Media Releases

Reunert increases HEPS by 20%
Tuesday, 18 May 2004

By: Carina de Klerk 

Interim dividend up 25%

The return to profitability at Siemens Telecommunications, ATC and Panasonic contributed to Reunert increasing its headline earnings per share by 20 percent for the six months to March 31, 2004. The interim dividend of 40 cents per share declared is an increase of 25 percent over the comparative period.

Operating margin increased from 10,9 percent to 11,3 percent, boosting operating profits to R339,5 million rand. Revenue declined by one percent as a result of a stronger rand and price decreases passed on to customers. Volume growth was insufficient to compensate for the lower selling prices.

Interest and dividend income increased from R21 million to R28 million in spite of lower interest rates. Cash increased form R180 million to R689 million over the comparative period, in part due to the sale of a large portion of the RC&C Finance Company's book in December 2004. All businesses contributed towards the strong cash position.

Commenting on the results Reunert chief executive Gerrit Pretorius said: "Siemens Telecommunications has made a welcome return to profitability. The strong rand did impact on revenue, but the business is doing well and continues to hold a strong position in the South African telecommunications industry."

"We are pleased that ATC and Panasonic's performance also improved over last year. This turnaround, together with the continued growth in our other operations, bodes well for the latter part of the year."

As expected, Reutech's sales and profitability dropped significantly, mainly due to the cyclical nature of the defence industry. The strong rand also affected margins negatively in the export dependent businesses. However the defence division is well positioned to take advantage of exciting opportunities.

Pretorius is positive on the group's prospects: "The rate of increase in headline earnings per share in the second half is likely to be higher than that achieved in the first half," he said.