Group revenue increased by 2% to R10 714 million (FY181: R10 492 million). Group operating profit (“operating profit”) declined by 12% to R1 361 million (FY18: R1 542 million) primarily due to the quantum of once-off items included in the prior year and the decline in the Electrical Engineering (EE) segment’s contribution in the current year.
Consistent with the prospects outlined to shareholders in the 2019 interim results, both the Information, Communication and Technology (ICT) and Applied Electronics (AE) segments have delivered positive growth in their core operating profit2. The reduction of the EE segment’s core operating profit in 2019 is due to lower electrical infrastructure spend, particularly by Eskom and municipalities. As a result, the Group’s core operating profit reduced by 6%.
In addition, R40 million of plant & equipment and R57 million of goodwill at Zamefa was impaired. This was due to the unexpected change in the duty regime in Zambia which negatively impacts Zamefa’s future gross trading margin and resulted in the impairments being required. This is despite the expected improvement in Zamefa’s cash flow resulting from the zero rating of copper cathode for VAT purposes, which was announced at the same time.
| 1 | FY18 = Financial Year ended 30 September 2018. |
| 2 | Core operating profit comprises operating profit adjusted for the impact of once-off items such as profit or loss on disposal of assets and contingent considerations which do not realise as the measurement criteria are not met (see table below). |
|
Measurement Criteria |
2019 | 2018 | % Change | |
|
Revenue |
Rm |
10 714 |
10 492 |
2 |
|
Operating profit |
Rm |
1 361 |
1 542 |
(12) |
|
Profit for the year |
Rm |
804 |
1 152 |
(30) |
|
Earnings per share |
cents |
490 |
717 |
(32) |
|
Headline earnings per share |
cents |
573 |
703 |
(19) |
|
Normalised headline earnings per share |
cents |
578 |
687 |
(16) |
|
Total cash dividend per share for the year |
cents |
513 |
493 |
4 |
Group profileReunert comprises a diversified portfolio of businesses in the fields of electrical engineering, information communication technologies (ICT), and applied electronics. The group was established in 1888, by Theodore Reunert and Otto Lenz, and has contributed to the South African economy in numerous ways. Reunert was listed on the JSE in 1948 and is included in the industrial goods and services (electronic and electrical equipment) sector of the JSE. The group operates mainly in South Africa with minor operations in Australia, Lesotho, Mauritius, the USA, Zambia and Zimbabwe. Reunert’s offices are located in Woodmead, Johannesburg, South Africa. |
Incorporated in the Republic of South Africa |
|
Audited preliminary summarised consolidated results and dividend declaration 2019 - PDF