Reutech, the defence division of listed electronics conglomerate Reunert, has met CEO Gerrit “Boel” Pretorius’ expectations for the financial year to 30 September and has contributed R137 million to the group’s operating profit.
Reunert released its financial results to the investor community this morning.
A company release to the Stock Exchange News Service and the media notes that normalised headline earnings per share are up 10% and that a dividend of 241 cents per share is now due to shareholders.
Reunert has also increased revenue and operating profit for the eighth year in a row, Pretorius says, despite turbulent markets and growing economic uncertainty.
Revenue increased by 14% to R10.92 billion. On a like-for-like basis, operating profit increased by 9%, Pretorius avers.
“The reported number of R1.57 billion, which is an increase of 19%, includes R139 million commission earned on our 40% investment in Nokia Siemens Network South Africa (NSN),” Pretorius, pointed out.
Normalised headline earnings improved by 11% to R1.12 billion. On a per share basis, normalised headline earnings increased by 10% to 630.1 cents. “Reunert`s profit was underpinned by strong cash flows,” Pretorius adds, saying that excluding borrowings associated with its finance activity, the group had R782 million of cash at year end.
Given the uncertain economic and liquidity landscape the board has decided to increase the dividend cover to two times from 1.8 times.
A final dividend of 241 cents per share has been declared, which together with the interim dividend of 78 cents per share, makes a total distribution of 319 cents per share (2007: 314 cents).
Reutech
Reutech Precision Products, with its range of Fuchs fuzes, “in particular did well and secured orders stretching into the 2010 financial year”, the company says.
“The communications business (Reutech Communications) with its VHF/UHF radios continues to benefit from long standing local and international relationships. Exports are brisk and will continue to grow.”
Reutech has also benefitted from government`s digital terrestrial television migration (see ITWeb for more on this programme). Pretorius says the Department of Communication is in the process of converting the country`s terrestrial analogue television broadcasting to a digital format.
“The radar systems business (Reutech Radar Systems) in Stellenbosch has developed a set-top-box product and limited deliveries have started.
“We are confident that we will participate in the migration to digital television broadcasting with the market conservatively valued at R7 billion spread over a four to five year period.
“The mining surveillance radar systems gained a strong foothold in most of the major mining groups – locally as well as overseas” Pretorius says.
“Our defence arm is strong, well positioned in focused areas and engaged in long-term development programs that will ensure future revenue streams. We expect Reutech to contribute strongly in the New Year,” Pretorius said.
