JSE-listed ARB Holdings on Thursday reported double-digit growth in earnings for the financial year ended June 30.
The investment and property holding company posted headline earnings a share and earnings a share of 71.7c, a 15.9% and 14.9% increase respectively on the prior year, with the International Financial Reporting Standard (IFRS) effect on earnings reported at 13.13c in 2018, compared with the 1.01c reported in 2017.
“The most significant reportable element of the group's financial results revolves around the IFRS effects of the put option liability relating to the Eurolux minorities,” the company said.
Profit attributable to ordinary shareholders for the year under review increased by 14.9% year-on-year to R168.5-million, while gross profit increased by 3.5% to R615-million and operating profit declined by 5.7% to R204-million.
However, ARB remains cash generative and continues to manage its cash resources effectively, resulting in an improvement in interest income, which, together with the IFRS put option adjustment, resulted in an aftertax profit improvement of 11.8% to R191.6-million.
ARB’s revenue increased by 4.5% to R2.59-billion in the current year, 2.5% of which were contributions from the new branch operations and the CraigCor acquisition, which was effective February 1.
The group’s electrical division's revenue increased 6.2%; however, the unit continued to be constrained by limited government infrastructure spend during the year and the decline in local mining and manufacturing activities.
The lighting division was adversely affected by the decline in retail sales, especially in the first six monts of the financial year, when consumer confidence was particularly low.
The group remains ungeared with R259-million cash-on-hand, after spending R106-million on capital expenditure (capex), dividends of R119-million and R19.2-million for the acquisition of CraigCor.
The capex includes the completion of the East London facility, the purchase of the vacant land at Lord's View and the initial costs of construction of the distribution facility.
ARB expects to spend another R65-million to complete the construction of the distribution centre for occupation in December.
ARB maintained a dividend of 25c a share for the 2018 financial year, along with a special dividend of 10c a share to return excess cash to shareholders.