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Johannesburg - Amalgamated Appliance corporation (Amap)
has reported a 46.9% rise in diluted headline earnings per share to 42.3 cents
for the year ended June from 28.8 cents a year ago.
The capital distribution increased by 41.7% from 12 cents to
17 cents.
Revenue increased by 20.5% to R995.7m‚ while operating
profit grew 21.7% to R84.0m.
The company said that in the face of slow economic growth
due to weaker external demand‚ slower consumer spending and capital formation
by the private sector‚ the strength of Amap's brands continued to deliver‚ with
its brands across all categories growing market share.
Key acquisitions were bedded down and began contributing to
the bottom line‚ but are expected to only fully contribute in the forthcoming
financial year.
The group has established a strong foothold in 15 African
countries and is targeting to generate 10% of total revenue outside South
Africa's borders by June 2014. Economies in sub- Saharan Africa have been
negatively affected by weaker global demand and lower commodity prices‚
however‚ they proved to be more resilient than SA's economy.
Having restructured and established a solid foundation for
growth‚ the company has the opportunity to refresh its trading name. Its
wholly-owned subsidiary‚ Tedelex Trading‚ will be changing its name to
"Home of Living Brands.
“We believe this represents the evolution of Amap and‚ in
line with this change‚ we will propose at the Annual General Meeting that
Amap's name be changed to "Home of Living Brands Group Limited"‚ it
said.
The company also announced that effective 26 September‚ a
wholly-owned subsidiary has concluded an agreement to extend its rights to the
Russell Hobbs licence to include all categories of goods‚ other than batteries
and pet products‚ and all countries in sub-Saharan Africa and the Indian Ocean
Islands. These extended rights will apply for a period of 18 years and
thereafter Amap will purchase and acquire the Russell Hobbs trademark for all
categories in these areas.
In order to maximise the effect of the amended Russell Hobbs
licence agreement‚ and to expand sales‚ Amap has entered into a consultancy
agreement‚ with Applica Consumer Products Incorporated USA‚ who will assist
Amap in the short to medium term with the necessary marketing support and
category information. The value of these consultancy services is R51m.
Amap believes that these transactions present a substantial
opportunity to increase its current market share in the new categories of
goods‚ as well as increase its penetration into sub-Saharan Africa and the
Indian Ocean Islands as part of its export drive.
Looking ahead‚ the company said GDP growth in SA is expected
to be around 2.5% for 2012‚ resulting in limited growth in retail sales in SA
in the categories in which it currently operates. It does‚ however expect
continued growth in Africa.
“While the economic and political outlook for the year ahead remains challenging‚ macro- economic fundamentals are unlikely to change significantly. However‚ Amap has trusted brands in its portfolio which makes for an enviable business mix creating a solid investment for shareholders. Our strong portfolio of brands is backed up by having the right people capable of tackling the challenges ahead. We plan to carry the momentum in market share growth and targeted cost reductions into the next financial year. We are confident that our strategy will continue to generate growth in normalised earnings going forward‚” it said.
