Revenue at Reutech, the defence division of the JSE-listed Reunert group, is down 20% for the first six months of the current financial year due to the failure of an unidentified client to place an expected order.
Revenue for the semester ending March is R308 million with operating profit decreasing by 35% to R14 million. “The contribution from Fuchs was significantly down for the period due to the non-receipt of an export order, which is still expected during the year. The remaining businesses in the division performed as expected,” the company said in a trading statement.
At group level, Reunert CE Nick Wentzel was pleased to report a 9% increase in normalised headline earnings per share to 260.7 cents from 238.9 cents achieved in 2010. Revenue increased by 2% despite the group’s decision to exit the consumer business of Nashua Electronics. A continual
focus on productivity improvements increased margins enabling the group to grow operating profit by 4% to R604 million.
Basic earnings increased by 97% due to the profit of R346 million realised on the sale of the Nokia Siemens Networks shares. “Headline earnings per share growth of 18% was notably due to the one-off charge of R34 million for the BEE (black economic empowerment) transaction completed in Reutech in 2010 not being repeated this year, and the buyback of 19.2 million shares. Reunert ended the six months with available cash of R1.3 billion after the buyback of shares to the value of R1.1 billion, offset by the sale of its 40% stake in NSN for R794 million.
“Should the current market conditions continue Reunert’s second half performance can be expected to exceed that achieved in the first six months and earnings should increase,” Wentzel added.