| Results
achieved during the past year
were excellent. Turnover from
continuing operations grew by
20%, with operating profit increasing
by 30%. Headline earnings per
share on a comparable basis increased
by 31% and dividends per share
by the same amount. Compared to
last year, attributable earnings
exceeded those of Reunert before
the various disposals and the
special dividend of R2,50 a share
which was paid in October 1999.
This clearly vindicates the decision
taken to exit low-margin businesses
which are not core to our strategic
intent. |
| |
|
Reunert
is a high-tech company focusing
more and more on providing total
solutions to our customers.
|
| |
| The
continued lack of spending on
the country's infrastructure impacted
negatively on the results of our
low-voltage engineering operations,
and without any real growth in
the economy the markets served
by our electronics division were
at best sluggish. Increased exports
and market share gains more than
compensated for this and produced
the turnover growth reflected
above. |
| |
| The
telecommunications sector continues
to be bedevilled by regulatory
problems. The controversy surrounding
the award of the third cellular
licence and most recently the
refusal to allow MTN and Vodacom
access to the 1 800 MHz spectrum
does not help the situation. It
is vitally important that South
Africa maintains a strong regulatory
environment to ensure that the
desired level of service and growth
is achieved. Without this we will
hamper economic expansion, education
and international investment.
|
| |
| Although
group exports benefited handsomely
from the weak rand, the long-term
negative inflationary aspect is
concerning. Ultimately, for sustained
economic growth and prosperity,
a stable currency, free of the
last vestiges of exchange control,
is a prerequisite. |
| |
| We
have decided, in line with international
practice, to disclose the performance
of all subsidiaries as well as
associate companies of Reunert.
>From this, it is pleasing to
note that all companies are trading
profitably. |
| |
| It
is true, however, that profitability
alone does not always create maximum
shareholder value. With this in
mind, we have decided to evaluate
future performance of management
using the principle of economic
value added (EVA). Requirements
for producing positive economic
value added are stringent, and
consequently EVA is an excellent
reflection of how effectively
shareholder capital is being managed.
|
|
|
| Social
investment |
| |
| Reunert
continues to support education
for the benefit of previously
disadvantaged scholars. Our flagship
project is the Reunert College,
which bridges the gap between
school and tertiary education.
Over a period of one year, students
are equipped to write the higher
grade examination in mathematics,
science, accounting and English.
Over the years, more than 370
students have graduated from the
college well prepared to further
their studies, specifically in
the engineering field. Reunert
is grateful for this opportunity
to contribute to the future of
our country. |
| |
| Directorate
|
| |
| Con
Schabort resigned from the board
at the end of May after 16 years
of service. My sincere thanks
to Con who served as a member
of the audit committee and made
a valuable contribution to Reunert.
Three new appointments to the
board were made and I would like
to welcome Sean Jagoe, Bobby Makwetla
and Charles Valkin. I look forward
to their participation in the
deliberations of the board.
|
| |
| Future
prospects |
| |
| Reunert
is a high-tech company focusing
more and more on providing total
solutions to our customers. Emphasis
will continue to be on organic
growth supplemented by suitable
acquisitions which meet our criteria
of focus and return. The company
is well positioned for future
growth and I am confident that
shareholders will continue to
be well rewarded. |
| |
| I
would like to express my appreciation
to my fellow directors, the executive
management and the dedicated staff
of Reunert. Particularly I would
like to pay tribute to Boel Pretorius
for his leadership and dedication.
|
| |
|
Derek
Cooper
Chairman
Sandton
15
November 2000
|
| |
|
|
