JSE-listed Ellies Holdings has lifted its headline earning per share (Heps) by 35.9% to 74c a share for the year ended April 30, primarily on the back of a strong first-half performance and despite a subsequently “unrealistic” growth expectation for the last six months of the financial year.In January, the company posted a 102.4% increase in Heps to 42.46c for the six months ended October 31, driven by the completion of the first phase of Eskom’s Project Power Save (PPS), as well as “beneficial” contract timing in the infrastructure sector.

“We are pleased with the results achieved by the group for the full year, especially when one considers that consumer spending has not improved and infrastructure development [in the second half] has been low,” CEO Wayne Samson said at the company’s recent results presentation.

The group grew its revenue for the year by 16.6% to R1.9-billion, from R1.1-billion in 2012, chiefly on the back of continued growth in the consumer goods division and the completion of various infrastructure projects.

The consumer goods division posted a 14.1% increase in revenue to R1.3-billion, improving gross profit margins as a result of contributions made by the “green shop within a shop” concept, the expansion of the domestic and commercial lighting ranges and Phase 1 of the Eskom PPS programme.

Returning to overall group results, Ellies reported a “satisfactory” increase in after-tax profit of 36.8% to R224.8-million, with an improved operating profit margin of 15.7%, compared with 13.4% for the 2012 financial year.

Ellies’ infrastructure division, which operates as Megatron Federal, also reported a solid increase in revenue of 23% to R687.9-million for the year.

“Less satisfactory, however, was the decline in profit before interest or taxes of 9.9% to R82.1-million for this division. The decline was primarily owing to a drop in gross margins and a significant increase in additional staff and resources in the telecommunications and compliance sectors,” said Samson.

He added that the company had been “disappointed” by the recurring delays in the roll-out of digital terrestrial television (DTT) in South Africa as a result of delays in finalising the related strategy earlier this year.

By January, the company had invested over R50-million into DTT products, which included the bulking up of its local manufacturing capacity and the importation of production machinery and raw materials to produce aerials.

Ellies continued to export its DTT products into the rest of Africa, as it awaited local DTT roll-out.

“South Africa is falling behind, while the rest of the continent is surging ahead with digital migration, but we are hopeful that, with recent departmental changes, the implementation of the DTT migration will be imminent,” said Samson.

Looking ahead, he added that the consumer goods and services division would benefit from the expected entry of a new free-to-view satellite broadcaster, Openview HD, or OVHD, in October, which would drive further growth in the satellite division.

In the infrastructure division, the company expected its existing order book, which remained at record levels, to bolster the group’s overall performance.

Megatron had been acknowledged as a preferred equipment supplier for several solar and wind projects in the South African Renewable Energy Independent Power Producer Procurement Programme and, with the division’s products now successfully tested to South African Bureau of Standards specifications, it expected to be contracted to several new projects.

“We are prepared for the coming year, which will see new products and projects rolled out and new sectors explored, and hope to continue the diversification and growth we experienced over the past three years,” said Samson.

The company did not declare a final dividend for the year.