JSE-listed KAP Industrial Holdings has seen continued growth during the year to June 30, with headline earnings from continuing operations up 18% to 47.8c apiece.
Operating profit increased 19% year-on-year to R2-billion.
“Following the group’s rationalisation and consolidation strategy, which took place during the past 18 months, our continued focus on optimising existing operations, organic expansion activities and the acquisition of complementary businesses, has successfully improved our market share in our areas of operation,” KAP CEO Gary Chaplin says.
Revenue increased by 4% to R16.2-billion in the financial year under review, despite the challenging economic environment, buoyed primarily by KAP’s market leading positions in the industries it serves.
The group’s diversified logistics division underwent further consolidation with the Unitrans Supply Chain Solutions operations amalgamating into a single contractual logistics division, which delivered enhanced operating efficiencies.
“It also provided us with a platform to reallocate capital towards higher return activities and to reduce overhead costs, which directly improved operating margins,” Chaplin adds.
The company’s ongoing strategy to acquire complementary businesses saw the group successfully acquire automotive accessories supplier Autovest for R560-million.
Chaplin highlights KAP’s expansionary capital expenditure of R752-million, resulting from various growth opportunities in the group. These included new logistics contracts, a high-gloss finishing line in PG Bison’s Boksburg plant, a paper impregnation plant at the Woodchem operation, progress payments on the expansion of the Hosaf polyethylene plant and the upgrade of the Piet Retief particleboard plant.
“Yet, despite these expansion initiatives, the group’s net interest-bearing debt decreased to R2.06-billion from R2.08-billion owing to strong profit and cash generation,” says Chaplin.
The strong performance also resulted in a 20% increase in gross dividend to 18c a share, up from 15c apiece the year before.