Continued upward trajectory in financial performance

Reunert’s 2022 financial performance continued on the positive upward trajectory of the last two years. The Group delivered a 16% increase in segment operating profit, which the Group considers to be the best metric by which to measure sustainable profit, with growth realised in all three segments. There were strong improvements in both the Electrical Engineering and Applied Electronics Segments and another steady performance from the ICT Segment. These performances delivered increased earnings metrics for the Group and a strong improvement in the quality of earnings, measured by the return on capital employed (ROCE). In addition, despite numerous challenges in the Group’s supply chain, resulting in additional cash being invested into working capital, the Group retained its ability to reward shareholders through an 8% increase in dividends. The Group expects the impact of the electronic chip shortages and other global supply chain challenges, as outlined below, to steadily decline during the 2023 financial year, allowing for a gradual reduction in working capital.

Electronic chips and supply chain challenges

The Group suffered from the global electronic chip supply shortages and complex supply chain dynamics. The situation deteriorated in the second half of 2022 and resulted in a loss of sales and operating profit at Nanoteq, the Group’s Encryption business, Omnigo, the Group’s manufacturer of printed circuit boards (PCBs), and Nashua, due to Ricoh’s inability to meet the demand for office automation products. The Group’s cash position was negatively impacted by this, as additional investment had to be made into raw material stock holdings to mitigate stock shortages. This was compounded by work in progress and trade receivable balances increasing at year-end, as either sales were achieved later than planned or the underlying production commenced later in the year than anticipated. However, there are early signs of improvement in supply in the electronic component market and supply chains are showing signs of recovery.

Group results

The Group’s 2022 results reflect the positive impact of the ongoing financial recovery in both the Applied Electronics and Electrical Engineering Segments, coupled with an above-inflationary increase in the ICT Segment’s performance. The Group increased revenue by 16% to R11 129 million (2021: R9 575 million). Segment operating profit increased by 16% to R1 140 million (2021: R986 million), which would have been higher but for the electronic component and stock shortages experienced in both the Applied Electronics and ICT Segments.

The Group’s operating profit increased by 17% to R1 231 million (2021: R1 050 million), driven mainly by the growth in segment operating profit and the benefit of various fair value remeasurements totalling R85 million (2021: R65 million).

The Group’s profit for the year increased by 10% to R844 million (2021: R767 million) after accounting for the R42 million share of loss in equity-accounted investees. The majority of this loss arose from a fair value remeasurement loss of R38 million (remeasurement gain 2021: R24 million) arising from the call option that Lumika, the Group’s renewable energy joint venture, has to acquire the residual 72% that it does not own in Terra Firma Solutions (TFS). Lumika is in the early stage of its development, but already has a strong pipeline of renewable energy projects.

Headline earnings improved by 9%, increasing to 519 cents per share (2021: 478 cents per share). Basic earnings per share improved by 8% to 520 cents per share (2021: 483 cents per share).

Measure- ment criteria Year ended 30 September
2022 2021 % change
Revenue Rm 11 129 9 575 16
Operating profit Rm 1 231 1 050 17
Segment operating profit Rm 1 140 986 16
Profit for the year Rm 844 767 10
EPS cents 520 483 8
HEPS cents 519 478 9
Total cash dividend per share cents 299 277 8


Cash resources and liquidity

The global logistics and supply chain challenges described above together with higher sales in the last quarter of 2022, which resulted in higher trade receivable balances, led to the Group increasing its investment in working capital by a further R334 million (2021: R200 million). This increase resulted in the Group converting 80% of the Group’s profit for the year into free cash flow (2021: 79%). As global supply chains improve, the Group expects to see the cash flow benefit of reducing working capital requirements.

Pleasingly, the Group ended the year with net cash resources of R359 million (2021: R291 million). This cash, together with the ongoing cash generation capability of the Group, maintains the ability of the Group to continue to honour both its commitment to appropriate dividend returns to shareholders, as well as its operational requirements. The Group has adequate headroom in its bank funding capacity to provide the financial resources to roll out the Group’s strategic initiatives.

Segmental review

Electrical Engineering

The segment continued the strong growth in financial performance from the prior year, as both the Power Cable and Circuit Breaker businesses delivered good results. These strong performances, together with the continued pass-through of high commodity prices, resulted in segment revenue increasing by 13% to R6 266 million (2021: R5 551 million), while positive operating leverage increased segment operating profit by 17% to R436 million (2021: R373 million).

