Johannesburg - Diversified industrial company KAP
International Holdings [JSE:KAP] on Tuesday reported diluted headline earnings
per share of 24.7 cents for the year ended June 2011 from 21.0c a year ago.
HEPS from continuing operations rose to 32.7c from 22.7c.
Revenue from continuing operations was 10% higher at
R4.22bn, while operating profit before restructuring costs improved by 34% to
R265.9m.
A capital distribution of 10c per share was declared.
KAP has interests in a portfolio of diverse manufacturing
businesses, including processed meat, maize milling, leather products,
footwear, bottle resin, automotive products and towelling products. The group
is operationally focused through an industrial (Feltex automotive, industrial
footwear and Hosaf) and a consumer segment (Bull Brand Foods, Brenner Mills,
Jordan & Co and Glodina).
CEO Paul Schouten described the results as a "good
reflection of the strategy we've driven over the last three years."
Schouten added the company had identified what needed to be
done and acted on it.
"We disposed of underperforming operations - Hosaf sold
its polyester staple fibre business in Cape Town - and we significantly reduced
our interest bill. Net interest-bearing borrowings decreased from R325.6m in
2010 to R134.6m, leaving us with a year-end interest bearing debt/equity ratio
of 9.1%."
Chief Financial Officer John Haveman added: "Our
earnings are up and our current cash flow puts us in a strong position. Not
only have we declared a final capital distribution of 10c per share, but the
divisions are able to grow both organically and through acquisitions over the
next 12 months."
Schouten said the outstanding performance by Hosaf validated
their decision in 2009 to increase production capacity. Increasing market
penetration and growth has been helped by favourable market conditions plus
rising commodity prices over the period.
Favourable gearing levels have also resulted in a lower
interest cost for the period.
Haveman confirmed that the board was satisfied with the
performance of the group. Feltex Automotive, coming off a low base in 2009, did
well considering South African vehicle sales are showing a disturbing trend
towards imported vehicles. Feltex employed another 200 people in this sector
this year.
Cheap imports and the fact that South African consumers are
under pressure hit Bull Brand hardest.
Brenner Mills held its own in a tough food produce market
and Jordan, the shoe division, managed to increase sales.
Despite the impact of a 400% rise in cotton prices and the
slowdown in consumer spending, Glodina managed to increase its operating profit
by reducing expenses by 10 % and investing in capital upgrades to ensure that
efficiencies improve.
Overall, KAP has achieved the objectives it set in 2008 and
is confident in continued growth. Its cost base has remained low, leaving the
company well positioned to capitalise on opportunities that may arise, it
concluded.