Diversified industrial group KAP Industrial Holdings increased its revenue by 10% to R9-billion for the six months to December 31, while operating profit rose 24% to R1.1-billion, which resulted in operating margins continuing to improve to 12.3% from the previous year’s 11%.

“The results for the period under review reflect disciplined execution of the group’s strategy by our management teams. These results were driven primarily by organic growth and market share gains which are the result of recent technology investments, improved efficiencies and increased integration across the group,” said CEO Gary Chaplin.

Cash flow from operations also increased by 27% during the period, supported by earnings growth and improved working capital management.

KAP’s diversified logistics segment saw its revenue increase by 9% to R4.5-billion, with operating profit increasing marginally by 2% to R488-million.

“Despite the subdued economic activity in our areas of operations, the diversified logistics operations performed well to show growth in a very challenging environment . . . characterised by lower volumes and increased competition; the group’s strong cost control and efficiency improvements continued to support the overall operating margins and the competitiveness of the division,” said Chaplin.

The group’s diversified industrial division increased its revenue by 12%, to R4.6-billion. This, Chaplin highlighted, was a result of recent technology investments and capacity expansion in the division.

Meanwhile, KAP also reported an improvement in its chemicals division, which performed well as a result of strong demand for its products and the commissioning of a new downstream value-add paper impregnation plant at its Woodchem operations.

Stable vehicle assembly volumes, robust export volumes and successful new model introductions in the domestic market all contributed to the good performance in KAP’s automotive components division.

“We continue to focus on expanding our existing operations through investments in new technology plant and equipment and through complementary acquisitions,” explained Chaplin.

As such, the company is engaged in several organic expansion projects in its diversified industrial division, which will see increased capacity and lower operating costs.

To facilitate its current expansion activities and future growth, the company concluded three key funding projects during the period, “where we enjoyed strong support from shareholders and institutions”.

The group raised R1.5-billion equity through a fully subscribed rights issue, a further R1.4-billion through a combination of private and public bond issuances and R2.8-billion of new term debt facilities.