Unaudited condensed consolidated interim financial statements and cash dividend declaration for the six months ended 31 March 2021

Group profile

Reunert 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.



Reunert’s financial results for the six-month period ended 31 March 2021 (H1FY:2021) improved significantly compared to the comparative period ended 31 March 2020 (H1FY:2020), although the recovery of operating profit to pre-COVID-19 levels continued to be adversely affected by the reduced economic activity associated with the pandemic.

Pleasingly, the Group’s segmental operating profit before impairment of financial assets increased by 14% to R448 million (H1FY:2020: R392 million) largely in line with the guidance provided in the annual results for the year ended 30 September 2020. The H1FY:2021 results include a good recovery in profitability in the Electrical Engineering Segment, with the Information Communication Technologies Segment performing in line with expectations. The Applied Electronics Segment was negatively impacted by lower than anticipated export sales and a stronger Rand. Our Group companies have fully adjusted to the new operating conditions required by COVID-19 and are operating smoothly, albeit at slightly lower volumes than the comparative period.

A significant improvement in profit attributable to Reunert shareholders to R313 million (H1FY:2020: loss of R277 million) was achieved. Revenue increased by 11% to R4 614 million (H1FY:2020: R4 144 million).

The Group has continued to deliver on its programme of operational efficiencies and execution of
its strategy. Post the end of the current reporting period, the Solutions and Systems Integration Cluster in the Information Communication Technologies Segment has concluded strategic acquisitions in the cloud and custom software areas. The Total Workspace Provider Cluster continued its investment and growth in complementary services. There was a significant increase in investment in build, own, operate (BOO) solar assets in our renewable energy business and the Group reduced its ownership
in the cable business in Zimbabwe.

The Group also commenced a share buyback programme during H1FY:2021 and at the date of publishing, 1.3 million shares had been repurchased for a consideration of R65 million.

Key earnings metrics
    Six months ended 31 March
2021 20202 % change Year ended
30 September
Revenue Rm 4 614 4 144   11 8 046
Segmental operating profit 1 Rm 448 392   14 871
Operating profit/(loss) Rm 436 (155)  381 307
Profit/(loss) for the period Rm 311 (326)  195 7
Earnings/(loss) per share cents 194 (172)  213 29
Headline earnings/(loss) per share cents 193 (76)  354 115
Interim/total cash dividend
per share
cents 70 65   8 257
1 Per segmental analysis here.
2 The comparative period information has been re-presented to align with the presentation in the Annual Financial
Statements for the year ended 30 September 2020.


Electrical Engineering (EE) Segment

Despite continued weak cable infrastructure demand, particularly for medium and high-voltage energy cables, this segment’s revenue increased by 47% to R2 561 million (H1FY:2020: R1 738 million), largely due to an uninterrupted half year of production at African Cables (H1FY:2020: African Cables suffered a seven-week labour dispute, resulting in no production during this period), the pass-through of increased copper and other commodity prices and the substantial increased demand for circuit breakers. This segment’s operating profit recovered to R165 million (H1FY:2020: loss of R34 million).

The energy cable and telecommunications cable plants all achieved a better than break-even result, a substantial improvement on the significant operating losses of H1FY:2020. This was the realisation of the prior year’s cost and production efficiency programmes. The reduced cost base of these plants enabled these businesses to recover all fixed overheads at the current lower levels of market demand. This bodes well for the future when the expected infrastructure programme announced by the South African government is finally initiated and demand recovers to more normal levels.

Throughput volumes have been increased at the Group’s Zambian energy cable business, as certain of the long outstanding receivables due by the Zambian Government were settled in the 2020 financial year, providing the cash needed to finance the increased working capital requirements. Unfortunately, despite commitments to the contrary, there have been no additional settlements of these Government receivables in the current financial period, leaving the balance outstanding at ZMW96 million (H1FY:2020: ZMW228 million).

The circuit breaker business delivered excellent performance for the current reporting period. Both export volumes and local demand increased significantly from the comparative period. This increase in demand was driven by customer adoption of new product innovation in the export markets and increased production required to meet an improved market share in the local market.

Information Communication Technologies (ICT) Segment

The ICT Segment’s revenue declined by 16% to R1 253 million (H1FY:2020: R1 494 million), reflecting the ongoing impact of the COVID-19 pandemic on the South African economy and on the segment’s customer base and the impact of lower interest rates on Quince. Correspondingly, the segment’s operating profit declined by 24% to R293 million (H1FY:2020: R384 million) which is in line with the guidance provided by the Group in the annual results for the year ended 30 September 2020.

The Total Workspace Provider Cluster’s performance was adversely impacted by the general economic climate resulting from the COVID-19 regulations on key customer sectors in education, tourism and hospitality which prevented them from returning to normal trading. This negatively impacted the cluster’s ongoing service revenue from the customers in these segments.

