Reutech revenue roars

1834

Revenue at Reutech, the defence business in the diversified Reunert group, is up 37% to R386 million for the first six months of the company’ current financial year.

But the strong rand reduced operating profit by 58% to R21 million mainly because of a mark-to-market loss of R6 million in respect of foreign currency holdings (versus a gain of R28 million in the comparable period), the group says in a statement announcing first half results.

In its annual report released in December, Reunert said the prospects for Reutech, were good, “although results may not be as strong as 2009.” The report added Reutech “had a bumper year” for the period to September 30 with revenue growing by 40% to R874 million and operating profit increasing by 55%. “The anticipated award of certain key long-term local orders will, over the next three to five years, lead to a more balanced distribution between its local and export business. All exports were repeat business and in many instances, we have supplied the same product to the same customer for more than five years; which is a good situation,” the report added.

In its latest results, released yesterday, Reunert has declared an interim cash dividend of 67 cents per share, up 3% on last year. The balance sheet for the whole group remains strong with available cash of R1.4 billion. A higher tax rate reduced the growth in normalised headline earnings to 3% (238,9 cents per share).
“Our improvement in operating profit is mainly due to effective management actions taken a year ago to counter the lack of demand in the market,” Reunert chief executive Gerrit Pretorius said. “Our businesses are appropriately sized for current levels of demand and we have sufficient capacity to take advantage of any improvement in the economy.” Pretorius is optimistic on the future. “Assuming stable economic conditions and given no surprises, Reunert’s second half performance should be better than that of the first half,” he said.



Pic: The Reutech Radar Systems Spider