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HOWDEN - RESULTS - PRESS RELEASE

Release Date: 22/01/1998 15:04
Code(s): HWN
Wrap Text

HOWDEN AFRICA RESTRICTS DECLINE IN PRE-TAX PROFIT TO 1.5% DESPITE WEAK MARKET AND RESTRUCTURING COSTS
HOWDEN AFRICA HOLDINGS LIMITED, THE LISTED SPECIALIST AIR AND GAS HANDLING EQUIPMENT GROUP, PERFORMED SATISFACTORILY IN THE SIX MONTHS TO OCTOBER 1997, RESTRICTING THE DECLINE IN ITS INTERIM PRE-TAX PROFIT TO 1.5% IN THE FACE OF DIFFICULT TRADING CONDITIONS AMID TOUGHER THAN EXPECTED ECONOMIC CONDITIONS. THE RESULTS INCLUDE THE COST OF RESTRUCTURING AND CONSOLIDATING THE PUMP COMPANIES. AN INTERIM DIVIDEND OF FOUR CENTS PER SHARE HAS BEEN DECLARED. THE FINANCIAL YEAR END HAS BEEN CHANGED TO DECEMBER TO CONFORM WITH THE YEAR END OF THE MAJORITY SHAREHOLDER CHARTER PLC. THE NEXT REPORTING PERIOD WILL BE FOR THE EIGHT MONTHS TO DECEMBER 31,1997. RESULTS FOR THIS PERIOD WILL BE PUBLISHED IN MARCH 1998.
GROUP OPERATING PROFIT WAS R 15.3M FOR THE SIX MONTHS TO OCTOBER, 31,1997, COMPARED WITH R 17M FOR THE COMPARABLE PERIOD IN 1996, WITH CONTRIBUTIONS FROM THE FANS AND HEAT EXCHANGER BUSINESS IN LINE WITH LAST YEAR'S. THE CONTRIBUTION FROM THE AIR AND GAS CLEANING SECTOR IMPROVED, AND THE RESTRUCTURING OF THE PUMP BUSINESS, WHICH IS NOW COMPLETE, SHOULD SHOW BENEFITS IN THE 1998 FINANCIAL YEAR.
EARNINGS PER SHARE WERE LOWER AT 16.25 CENTS (1996:20.05 CENTS), WHILE NET ASSET VALUE PER SHARE INCREASED TO 188.8 CENTS FROM 164 CENTS.
GROUP CHIEF EXECUTIVE JOHAN VAN DEN BERGH SAID THAT THE PROSPECTS FOR THE FANS AND HEAT EXCHANGER BUSINESS WERE PROMISING, WITH FURTHER ORDERS FOR THE DUST EXTRACTION SYSTEMS EXPECTED FROM THE COAL MINING INDUSTRY AS WELL AS MAIN SURFACE FANS FOR THE COPPER MINES.
ORDERS FROM THE POWER GENERATION INDUSTRY ARE BUOYANT AND EXPORT MARKETS IN SUB-SAHARAN AFRICA ARE BEING DEVELOPED.
"THE OUTLOOK IS POSITIVE FOR THE AIR AND GAS CLEANING BUSINESS, WITH GOOD PROSPECTS IN THE LOCAL AND EXPORT MARKETS FOR FABRIC FILTER PLANT AND MELTING FURNACES FOR THE IRON AND STEEL INDUSTRY, WHERE A NUMBER OF PROJECTS WHICH COULD SUBSTANTIALLY BOLSTER THE ORDER BOOK ARE TARGETED."
"PROSPECTS ARE ALSO GOOD FOR THE PUMPS AND REFRIGERATION BUSINESS WITH MAJOR CONTRACTS ON THE HORIZON IN THE GOLD MINING INDUSTRY FOR SURFACE WATER CHILLERS. THE REDUCED COSTS FOLLOWING RESTRUCTURING OF THE PUMP BUSINESS, COUPLED WITH THE DEVELOPMENT OF NEW MARKETS, SHOULD RESULT IN GROWTH IN TURNOVER AND PROFITABILITY."
"ALL IN ALL, THE DIRECTORS REMAIN CONFIDENT ABOUT THE GROUP'S PROSPECTS AS WE CONTINUE TO PAY CLOSE ATTENTION TO TIGHT COST CONTROLS TOGETHER WITH THE DEVELOPMENT OF EXPORTS WHICH ARE EXPECTED TO GROW, PARTICULARLY IN THE UNITED ARAB EMIRATES, THE REST OF AFRICA, SOUTH AMERICA AND THE PACIFIC BASIN, DESPITE DIFFICULT ECONOMIC CONDITIONS," CONCLUDED JOHAN VAN DEN BERGH. ENDS

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