Revenue increased by 9%, from R4 841 million to R5 288 million, and operating profit increased by 8% from R567 million to R615 million. This was achieved despite a weak economic environment in South Africa and continued subdued demand specifically in the electrical engineering segment. Profit after tax (PAT) declined by 16%, from R448 million to R377 million. The decline in PAT was impacted by two non-recurring items:
| i) | During the prior period, the group successfully defended an action brought by the South African Revenue Service which allowed the group to release a R42 million tax provision resulting in an abnormally low tax charge for that period of 21%; and |
| ii) | In March 2019, the group disposed of its controlling shareholding in Prodoc Svenska AB (Prodoc), the group’s Swedish office automation business. The rationale for this disposal was the consistent low earnings from this business and the weakened strategic alignment of the business with the broader ICT segment strategy. This disposal realised a loss of R44 million. |
Adjusting PAT* for the above non-recurring items, resulted in an increase of 4% in the adjusted PAT (refer to table below), which is a more appropriate reflection of the core performance of the group.
| 6 Months to 31 March 2019 | 6 Months to 31 March 2018 | % Change | |
| PAT as reported | 377 | 448 | (16) |
| Less: impact of release of tax provision | – | (42) | 9 |
| Add: loss on disposal of Prodoc | 44 | – | 10 |
Adjusted PAT* |
421 | 406 | 4 |
| Financial performance group results and key earnings metrics |
Units | 6 Months to 31 March 2019 | 6 Months to 31 March 2018 | % Change |
| Revenue | R million | 5 288 | 4 841 | 9 |
| Operating profit | R million | 615 | 567 | 8 |
| Operating margin | % | 12 | 12 | – |
| Profit for the period | R million | 377 | 448 | (16) |
| Basic earnings per share | Cents | 227 | 275 | (17) |
| Headline earnings per share | Cents | 253 | 275 | (8) |
| Normalised headline earnings per share | Cents | 253 | 276 | (8) |
| * | This pro forma financial information has been prepared for illustrative purposes only in order to provide information on how the earnings adjustments highlighted have impacted on the financial results of the group. Because of its nature, this pro forma financial information may not be a fair reflection of the group’s results of operations and is not intended to comply with the requirements of IFRS. The directors are responsible for compiling the pro forma financial information on the basis of the applicable criteria specified in the JSE Listings Requirements. |
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 |
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Unaudited interim financial statements 2019 - PDF