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Unaudited interim financial statements and cash dividend declaration for the six months ended 31 March 2025
REUNERT LIMITED
Incorporated in the Republic of South Africa
Registration number: 1913/004355/06
JSE and A2X 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 2025
The contents of this announcement are the responsibility of the board of directors of the Company (the Board). Shareholders are advised that this
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 cloudlink at https://senspdf.jse.co.za/documents/2025/JSE/ISSE/RLO/Interim_25.pdf and on Reunert's website (www.reunert.co.za/reporting-and-
results.php) from 28 May 2025. Shareholders and investors are advised to review the full announcement in making any investment decisions.
SALIENT FEATURES (continuing operations)
31 March 31 March
2025 2024 %
Group revenue (Rm)2 6 218 6 515 (5)
Operating profit (Rm)2 585 697 (16)
Attributable profit (Rm)2 382 470 (19)
Headline earnings per share (cents)2 238 296 (20)
Earnings per share (cents)2 243 296 (18)
Interim dividend per share (cents) 90 90 0
OVERVIEW
Reunert's resilience and its diversified business portfolio assisted in offsetting challenging trading conditions in the six months ended 31 March 2025
(H1 FY: 2025). As anticipated in the Prospects statement, included as part of the 2024 financial year-end results, the Group continued to contend with
deteriorating macro-economic conditions in H1 FY: 2025.
Despite the weakening conditions, the Electrical Engineering and ICT Segments delivered operating profits largely in-line with those achieved in the six-
month period ended 31 March 2024 (H1 FY: 2024), (prior comparative period). However, the:
- deferment of a key fuze contract in the Applied Electronics' Defence Cluster, into the second half of the 2025 financial year (H2 FY: 2025),
- weak South African power cable sales,
- continued underperformance of the battery storage business (which has consequently been classified as held for sale),
- together with the non-recurring nature of the COVID-19 insurance claim proceeds received in H1 FY: 2024,
resulted in the Group's financial results decreasing when compared to the prior comparative period.
GROUP RESULTS
Discontinued operation
The battery storage market continued to be extremely weak. The residential and small commercial battery storage market remained constrained in the absence
of loadshedding, while the large battery storage market experienced slow order receipts and increased competition.
These factors resulted in the Board resolving to dispose of Blue Nova Energy Proprietary Limited (Blue Nova) as it no longer supports the Group's strategic
and financial objectives. In terms of IFRS 5 - Non-current Assets Held for Sale and Discontinued Operations (IFRS 5), Blue Nova has been classified as an
asset held for sale and as a discontinued operation in the current reporting period.
Continuing operations2
The challenging conditions, as described above, resulted in the Group's revenue decreasing by 5% to R6,22 billion (H1 FY: 2024: R6,52 billion), while
operating profit reduced by 16% to R585 million (H1 FY: 2024: R697 million).
The decrease in revenue was primarily driven by a decrease in the Applied Electronics Segment's revenue caused by the deferment into H2 FY: 2025 of the fuze
contract. Revenues in the Electrical Engineering and ICT Segments were in line with those achieved in the prior comparative period.
The decrease in operating profit when compared to the prior comparative period resulted from the delayed defence contract, weak South African power cable
sales and the non-recurring nature of the COVID-19 insurance claim proceeds received in H1 FY: 2024.
CASH RESOURCES AND LIQUIDITY
The Group's cash position remained strong throughout the period. On 31 March 2025, the Group had cash of R1 079 million (31 March 2024: R1 329 million),
offset by external long-term borrowings of R998 million (31 March 2024: R1 298 million), thus being in a net cash position at the end of the period. Cash
generated from operations decreased to R514 million (H1 FY: 2024: R718 million) primarily due to the lower profitability achieved in the current reporting
period. Correspondingly, the positive free cash flow generated for the period decreased to R211 million (H1 FY: 2024: R476 million). While there was a net
investment of R126 million into working capital (H1 FY: 2024: R201 million investment), the current ratio improved to 2,4 times (H1 FY: 2024: 2,2 times).
Cash invested into capital expenditure amounted to R103 million (H1 FY: 2024: R84 million), of which R53 million related to the expansion projects in the
three segments (H1 FY: 2024: R57 million). The Group has significant undrawn banking facilities of R1 875 million available.
SEGMENTAL REVIEW OF CONTINUING OPERATIONS
Electrical Engineering
The circuit breaker business delivered a pleasing performance as increased export sales into Africa and the United States of America supported flat
South African volumes, resulting in an improved performance over the prior comparative period.
