Reunert expects improved revenue in the second half

Gerrit Pretorius, chief executive of Reunert, gives a serious look to Reunert`s positive interim results.

JOHANNESBURG – Reunert said yesterday that it expected an improved performance in the second half of the financial year after it reported a 25percent increase in revenue for the six months to end March.

Revenue increased by 10percent to R4.84billion, up from R4.42bn as compared with the same period last year. The group credited its performance to its Applied Electronics segment, which produced 25percent increase in revenue.

“The expectation is supported by the strong export order books of the Applied Electronics segment, our anticipation of some improvement in volumes and product mix in the electrical engineering segment and the contribution of the information and communications technology (ICT) segment’s performance reinforced by the contribution from the acquisition of SkyWire,” the group said.

Applied Electronics revenue increased to R863million, up from R693m on the back of positive export sales and the impact of the acquisitions made in this segment. “However, due mainly to the stronger average exchange rate experienced, margins were reduced in the segment, resulting in operating profit being flat for the period at R61m,” the group said.

Revenue in the electrical engineering segment increased marginally, up by 2percent to R2.43bn, up from R2.38bn due to higher metal prices, offset by a substantial reduction in revenue in its telecom cable joint venture and the impact of the stronger rand.

The group said revenue in the ICT segment increased in line with inflation, despite the deflationary pressure of the stronger rand, driven by positive sales volumes. Revenue was up by 4percent to R1.67bn.

The group’s profit attributable to equity holders declined by 2percent to R445m, down R452m while headline earnings per share remained stable at 275cents a share, same as those reported a year ago.

The group declared a gross interim cash dividend of 125c per ordinary share, up from 120c declared last year.

Reunert shares closed 4.6percent lower at R77 on the JSE yesterday.