Despite this, the cluster continued to make good progress in its strategy of becoming a Total Workspace Provider to its customer base. Accordingly, the number of complementary offerings supplied per customer continued to increase. This trend is expected to gain further momentum as customers increasingly look to digital solutions to provide business efficiency and enable communication with their employees, customers and suppliers under the emerging hybrid models under which businesses are returning to work.

The Business Communication Cluster continued to increase the number of customers serviced and, in the case of SkyWire, the geographic regions its network covers. This cluster was also impacted by the reduced business activity in the education, tourism and hospitality sectors for the reasons outlined above, as well as the consequences of the general reduction in overall economic activity on the number of minutes consumed per customer. The cluster’s drive into diversified product offerings continues to offset the impact of reduced minutes per customer consumption.

In the period under review, the Finance Cluster focused on enhancing the financial and credit controls embedded in its operations. It also completed the comprehensive assessment and validation of its customer base and, positively, there was no requirement to raise any further credit write-offs or expected credit losses. The loan and rental book now stands at R2 753 million (H1FY:2020: R2 878 million) reflecting the lower level of activity in the Office Automation Segment.

Plus 1X Solutions (+OneX), established in the Solutions and Systems Integration Cluster to provide digital consulting, cloud, data, security and managed services, is making good progress in acquiring the intellectual property, licences and human skills required to provide this suite of services. Post the current reporting period end, two complementary bolt-on acquisitions were completed to build out +OneX’s service capability to include the provision of private hosted cloud services and data consultancy.

Applied Electronics (AE) Segment

The AE Segment’s revenue declined by 9% to R945 million (H1FY:2020: R1 038 million). Operating profit declined by 65% to R32 million (H1FY:2020: R92 million).

This decline in performance was primarily due to:

The COVID-19 pandemic resulted in international travel bans and local lockdowns in most of the countries to which the segment exports. This significantly impacted the Group’s ability to complete contractual obligations associated with export orders, demonstrate products to customers and to conclude new contracts. Every effort was made to carry out these vital activities using alternative meeting platforms, however, these mediums do not address all installation issues and not all contractual negotiations can be resolved virtually.

The above factors impacted our major export businesses of Reutech Communications, Reutech Radar Systems and Fuchs Electronics.

The Renewable Energy Cluster continues its positive trajectory. The performance in this current reporting period was negatively impacted by delays in customers committing to capital investments and access to sites during the second wave of the COVID-19 pandemic. However, business confidence is recovering, and Terra Firma Solutions and Blue Nova have a strong pipeline of committed projects for the second half of the year.

Update on the Company Secretarial Function

The resignation of Ms Karen Louw from Reunert Management Services, the Company’s registered Company Secretary was announced on 4 September 2020. Due to the restrictions imposed by COVID-19, Ms Louw has not been able to emigrate as planned and her resignation from the Group has been postponed. Therefore, Ms Louw continues to serve as the Group Company Secretary.


Reunert has continued its recovery from the impact of COVID-19 and all businesses have fully adjusted to our new operating conditions. The improvement in performance in the EE Segment is expected to be sustained into the second half of the year and the ICT Segment should continue to deliver in line with its recent performance as the economy continues to improve. The AE Segment is expected to deliver an improved second half, based on the export orders on hand together with the forecast contribution from the renewable energy businesses.

The Group’s performance is expected to remain robust thereby ensuring the generation of sufficient free cash flow to support the Group’s growth and re-investment requirements, whilst also supporting cash returns to shareholders.

Some economic uncertainty regarding our H2FY:2021 performance remains, as the third wave of COVID-19 in South Africa is expected to develop during this period and several of our key export markets continue to battle the pandemic, which may negatively impede our ability to fulfil export orders.

Despite the uncertainties, the FY2021 performance remains likely to exceed that of the FY2020.

Cash dividend

Notice is hereby given that a gross interim cash dividend No. 190 of 70 cents per ordinary share (March 2020: 65,0 cents per ordinary share) has been declared by the directors for the six months ended 31 March 2021.

The dividend has been declared from retained earnings.

dividend withholding tax of 20% will be applicable to all shareholders who are not exempt from, or who do not qualify for, a reduced rate of withholding tax.

Accordingly, for those shareholders subject to withholding tax, the net dividend amounts to 56 cents per ordinary share (March 2020: 52,0 cents per ordinary share).

The issued share capital at the declaration date is 184 969 196 ordinary shares.

In compliance with the requirements of Strate Proprietary Limited and the Listings Requirements of the
JSE Limited, the following dates are applicable:

Last date to trade (cum dividend) Tuesday, 22 June 2021
First date of trading (ex dividend) Wednesday, 23 June 2021
Record date Friday, 25 June 2021
Payment date Monday, 28 June 2021


Shareholders may not dematerialise or rematerialise their shares between Wednesday, 23 June 2021
and Friday, 25 June 2021, both days inclusive.

On behalf of the Board of directors

Trevor Munday
Alan Dickson
Nick Thomson
Chair Group Chief Executive Officer Group Chief Financial Officer

Sandton, 25 May 2021