Wrap Text
Unaudited interim financial statements and cash dividend declaration for the six months ended 31 March 2023
REUNERT LIMITED
Incorporated in the Republic of South Africa
Registration number 1913/004355/06
Ordinary share code: RLO
ISIN code: ZAE000057428
("Reunert", "the Group" or "the Company")
Unaudited condensed consolidated interim financial statements1
and cash dividend declaration for the six months ended 31 March 2023
The contents of this short-form announcement are the responsibility of the board of directors of the Company (the Board). Shareholders are advised that this
short-form announcement does not contain full or complete details and represents a summary of the information contained in the full announcement, which is
accessible via the JSE link at https://senspdf.jse.co.za/documents/2023/JSE/ISSE/RLO/Interim_23.pdf and on Reunert's website
(https://reunert.co.za/downloads/results/2023/Reunert_Interim_Results_2023.pdf) from 24 May 2023. Shareholders and investors are advised to review
the full announcement in making any investment decisions.
The full announcement is also available for inspection at no charge at the registered offices of the Company and its sponsor during normal business hours.
Salient features
31 March 31 March
2023 2022 %
Rm
Group revenue 6 203 5 114 21
Operating profit 620 465 33
Attributable Profit 412 316 30
Headline earnings per share (cents) 267 195 37
Earnings per share (cents) 259 196 32
Dividend per share (cents) 83 75 11
Overview
Reunert is pleased to present its results for the six-month period ended 31 March 2023 (H1 FY: 2023), which reflect continued growth in the Group's
financial performance compared to the prior comparative period. This growth resulted from the Electrical Engineering and Applied Electronics Segments
delivering excellent operational performances on the back of improved demand for their products and services.
Group results
The Group's revenue increased by 21% to R6,2 billion from R5,1 billion achieved in the six-month period ended 31 March 2022 (H1 FY: 2022), primarily due to
improved cable volumes in the Electrical Engineering Segment, and the growth in sales in the Applied Electronics Segment as demand for renewable energy
products continued to increase and the delivery of the defence export order book accelerated.
The Group generated positive operating leverage from the improved throughput and operational efficiencies in the Applied Electronics and Electrical
Engineering Segments. The ICT Segment delivered results in line with expectations and the guidance provided in the 2022 year end results. The Group's
operating profit includes the benefit of a R44 million preliminary insurance pay-out for the business interruption caused by the COVID-19 pandemic.
Accordingly, the Group's operating profit increased by 33% to R620 million (H1 FY: 2022: R465 million). The Group's profit for the period increased by 32% to
R422 million (H1 FY: 2022: R319 million) with earnings per share and headline earnings per share increasing by 32% and 37% respectively.
At 31 March 2023, all segments continued to have healthy order books and, while both international and local macro-economic conditions pose increased risk,
the Group remains well positioned for the 2023 financial year.
Cash resources and liquidity
Higher sales in the last quarter of H1 FY: 2023 resulted in higher trade receivable balances. This, together with further investment into inventory as the
Group prepares for the execution of the large export and other orders that will be delivered from the second half of the 2023 financial year (H2 FY: 2023)
and into the 2024 financial year, led to the Group increasing its investment in working capital by a further R324 million (H1 FY: 2022: R312 million).
The ongoing cash generation capability of the Group, together with the headroom in its bank funding capacity, provides the financial resources for the
Group's operational and strategic initiatives and dividend payments.
Segment review
Electrical Engineering
The Electrical Engineering Segment continued its recent growth trajectory with a strong performance in H1 FY: 2023 as segment revenue increased by 11% to
R3,2 billion (H1 FY: 2022: R2,9 billion), while segment operating profit increased by 44% to R218 million (H1 FY: 2022: R151 million).
ICT
The ICT Segment delivered results in line with expectations as segment revenue increased by 11% to R1,4 billion (H1 FY: 2022: R1,3 billion) while segment
operating profit increased by 4% to R318 million (H1 FY: 2022: R305 million). The increase in segment operating profit was adversely impacted by the sale of
R250 million of Quince's lease and loan receivables book and reduced minute volume at the Business Communications cluster, due to loadshedding, which offset
an otherwise pleasing performance from the remainder of the ICT Segment companies.
