JSE-listed chemicals manufacturer Rolfes Group’s acquisition of Bragan Chemicals – an importer and distributor of speciality products in the food and beverage, pharmaceutical and cosmetics industries – helped the company achieve a 91% increase in headline earnings, from R41-million to R79-million, for the year ended June 30.

The group on Monday noted that the company is targeting the need for food security, clean water and manufacturing demand through its four strategically placed divisions, namely agriculture, food, industry and water.

Speaking to Engineering News Online at Rolfes’ annual results presentation, group CEO Lizette Lynch noted that the acquisition, which came into effect in October last year, was very important for the company and provided a new platform for cross-selling and organic growth.

“If you look at us on an operating level, it contributed R56-million, which is definitely a major contributor. We must also recognise that we have grown 19% organically, excluding the acquisition, which we are proud of,” she said.

Lynch further noted that the company’s industrial division underwent a lot of restructuring, which included extending its product range and ensuring that key business product drivers in the company’s industrial division were optimally structured, combining logistics capabilities.

“We’ve had a good year in our agricultural division, despite the drought, owing to the fact that the crops that we supply are centred around irrigation,” she said.

Lynch added that the company had expanded its food division into the Western Cape, KwaZulu-Natal and Port Elizabeth, and was fortunate in terms of volumes and demand experienced in the food sector.

“In our water sector we had petrochemical and automotive tenders that weren’t allocated, which will hopefully come through next year,” she said, adding that moving the water division to the Jet Park site in Ekurhuleni, Gauteng, contributed to performance.

Lynch noted that the company would possibly like to add a fifth segment to its operations that would contribute to the company’s group strategy, which is centred around providing food security and clean water.

“Major challenges we faced [this year] were currency volatility and tough economic conditions locally and internationally. There were a number of difficult market and economic scenarios that we’ve had to deal with, but I think we coped well,” she said, adding that the outlook for the upcoming year was positive.

FINANCIAL RESULTS
Operating profit increased to R137-million for the year ended June 30, compared with R80-million in the same period last year, at a margin of 10% of revenue.

Earnings before interest, taxes, depreciation and amortisation increased by 65% to R147-million.

Headline earnings increased 91% to R79-million, while revenue increased 20% to R1.36-billion.

Earnings a share increased by 45% to 53.1c, with the weighted average number of shares in issue for the period calculated at 147 967 135.

Net finance costs increased to R28-million, mainly owing to higher interest paid relating to acquisitive long-term debt.

“We have produced a pleasing and solid performance overall with improved profitability and operating margins for the businesses within our target ranges. After almost doubling headline earnings and reducing the company’s gearing, we are pleased to declare an annual dividend to shareholders,” Lynch said.

Rolfes noted that it declared a dividend of 6c a share.