| |
| COMMENT |
| |
The past year has been a good
one for Reunert. The continued strong domestic
economy saw revenue increase by 17% to R8,2 billion
while operating profit grew by 39% to R1,3 billion.
Gross margins remained reasonably constant and
the higher percentage growth in profit compared
to turnover was achieved by containing the increase
in overheads to under 8%.
For the past few years cash flow has been consistently
strong, leading to the decision to declare a special
dividend of R2,00 per ordinary share in August
2006. |
| |
| Review of operations |
| ELECTRICAL ENGINEERING |
The consolidation of the three
businesses under one brand, CBI-electric, was
completed during the year and officially launched
in June. Revenue rose 30% to R2,6 billion with
operating profit growing by 66% to R552 million.
The order book for energy cables remains strong,
supported by the increasing spend on infrastructure.
Capital expenditure has expanded capacity and
improved operating efficiency.
A significant sales increase in telecommunications
cables was recorded in the year, which led to
a strong profit recovery. Agreement has been reached
with Aberdare, subject to Competition Commission
approval, to acquire the assets of Aberdare’s
telecommunications cable businesses in exchange
for a 50% share in a new company which will be
a joint venture between ATC and Aberdare. The
additional capacity acquired will enable the company
to meet anticipated strong demand for both copper
and fibre optic telecommunications cables in Africa.
The low-voltage business performed well and continues
to make progress in export markets, particularly
in Europe. |
| |
| ELECTRONIC PRODUCTS
AND SERVICES |
Overall,operating profit grew
by 20% to R862 million on the back of a 15% increase
in turnover to R6,9 billion.
Nashua Office Automation and Nashua Mobile both
achieved real sales growth and improved profitability.
In the face of continuing price deflation and
fierce competition the consumer electronics business
achieved modest sales and profit growth. Siemens
Telecommunications reported strong sales growth
during the year. Siemens worldwide recently announced
that they will be merging its telecommunications
business with Nokia on 1 January 2007. This will
present opportunities and challenges for the business
going forward. The defence businesses reported
improved profitability from a low base and both
their existing order books and prospects are better
than a year ago. A process was initiated during
2006,which could result in some or all of the
businesses being sold. |
| |
| SUBSEQUENT EVENTS |
In a deal valued at R1,1 billion,
Reunert agreed, subject to shareholders’
approval, to sell about 10% of Reunert in a BEE
transaction. 30% of the 10% will be acquired by
a women’s group made up of Peotona’s
founding members. The remaining 70% of the 10%
will be acquired by a broad-based education trust.
Reunert will have achieved a BEE shareholding
of approximately 10% which includes a staff scheme
to be introduced. Full details are provided in
a transaction announcement which is being released
simultaneously with this publication. Reunert
is pleased with this transaction, which confirms
its commitment to transformation, and is confident
that the transaction will be value-enhancing.
Reunert recently announced the establishment of
a joint venture finance company with PSG, subject
to the fulfilment of certain suspensive conditions.
Reunert is contributing its stake in RC&C
Finance for 49,9% of the new company, while the
PSG Group will own 39,9% and other minority shareholders
10,2%. In aggregate they will contribute R375 million
in cash. Reunert is confident that, with new partners,the
company will develop to become a force in asset
financing. |
| |
| Prospects |
Generally, the business climate
is expected to be favourable and most of the group’s
businesses are likely to continue producing real
growth in earnings. The consumer business may
experience slower demand in a higher interest
rate environment.
Overall, the group should achieve real earnings
growth before the one-off charge arising from
the BEE transaction. |
| |
| Reviewed results |
| The above results have been
reviewed by the group auditors, Deloitte &
Touche, and a copy of their unmodified report is
available for inspection at the company’s
registered office. |
| |
| Dividend |
| Notice is hereby given that
final dividend No 161 of 210 cents per share (2005:170
cents per share) has been declared by the directors
for the year ended 30 September 2006. In compliance
with the requirements of STRATE, the following
dates are applicable: |
| Last date to trade (cum
dividend) |
Friday, 12
January 2007 |
| First date of trading
(ex dividend) |
Monday, 15
January 2007 |
| Record date |
Friday, 19
January 2007 |
| Payment date |
Monday, 22
January 2007 |
|
| |
| Shareholders may not dematerialise
or rematerialise their share certificates between
Monday, 15 January 2007 and Friday, 19 January
2007, both days inclusive. |
| |
| ON BEHALF OF THE BOARD |
| |
| Martin Shaw |
Gerrit Pretorius |
| Chairman |
Chief Executive |
|
| |
| Sandton, 20 November 2006 |
| |
| |
| REUNERT LIMITED |
| |
Incorporated in the Republic
of South Africa (Registration number 1913/004355/06)
Share code: RLO
ISIN code: ZAE000057428 |
| |
| Directors: |
MJ Shaw (Chairman)*, G Pretorius
(Chief Executive), BP Connellan*, KS Fuller*,
BP Gallagher, SD Jagoe*,
KJ Makwetla*, KC Morolo*, GJ Oosthuizen, DJ Rawlinson,
Dr JC van der Horst *
*Non-executive |
| |
| Registered office: |
Lincoln Wood Office Park
6 – 10 Woodlands Drive, Woodmead, Sandton
PO Box 784391, Sandton, 2146.
Telephone +27 11 517 9000 |
| |
| Transfer secretaries: |
Computershare Investor Services
2004 (Pty) Limited
70 Marshall Street , Johannesburg , 2001
PO Box 61051 , Marshalltown ,2107 |
| |
| Sponsor:
Rand Merchant Bank (A division of FirstRand
Limited) |
| |
| Secretaries’
certification: |
| In terms of section 268 G(d)
of the Companies Act,61 of 1973,as amended,I certify
that,to the best of my knowledge and belief,the
company has lodged with the Registrar of Companies
for the year ended 30 September 2006 all
such returns as are required by a public company
in terms of the Companies Act and that all such
returns are true,correct and up to date. |
| |
JAFSimmonds
For Reunert Management Services Limited
Company Secretaries
Enquiries: |
Carina de Klerk +27 11 517
9000 or e-mail invest@reunert.co.za.
Hierdie verslag is ook in Afrikaans
beskikbaar. |
| |
| For background information
on Reunert visit our website at www.reunert.com |
| |
