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Johannesburg - The sale of Nashua Mobile’s subscriber base has helped lift Johannesburg listed Reunert’s [JSE:RLO] half year results for the period ending March 2015.
Reunert manages businesses in the electrical engineering, information and communication technologies and defence and allied technologies fields. Companies in Reunert’s portfolio include the likes of Nashua and Reutech.
On Tuesday, Reunert reported in its half year results that revenue from continuing operations increased 7% to R3.9bn, while its operating profit increased 5% to R502.8m.
Normalised headline earnings per share for the group also increased 10% to 261.4 cents while basic earnings per share rose by 20% to 286.5 cents. Headline earnings per share for the group further increased by 11% to 264.8 cents.
Nashua Mobile’s last month of trading was in November 2014 after which its subscriber base was sold to Vodacom, MTN and Altech Autopage. Nashua Mobile’s subscriber base was sold after the business experienced a 41% fall in profit during the half year period ending March 2014.
“This improvement is due to moderate, real growth in operating profit from continuing operations, additional proceeds on the sale of the Nashua Mobile subscriber bases and interest earned on the Nashua Mobile disposal proceeds,” said Reunert in a trading statement to shareholders.
The trading statement further reveals that the major classes of assets for Nashua Mobile at the end of the reporting period were R62.6m at the end of the unaudited period versus R874.7m as at March 31 2014.
The closure of Nashua Mobile would mark the beginning of the end for multi-network service provider’s in South Africa as technology group Altron has announced this month that it plans to sell off Altech Autopage’s subscriber base as well.
The sale of Autopage’s subscriber base is being negotiated and Altron will need approval from competition regulators before it proceeds with the move.
Nashua
Reunert has also revealed the interim results for Nashua, a digital office automation printing products and document management systems (MDS) business in Southern Africa
Segmental revenue for Nashua from continuing operations - which excludes that of Nashua Mobile - increased by 8% to R1.7bn while operating profit rose 19% to R243.7m.
Reunert said these results have primarily been driven by increased volumes in ECN (Electronic Communications Network), a larger rental asset book in Quince and the return to profit of Nashua Communications and Prodoc.
Looking forward, Reunert has expressed a cautiously upbeat view about its operations.
“The economic conditions in South Africa are not expected to improve significantly in the near future. However, the receipt of large, medium-term base load orders by Reutech and improved trading positions in most of the group's existing businesses position Reunert well to deliver real growth in the financial year,” said the company.
“The group's strong balance sheet and cash position will enable the group to focus on and prioritise strategically compatible growth opportunities,” the company added.