The power cable business in South Africa struggled with reduced volumes as investment into electrical infrastructure declined period-on-period. The
business' profitability correspondingly came under pressure during the period, despite a focused and stringent effort in managing operating costs. In
Zambia, the improved performance continued as a better product mix and reduced foreign exchange losses increased profitability, but this was insufficient to
offset the negative impact of the South African power cable business.
ICT
The Solutions and Systems Integration Cluster was negatively impacted by longer order placement cycles as enterprise customers faced weak growth and
volatile market conditions.
The Total Workspace Provider Cluster, under the Nashua brand, had a strong improvement in financial performance and sales were in-line with historic norms
as volumes improved on the back of successful large tender wins and improved port logistics.
The Business Communication Cluster delivered solid growth and, importantly, voice minutes stabilised, whilst the last mile broadband connectivity business
continued its double-digit growth trajectory. The Rental-based Finance Cluster commenced the period with a loan book that was lower than the prior
comparative period and this, coupled with reduced interest rates, resulted in lower revenues. Importantly, the collections improved over the prior
comparative period.
Applied Electronics
Defence
The Defence Cluster's outstanding order book increased during the period under review, reflecting ongoing strong market demand in all the cluster's key
geographies. The radar business progressed well on the execution of its strategic intellectual property co-development contract with a key international
customer, and delivered a strong performance. The deferred fuze contract will be delivered in H2 FY: 2025 and this, together with the healthy order
positions of the cluster, is expected to deliver a much improved full year performance when compared to the prior year.
Renewable Energy
The solar energy business had a pleasing first half as good deal selection, margin management and build rate delivered an improved performance.
PROSPECTS
Reunert expects the transmission grid and related infrastructure projects to only commence in the 2026 financial year. Consequently, the broad South African
macro-economic environment experienced in the first half of 2025 is expected to continue for the remainder of the year.
In this environment, the:
- Electrical Engineering Segment is likely to continue to experience similar production capacity utilisation as in the first half of the 2025 financial year;
- ICT Segment is expected to deliver year-on-year financial growth; and
- Defence Cluster is expected to have a strong second half performance and deliver an improved year-on-year Applied Electronic Segment performance.
As a result of these segment performances, Reunert expects to deliver a significantly improved second half financial result when compared to these interim
results, coupled with free cash flows in line with our historic norms.
Cash dividend
The Group's cash generation continues to be sufficient to meet operational and strategic requirements and support the dividend. Notice is hereby given that
a gross interim cash dividend No. 198 of 90,0 cents per ordinary share (March 2024: 90,0 cents per ordinary share) has been declared by the Board for the
six months ended 31 March 2025.
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 72,0 cents per ordinary share (March 2024: 72,0 cents per
ordinary share).
The issued share capital at the declaration date is 182 665 316 ordinary shares.
Income tax reference number: 9100/101/71/7P.
In compliance with the requirements of Strate Proprietary Limited and the JSE Limited Listings Requirements, the following dates are applicable:
Last date to trade (cum dividend) Tuesday, 24 June 2025
First date of trading (ex dividend) Wednesday, 25 June 2025
Record date Friday, 27 June 2025
Payment date Monday, 30 June 2025
Shareholders may not dematerialise or rematerialise their shares between Wednesday, 25 June 2025 and Friday, 27 June 2025, both days inclusive.
On behalf of the Board
Mohamed Husain Alan Dickson Mark Kathan
Chairman Chief Executive Officer Chief Financial Officer
Sandton, 27 May 2025
1 Extracted financial information from the unaudited condensed consolidated interim financial statements for the six months ended 31 March 2025.
2 The reported comparative results have been re-presented to reflect Blue Nova as a discontinued operation as per IFRS 5.
Directors
MJ Husain (Chair)*, T Abdool-Samad*, RJ Boettger*, GB Dalgleish*, AE Dickson (Chief Executive Officer), TNM Eboka*,
LP Fourie (Chair of the Audit Committee)*, JP Hulley*, KM Kathan (Chief Financial Officer)(appointed 1 April 2025), Dr MT Matshoba-Ramuedzisi*, M Moodley, NA Thomson.
* 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
For more information log onto the Reunert website at
reunert.com
Sponsor
One Capital Sponsor Services Proprietary Limited
17 Fricker Road, Illovo, 2196
28 May 2025 (publication date)
Date: 28-05-2025 12:00:00
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