The ICT Segment announced the acquisition of IQbusiness, an independent management and technology consulting firm. This acquisition is subject to the
fulfilment of normal suspensive conditions for a transaction of this nature and approval by the competition authorities. IQbusiness has revenues in excess
of R1 billion and has key competencies in the financial services, retail and telecommunications industries. The acquisition of IQbusiness, when concluded,
will create an expanded service offering and improved technical capabilities for the ICT Segment in the Solutions and Systems Integration cluster.
Applied Electronics
The Applied Electronics Segment had a strong financial performance in H1 FY: 2023 resulting in segment revenue increasing by 49% to R1,6 billion (H1 FY:
2022: R1,1 billion) and segment operating profit increasing by 196% to R163 million (H1 FY: 2022: R55 million).
Prospects
Reunert is well positioned to deliver an improved full year financial performance for 2023. The financial performance for H2 FY: 2023 is, however, not
expected to replicate the rate of growth experienced in H1 FY: 2023 due to the strong financial performance delivered in H2 FY: 2022.
The full year prospect is supported by the level of orders received in both the Electrical Engineering Segment, specifically the Power Cable businesses, and
in the Applied Electronics Segment. These order books support the revenue and margin expectations and position the two segments to continue to perform
strongly in H2 FY: 2023.
The ICT Segment is expected to deliver an improved year-on-year performance on the back of the accelerated growth of +OneX and stable growth from the Total
Workspace Provider and Business Communications cluster.
The Group's cash flow remains a key focus area and is expected to support the execution of both the Group's operational and strategic initiatives and enable
an increased return to shareholders.
Cash dividend
Despite the Group's increased investment into working capital in H1 FY: 2023 and the economic uncertainty, the Group's free cash flow generating capacity
remains intact. Notice is hereby given that a gross interim cash dividend No. 194 of 83,0 cents per ordinary share (March 2022: 75,0 cents per ordinary
share) has been declared by the Board for the six months ended 31 March 2023.
The dividend has been declared from retained earnings.
A dividend withholding tax of 20% will be applicable to all shareholders who are not exempt from, or who do not qualify for, a reduced rate of withholding
tax.
Accordingly, for those shareholders subject to withholding tax, the net dividend amounts to 66,4 cents per ordinary share (March 2022: 60,0 cents per
ordinary share).
The issued share capital at the declaration date is 184 969 196 ordinary shares.
The income tax reference number is 9100/101/71/7P.
In compliance with the requirements of Strate Proprietary Limited and the Listings Requirements of the JSE Limited, the following dates are applicable:
Last date to trade (cum dividend) Tuesday, 20 June 2023
First date of trading (ex dividend) Wednesday, 21 June 2023
Record date Friday, 23 June 2023
Payment date Monday, 26 June 2023
Shareholders may not dematerialise or rematerialise their shares between Wednesday, 21 June 2023 and Friday, 23 June 2023, both days inclusive.
On behalf of the Board
Mohamed Husain Alan Dickson Nick Thomson
Chair Chief Executive Officer Chief Financial Officer
Sandton, 23 May 2023
1 Extracted financial information from the Unaudited Condensed Consolidated Interim Financial Statements for the six months ended 31 March 2023.
Directors
MJ Husain (Chair)*, T Abdool-Samad*, AE Dickson (Chief Executive Officer), LP Fourie (Chair of the Audit Committee)*,
JP Hulley*,TNM Eboka*, RJ Boettger*, S Martin*, Dr MT Matshoba-Ramuedzisi*, M Moodley, NA Thomson (Chief Financial Officer)
* Independent non-executive
Registered office
Nashua Building
Woodmead North Office Park
54 Maxwell Drive
Woodmead, Sandton
PO Box 784391
Sandton, 2146
Telephone +27 11 517 9000
Investor enquiries
Karen Smith
E-mail karens@reunert.co.za.
Sponsor
One Capital Sponsor Services Proprietary Limited
17 Fricker Road, Illovo, 2196
For more information log on to the Reunert website at
reunert.com
24 May 2023 (publication date)
Date: 24-05-2023 01:45:00
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