Rolfes up despite recessionary climate

Johannesburg - Manufacturing and technology holding company Rolfes Technology Holdings [JSE:RLF] on Wednesday reported diluted headline earnings per share of 31.2 cents for the year ended June 2011 from 23.2c a year ago - an increase of 34.5%.

Profit for the year grew 35.5% to R32.3m despite the recessionary local and international economic environment, while group revenue increased by 24.8% to R460.7m, due to increased growth in both the Chemicals and Pigments operations.

Gross profit margins decreased to 18.9% from 21% in 2010 due to increased trading activities at lower margins in the Chemicals business as well as a competitive pricing environment.

Operating profit increased by 29.5% to R49.6m primarily due to an increase in gross profit and other income, and overhead cost containment, also resulting in an increase in the operating profit margin to 10.8% from 10.4%. As a result, headline earnings increased by 34.8% to R32.2m.

The Group paid an interim dividend of 5c per share on 22 March and will pay a final dividend of 5c per share on 24 October.

The group has three main divisions - Rolfes Colour Pigments, Rolfes Chemicals and Rolfes Silica.

Looking ahead, the group said local market conditions improved slightly during the 2011 financial year with both the Cape Town and Durban markets responding well to the expanded Rolfes branches.

The European economic climate remained difficult; however, the exports of newly developed organic pigments for the ink industry will continue to grow exports to Europe. Efforts to grow the African market have paid off while trading in Asia remained limited due to fierce local competition.

Rolfes Africa, starting with a regional branch established in Zambia and two other regional branches in Kenya and Ghana in the planning will enhance growth in a market with opportunities for the Group's products on offer.

The current strategic acquisition of a controlling stake in Agchem, a distributor and manufacturer of agro-chemical products, will allow Rolfes to realise its strategy of being able to offer a complete range of chemicals to diverse markets and industries.

The Group will continue to actively pursue new acquisition opportunities in the chemicals sphere, especially in the mining and specialty chemicals sectors.

Rolfes also announced that the notice of the annual general meeting will contain a proposed special resolution to change the name of the company from Rolfes Technology Holdings Limited to Rolfes Holdings Limited.