ARB's H1 earnings drop

8th February 2019 By: Natasha Odendaal - Creamer Media Senior Deputy Editor

JSE-listed investment and property holding company ARB Holdings on Friday posted a double-digit decline in headline earnings per share (HEPS), exacerbated by an increase in the put option liability in Eurolux, for the six months to December 31, 2018.

The group reported a contraction of 12.8% in HEPS in the first half of the financial year as operating profit fell by 15% to R92-million.

Including the negative impact of the International Financial Reporting Standards fair value adjustment of the put option liability, HEPS plunged 38% to 23.17c.

The liability increased by R10.6-million in the half-year under review, compared with a decrease of R13.8-million in the comparative period last year, resulting in a net year-on-year change of R24.4-million.

ARB’s revenue for the period increased by 1.1% to R1.36-billion.

The electrical division’s turnover declined marginally despite the inclusion of the February 2018 acquisition of CraigCor and the expansion of the Connect branches.

The lighting division's turnover increased owing to an increase in market share from improved fill rates at retail stores and turnover from the Crabtree distribution joint venture, which is now included in the revenue.

ARB’s operating profit decreased from R107.4-million in the comparative period last year to R91.6-million in the six months to December, with an operating margin of 6.8% of revenue.

The group continues to be cash generative, remains ungeared and has net cash on hand of R147.8-million as at December 31, 2018, compared with R226.5-million in the same period in 2017, after the payment of dividends during the reporting period of R109.3-million.