Power Cable production volumes improved moderately over the prior year. This coupled to an improved mix of products, the receipt and delivery of several large contracts, and a further improvement in operational efficiencies yielded a considerable increase in operating profit. The Zambian business environment remained stable and the cash position at Zamefa improved as the outstanding government receivables reduced to ZMW49 million (2021: ZMW103 million).

The Circuit Breaker factory continued its positive export performance as product volumes increased and the USA and Australia subsidiaries both posted record results. Local production volumes grew in line with GDP. During the year CBi: Energy was launched, which consolidates the energy management initiatives of the Group. This new line of business is expected to provide good impetus to the existing Circuit Breaker business.


The South African economic conditions remained challenging for the ICT Segment as sustained loadshedding had a negative impact on the segment’s core SME customer base. Importantly, despite the challenging environment, the segment grew revenue by 4% to R2 599 million (2021: R2 490 million) and delivered a segment operating profit increase of 6% to R644 million (2021: R608 million).

The segment’s Business Communications cluster suffered most from the challenging conditions as loadshedding had a negative impact on its core customers as the loss of electricity resulted in a loss of voice minutes. Consequently, despite the continued increase in the customer base, growth in the sales of its complementary product sets and the positive results from last mile broadband connectivity, the cluster delivered lower profitability compared to the prior year.

The Total Workspace Provider (Nashua) was again negatively impacted by the supply chain challenges, but the company’s new dual brand initiatives assisted during these periods and, together with further improvements in their complementary revenues, delivered growth in operating profit.

+OneX continued to expand its service offering during the year. A strong performance in its Unified Communications business and the rapid growth of the new-age ICT offering resulted in a significant increase in both revenue and operating profit for the year.

The Finance cluster delivered a consistent financial performance. The quality of the book and the collections improved through the year. The book remains adequately de-risked as the allowance for expected credit losses remains appropriate and were released at a slower rate than in the prior year, due to the forward-looking credit conditions being forecasted to tighten.

Applied Electronics

The Applied Electronics Segment recovered strongly as the large defence export order book enabled a much-improved level of sales and the demand for renewable energy continued to increase. The global electronic chip shortages were a major challenge throughout the year and, although it dampened performance, the segment still grew strongly as revenue increased by 27% to R2 361 million (2021: R1 854 million) and segment operating profit grew by 64% to R164 million (2021: R100 million).

The Fuze business was operating at full capacity in the second half of 2022 and accordingly delivered a strong financial performance. The demand for their products remains high and the company’s manufacturing capacity will be fully utilised in 2023.

The Logistics business delivered another year of growth on the back of healthy local and export orders. The export pipeline, specifically, remains strong as demand for their products from new geographies continues to grow.

The Radar business delivered a strong improvement in operating profit compared to the prior year. The demand for mining radars remains positive and the newly released Berm Monitoring System yielded good first-year sales that will boost this market vertical of the business’ sales into the future.

The Secure Communications businesses had a very challenging year. The local radio order was not placed by the South African National Defence Force in the current year and export orders were insufficient to cover the gap. This business restructured its cost base and the cost of doing so was fully accounted for in the financial year. The encryption business and printed circuit board manufacturer struggled to meet demand due to the global electronic chip shortages which adversely impacted their revenue.

The outlook for the year ahead for the Defence businesses is much more promising, given improved order books across the segment.

The ongoing liberalisation of the electricity generation market in South Africa accelerated in 2022. The cap on embedded generation was lifted to 100MW and the tenders for the Renewable Independent Power Producer Programme Window 5 and 6 were issued. TFS benefited from the increase in embedded generation and their build rate and revenue increased. They continued to invest in build-own-operate assets (BOOs) and their asset ownership now exceeds 30MW.

The Battery business invested heavily in systems and human resources to enable scale production, which resulted in record revenue and operating profit for the year.


The Group’s strategy execution progressed well in 2022. The Group retains its key strategic focus on the fast-growing market of renewable energy and the expansion of the ICT Segment.


During the year, +OneX expanded its service offering through the acquisition of application and software development and end-user computing (EUC) capability. This increased service offering enabled increased engagement with the business’ enterprise customer base. Pleasingly, their new-age ICT offering has continued to provide value and there has been a positive increase in the number of clients serviced by +OneX.

