key highlights for the past financial half-year include:
- Group revenue up by 11% to R5,1 billion (H1FY21: R4,6 billion);
- Operating profit up by 4% to R465 million (H1FY21: R448 million);
- Profit after tax up by 7% to R331 million (H1FY21: R310 million);
- Headline earnings per share (HEPS) up by 1% to 195 cents (H1FY21: 193 cents);
- Earnings per share (EPS) up by 1% to 196 cents (H1FY21: 194 cents); and
- Interim dividends per share up by 7% to 75 cents (H1FY21: 70 cents).
Reunert is three operating segments, Electrical Engineering, Information Communication and Technology (ICT) and Applied Electronics, all delivered good segmental performances in a challenging local environment.
The Electrical Engineering segment delivered a pleasing operating profit despite the negative impact of the three-week industry-wide wage-negotiation strike. Segment operating profit decreased by 7% to R151 million from R163 million (H1FY21). The power cables business’ ongoing lean six sigma initiatives resulted in improved operational efficiencies and resulted in increased operating margins being achieved in the period under review. There is also early evidence of an increase in demand with several large power cable contracts having been secured for delivery in the second half of this financial year. The circuit breaker business (CBi-Electric: Low Voltage) exports continued strongly, while local sales were in line with the prior period’s. The circuit breaker business continues to benefit from excellent export demand supported by its local market share.
The ICT businesses delivered with steady growth as the segment’s operating profit rose by 4% to R305 million from R293 million (H1FY21). The Total Workspace Provider business (Nashua) launched a dual brand strategy to counter the global product supply constraints experienced by their primary OEM. In addition, new complementary solutions and services revenue has grown at a compound 22%. +OneX, the solutions and systems integration business, successfully integrated their acquisitions. The acquisitions, together with an improved performance of the traditional managed services and the integrated communication business, resulted in an increase in +OneX’s contribution to the segment’s profitability. The Group’s communication businesses, ECN and Skywire, were able to maintain their profitability at the same level as the prior year, despite the demand for voice minutes declining because of the economy and the adverse effects of load shedding.
The Applied Electronics segment’s profitability recovered strongly, with profitability rising by 77% to R55 million from R31 million (H1FY21). Export permits were finally released in the second quarter of FY22 and the Group delivered into several of the delayed export contracts, particularly at Fuchs, the Group’s fuze business. The ability of the Applied Electronics segment’s sales force to travel, now that the majority of countries’ Covid-19 travel bans have been lifted, has increased the segment’s order book significantly to R1,8bn. These contracts will be executed in H2FY22 and FY23. The Group’s renewable energy businesses are progressing well, with considerable effort going into the enhancement of systems, processes and the product range at the battery storage business, BlueNova. The solar photovoltaic businesses, Terra Firma Solutions and Lumika, continue to grow from strength to strength and to capitalize from a buoyant renewable energy market.
Reunert’s Group CEO Alan Dickson said,
“We are pleased with the Group’s consistent performance and delivery amidst a challenging and dynamic environment. The performance in the first half positions the Group to benefit from its strong export order books, and improving Electrical Engineering and ICT businesses to deliver an improved full-year performance”.
The Group CFO, Nick Thomson, stated that,
“Reunert’s management teams’ ability to identify and secure opportunities as well as to manage their business unit’s cash flows and operating costs during these difficult times of Covid, disrupted supply chains and high commodity prices due to the Russia - Ukraine war, have resulted in our strong balance sheet. This financial strength allows us to go forward with confidence, to execute our strategy, to grow our businesses organically and to drive further growth through acquisitions in the ICT segment and through opportunities to invest in renewable energy.”
The full results presentation and / or webcast will be available after 11h00 on Thursday, 26 May 2022 at https://www.reunert.co.za/results-reports-and-presentations.php
For further details contact:
Investor relations and communications
Tel: +27 82 887 9417
Reunert is an industrial group with a portfolio of 20 businesses in its Electrical Engineering, ICT and Applied Electronics segments. It was founded in 1888 and listed on the JSE in 1948. It is included in the JSE industrial goods and services (electronic and electrical equipment) sector with a market cap of just over R10 billion; and is a constituent of the FTSE/JSE Responsible Investment Index. For further details, see www.reunert.co.za