Reutech to buck earnings trend

Reunert, the diversified industrial group, is warning that half-year results due next month will be down as a result of the global economic implosion. But the company adds its defence business, Reutech, is bucking that trend.
Reunert says all indications are that its half year results for the period ending 31 March will be lower. “Shareholders are advised that earnings per share and headline earnings per share are anticipated to be between 10% and 30% lower than the corresponding reporting period of the previous year.
“Normalised headline earnings per share will be between 10% and 25% lower than the corresponding period. On a full year basis, provided that trading conditions do not deteriorate further, we are reasonably confident that earnings should recover to be in line with those of the previous year.”
Spokeswoman Carina de Klerk says prospects for Reutech, by contrast, are “positive.” De Klerk adds the business, under the stewardship of COO Peter van der Bijl – and previously MD Piet Smit – has “been working for years to get it at this point”.
Reutech consists of Reutech Precision Products (RPS), Reutech Solutions, Reutech Radar Systems (RRS) and Reutech Communications.
·         RPS manufactures the world-renowned range of Fuchs electronic fuses for artillery, mortar, naval and air weapons applications, as well as a full range of aircraft gravity bombs. RPS was formed in 1963 as Fuchs Electronics.
·         Reutech Solutions is a systems engineering and support company. The company provides the full spectrum of installation and logistic support of electronic equipment to the SANDF, government agencies and clients in the banking and mining industries. It also manufactures and supplies the Rogue remote control weapon, which is used for land and naval applications, to the SA military. Reutech Solutions was established in1963 as Barlows Electronic Systems. Barlows (now Barloworld) divested itself of its defence businesses in the 1990s.
·         Reutech Radar Systems (RRS) develops and manufactures ground and naval search and tracking radar systems and subsystems for the SANDF, as well as customers in the export market. Mining radar sensor systems utilised in opencast mining operations are also supplied internationally. Significant contracts secured include the supply of sensors and software for the country’s Ground Based Air Defence System programme, tracking sensors for the Valour-class frigates and more recently, helicopter management radar for the Royal Norwegian Navy. RRS was formed in 1987.
·         Reutech Communications is a supplier of VHF/UHF tactical communications equipment used by the SANDF. Military Airborne radios are also exported to various offshore clients. The company was established as Barcom Electronics in 1968.
Reunert CEO Gerrit “Boel” Pretorius two years ago canned plans to sell the companies. He had put up “for sale” signs in June 2006, saying the defence businesses were “non-core” and not part of his future plans for Reunert.
However, in February 2007 he took the company off the market, saying although “Reutech remains non-core, it would be insane to give away a profitable business”. He added that he had received many offers for the businesses, but none were good enough. 
The division posted good results for the year ended 30 September 2008, contributing R137 million to the group`s operating profit.     
“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 at the time.