Defence and electronics group Reunert is warning shareholders that earnings for the year to September will be lower than last year as trading conditions have not improved as expected.
In a Stock Exchange News Service
announcement published on Friday Reunert said “shareholders are advised that earnings per share, headline earnings per share and normalised headline earnings per share are anticipated to be between 17% and 27% lower than the corresponding reporting period of the previous year.”
Reunert last year declared normalised diluted headline earnings per share of 626.9c, a 12% improvement over 2007’s 562c a share. Reunert will publish its year-end results in November.
In the SENS statement Reunert explains its operating businesses have seen a “significant decline in volumes”. Bad debts have more than doubled compared with last year, and restructuring costs also hammered the company.
In addition, it had losses after selling the Panasonic consumer electronics business and has been hampered by the higher cost of copper, it says.
From 1 April, Panasonic Japan started distributing consumer products directly to the South African consumer market.
Companies are obliged by JSE rules to alert shareholders as soon as they are aware earnings will differ by 20% from the previous period.
The statement made no mention of Reunert`s defence business, Reutech.
Company spokeswoman Carina de Klerk says Reutech has bucked the trend and will post stronger second half earnings on the back of exports.
The company in May said Reutech’s operating profit for the first semester was down 23% to R50 million.
But Reunert chief executive Gerrit Pretorius was upbeat on Reutech`s prospects for the full year and described the first six months as a period of preparation.
Deliveries of unspecified “significant contracts” commenced in the second quarter and are now in full swing.
“Favourable exchange rates have been locked in for the remainder of the financial year. Reutech is expected to perform well ahead of last year,” he added.
Reutech consists of Reutech Precision Products (RPS), Reutech Solutions, Reutech Radar Systems (RRS) and Reutech Communications.