The increase in service offerings and client base led to growth in both revenue and profitability for the year. +OneX’s revenue now constitutes 16% of the ICT Segment (2021: 13%), a 37% increase year-on-year, reflecting the competitive relevance of its value offering in assisting its clients with their digital transformation.

The Group retains its focus on the continued expansion of the ICT Segment’s new-age ICT offerings in the Solutions and Systems Integration cluster, primarily through further acquisitions.

Renewable energy

The renewable energy market in South Africa continued to liberalise, as the lifting of the embedded generation cap to 100MW continues to drive the strong growth trajectory for our businesses.

Reunert’s renewable energy ecosystem now includes:

  1. A leading Engineering, Procurement and Construction solar energy service provider in South Africa in TFS
  2. A growing set of renewable energy solar assets with attractive internal rates of return
  3. A leading renewable storage solution provider in Blue Nova Energy
  4. A modern “Internet of Things” (IoT) driven energy management capability in CBi: Energy
  5. The ability to wheel energy across the Eskom grid to Commercial and Industrial customers through the development of Apollo Energy

This ecosystem enables Reunert to participate in multiple value areas across the renewable energy environment and presents a compelling value offering to both customers and investors.

Etion Create

Subsequent to year-end, the Group acquired 100% of the issued share capital of Etion Create from Etion Limited (Etion) for a purchase consideration of R202 million.

Etion Create is an original design manufacturer with a product portfolio that covers the industrial, defence and rail sectors. The company has a significant local and Middle East market presence, with opportunities in South East Asia.

The acquisition will also result in synergies with other businesses in the Applied Electronics Segment, specifically due to Etion Create's enhanced design and manufacturing capabilities. Etion Create will also increase the span of the segment product portfolio and improve the segment’s access to key export markets.


The Group continues to make good progress in assessing alternate funding mechanisms for Quince, to release the Group’s current loan funding of the book to redeploy these funds, over time, into the Group’s higher yielding strategic investments.


Our companies continued to face many external challenges in 2022. Despite the complex operating environments, we have delivered a pleasing set of results that is reflective of the commitment and resilience of our employees across the Group. We thank them for their efforts and look forward to their continued commitment. Our customers remain the vital lifeblood of our businesses. We thank you for your valued business and commit to continue to add value in the years ahead. We value the support of our suppliers and other stakeholders that we have experienced throughout the past year.


After reaching the prescribed retirement age for non-executive directors, as set out in the Board charter, Mr AB Darko will retire from the board of directors immediately following the conclusion of Reunert’s 2023 annual general meeting.


After a positive financial performance in 2022, the Group finds itself in a better position than 12 months ago. In general, the Group’s order books are fuller, there are early signs of relief from the electronic chip and supply chain challenges, and the Group’s strategic initiatives continue to deliver growth.

The Group is positioned to deliver an improved performance in 2023, driven by:

Whilst global recessionary pressures and South African socio-economic challenges pose threats to growth, the Group is well positioned to continue its trajectory of financial performance.

Cash dividend

While cognisant of the economic uncertainty going forward, the Group’s free cash flow generating capacity remains intact. Notice is hereby given that a gross final cash dividend No. 193 of 224,0 cents per ordinary share (2021: 207,0 cents per ordinary share) has been declared by the directors for the year ended 30 September 2022.

The dividend has been declared from retained earnings.

A dividend withholding tax of 20% will be applicable to all shareholders who are not exempt from, or who do not qualify for a reduced rate of, withholding tax.

Accordingly, for those shareholders subject to withholding tax, the net dividend amounts to 179,20000 cents per ordinary share (2021: 165,60000 cents per ordinary share).

The issued share capital at the declaration date is 184 969 196 ordinary shares.

In compliance with the requirements of Strate Proprietary Limited and the Listing Requirements of the JSE Limited, the following dates are applicable:

Last date to trade (cum dividend) Tuesday, 17 January 2023
First date of trading (ex dividend) Wednesday, 18 January 2023
Record date Friday, 20 January 2023
Payment date Monday, 23 January 2023

Shareholders may not dematerialise or rematerialise their shares between Wednesday, 18 January 2023 and Friday, 20 January 2023, both days inclusive.

On behalf of the Board of directors

Mohamed Husain
Alan Dickson
Chief Executive Officer
Nick Thomson
Chief Financial Officer

Sandton, 24 November 2022