Invicta Holdings, the investment management company of the Engineering Solutions Group (ESG), Capital Equipment Group (CEG) and Kian Ann Group (KAG) based in Singapore, has reported a strong set of results for the six months ended September 30.

CEO Steven Joffe tells Engineering News that, despite the challenging market conditions during the period, including the global impact of the Covid-19 pandemic, local issues such as the July unrest and issues at the ports, the group was able to report excellent results owing to measures taken in the prior period to reduce overheads and debt.

The cost of looting and emergency measures undertaken is estimated at R2-million, while the disruptive impact on profits is estimated at R14-million.

Invicta’s continued focus on cost control and working capital has resulted in net cash from operating activities of R549-million, which exceeds its investing and financing activities, resulting in a closing net cash position of R1.09-billion.

Continued efforts to settle debt have brought the net interest-bearing debt to equity ratio to a record low of 11%.

Revenue from continuing operations increased by 25% from R2.9-billion in the previous year to R3.6-billion, with operating profit before net finance income on financing transactions and foreign exchange movements 55% higher year-on-year.

The operating profit of R368-million includes R28.6-million profit from the disposal of the controlling interest in the wholly-owned KAG and R12-million from the disposal of branches.

The KAG disposal has resulted in recognition of KAG as an equity accounted joint venture, effective August 1.

Joffe indicates that the KAG transaction was a key focus area during the period. The disposal of a 51.19% interest in KAG generated cash proceeds of R437-million and was part of the group’s strategy to realise part of its investment in KAG.

The second part of the group strategy was to increase KAG’s interests in roller manufacturing and in the product distribution operations in both the US and Canada to 100%, as these have been identified as growth areas.

Following this optimisation, Joffe says the group is also poised to focus on other growth opportunities, with several being reviewed.

Joffe says the most notable is the acquisition of a controlling interest in Dartcom SA, a distributor of communication and renewable energy technology equipment and solutions both in South Africa and across the rest of Africa.

This acquisition will advance diversification into areas that have been identified as growth markets. The acquisition is expected to be finalised during the first half of 2022, following signing of the deal and a Competition Commission review, Joffe notes.

Looking ahead, he says, challenging market conditions are likely to prevail for at least the next six months, but the group has been optimised and is capable of being flexible in how it responds.