Automotive, industrial and electrical consumable products supplier Hudaco Industries recorded good results for 2021 despite it having been a challenging period, CE Graham Dunford said on February 4.

He mentioned some of the challenges as including the Covid-19 pandemic, the civil unrest in July 2021 and congestion at the Durban port.

Despite this, Dunford highlighted a good performance by the group, with good management of the entire value chain, increased stock levels and gains in market share.

He pointed out that the group had achieved a return on equity of 19.5%, cash generated from operations of R910-million and a decrease in debt to R469-million.

For the period, turnover grew by 16.1% to R7.3-billion, while gross profit improved by 23.6% to R2.7-billion.

Operating profit rose by 61.9% to R826-million.

Moreover, headline earnings a share increased by 56.3% to 1 608c.

A final dividend of 520c apiece was declared.

OUTLOOK

Dunford said the company was relatively optimistic about the year ahead and believed the momentum and market share gains its businesses achieved in 2021 would continue.

In the consumer-related products segment, Hudaco expects to see synergies and benefits from the security and communications businesses, with a new management team having been in place.

Its businesses supplying products to the automotive aftermarket should benefit from the bigger second hand car pool requiring more parts, he added.

Moreover, the power tools and rapidly expanding fastener business should continue to grow its market share with its extensive range of products.

Dunford also said Hudaco sees potential to accelerate its role in the alternative energy sector and the newly established Hudaco Energy business should have a positive impact on its diesel engine, battery and electrical businesses.

In the engineering consumables segment, the mining and manufacturing sectors make up 56% of sales. With the global demand for South Africa’s raw materials to increase as the Covid-19 economic recovery gathers momentum, and local production ramps up, all of Hudaco’s businesses in this segment are expected to benefit.

Dunford also mentioned that Hudaco was optimistic about the growth potential and contribution to the group that it would make, of CADAC, which was acquired in February.

He noted that Hudaco would continue to manage its capital allocation to conditions as they unfold, whether by increasing stock, investing in acquisitions, paying down debt, buying back shares or distributing dividends.