JSE-listed ARB Holdings achieved higher earnings for the year ended June 30, ending the period with a declaration of a special dividend to return excess cash to shareholders.
The investment and property holding company on Wednesday announced a year-end dividend of 23.1c a share, along with a further special dividend of 10c apiece.
The group’s headline earnings a share grew 15.5% to 59.74c, while basic earnings a share increased 11.6% to 57.69c during the year under review.
Profit for the year was up 9% to R160-million, with group revenue increasing by 15.8% to R2.49-billion.
ARB pointed out that its Electrical division held its own in a tough, competitive environment, securing the limited industrial and infrastructure project opportunities currently available in South Africa and in neighbouring countries.
Renewed interest in electrification projects by the municipalities ahead of the August local government elections had also contributed to the unit’s growth during the year under review.
The Lighting division continued gaining market share as it introduced new products, including that of a joint venture to distribute Crabtree products into retail stores.
“Despite the margin pressure as a result of the limited number of projects available and the volatile exchange rate, the group's disciplined approach to the management of its operating expenditure has enabled profit before interest and taxes (Pbit) to grow by 10.3% to R216.7-million,” ARB said.
A R5.5-million goodwill impairment in Elektro Vroomen had reduced Pbit.
Further, the group’s “rigorous management” of working capital enabled continued cash generation, maintaining its net working capital ratio of 22.3% within the targeted range of 20% to 25% of revenue.
While stock increased some 13.4% during the year under review to R439.9-million, ARB noted that there was scope to “better manage” the stock efficiencies in the Lighting division.
Capital expenditure of R19.9-million was reported during the 2016 financial year, up from the R15.7-million recorded in 2015.
ARB remains ungeared with cash on hand of R243.3-million.