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Send  Print  Share  RSS  Twitter  17 Nov 2010

JSE Results: Reunert

 

Johannesburg, Nov 17 (I-Net Bridge) - Electrical engineering and electronics
group Reunert (RLO) on Wednesday reported diluted headline earnings per share of
501.1 cents for the year ended September 2010 from 646.2 cents previously.

Its diluted earnings per share declined to 498.8 cents from 646.9 cents
earlier.

Revenue increased to 10.68 billion rand from 10.27 billion rand, with
operating profit at 1.22 billion rand from 1.14 billion in 2009.

Reunert declared a final cash dividend of 220 cents from 188 cents
previously.

"Following the worst financial crisis the global economy has experienced
in the post war period, this year was always going to be challenging," the group
said.

It said that the strong rand cost the group more than 50 million rand in
lower revenue and margins.

Reunert said that its CBI-electric businesses produced strong results for
the year with operating profit up by 24%. Revenue was flat mainly as a result of
lower activity in the telecommunications cable joint venture.

"Building activity remained subdued but increased exports to Europe and
Asia and the return to profitability of our Australian operations helped our
low- voltage operation to be significantly up on the previous year," the group
said.

Revenue for Nashua was boosted by the inclusion of Nashua Communications
from November 1 2009, which enabled Nashua to achieve 9% growth. Operating
profit was up by 19% due to increased revenue, cost control and profit
contributed by Nashua Communications.

"Nashua Office Automation gained market share, which at 21%, is
comfortably ahead of their closest competition. Unit sales grew by 20%, assisted
by the strong rand and lower interest rates. "The weakening of the euro against
the dollar assisted in making our product more competitive. We are now an HP
preferred partner and this has increased the range of products we offer,"
Reunert said.

It said that Nashua Mobile was able to increase ongoing revenue by 6% due
to a strong sales drive and a net gain of 96,000 connections was achieved for
the year. The total contract base now stands at 819,000 customers which is a 13%
increase over the prior year.

"Our sales force is supported by a network of 149 outlets nationwide," it
said.

Reunert said that significant reductions in data tariffs had been
prevalent over the last year.

"Interconnection rates were reduced on March 1, 2010 with further
reductions to occur up to 2013. The increased focus on retail customers and the
reduction in data tariffs has reduced average revenue per user by 5% to 463
rand.

"Despite the refocusing at Nashua Electronics the business has continued
to produce disappointing results. Kyocera Mita products have been added to the
office systems product range which, together with further restructuring, should
improve performance in the year ahead," the group said.

It added that Nashua's financing operation, Quince, "had another
difficult year," although by year-end impairments had settled to more normal
levels.

It said that the substantial contribution by Reutech in the previous
year was not repeated. Reutech's operating profit decreased by 73% from 223
million rand to 61 million rand. Revenue was down 13% from 904 million rand to
791 million rand.

"The contribution from Fuchs was significantly down for the year as a
result of a large follow-on order anticipated not being received during the
year. The prospects for receiving this order are good and we hope that we will
be successful in 2011.

"The remaining businesses in the division performed to expectation and
are well positioned for the years ahead," Reunert said.

Looking ahead the group said that the economy is in a delicate state with
lower interest rates encouraging growth.

"However, the strength of the rand is of serious concern with increased
imports and reduced export opportunities hampering growth.

"Subject to the prevailing economic conditions remaining unchanged, the
group predicts an increase in earnings for the year ahead," it concluded.

End

I-Net Bridge, Tel: +27-11-280-0693, newsdesk@inet.co.za

Copyright 2010 I-Net Bridge. All rights reserved.


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