Press Release: FY24 Financial Performance
Thursday, 21 November 2024

Reunert is pleased to announce our financial results for the year ended 30 September 2024, which is an improvement on the comparative period.

Key highlights for 2024 include:

Reunert delivered another improvement in financial performance in what was a challenging macroeconomic environment in South Africa. Highlights included the strong growth in the Defence Cluster, increased Zambian power cable performance, the successful integration of IQbusiness and the strong resilience of the Group’s businesses serving the South African market, which delivered good operational efficiencies and tight margin control.

In the Electrical Engineering Segment, the power cable businesses delivered an excellent increase in financial performance. The Zambian business increased volumes, improved margins, realised operational efficiencies and delivered most of the improvement in operating profit. In South Africa, the power cable business secured steady volumes, but suffered from reduced high voltage power cable contracts as projects were delayed by key customers.

The circuit breaker business’ volumes were stable in South Africa while export volumes increased in the second half of the year, specifically into the key USA market. A much-improved year-on-year performance at the USA subsidiary, tight cost control and good margin management all contributed to the improvement in financial performance at the business.

The ICT Segment delivered a solid performance underpinned by the Solutions and System Integration (S&SI) Cluster where the integration of IQbusiness together with another year of double-digit growth at +OneX drove the financial performance.

After interruptions in the supply chain, caused by challenges at the country’s ports, Nashua’s performance returned to normal in the second half of the financial year and it delivered results in line with those of second half of the prior year where there was uninterrupted supply.

After interruptions in the supply chain, caused by challenges at the country’s ports, Nashua’s performance returned to normal and delivered a second half financial performance aligned to prior years when uninterrupted supply was experienced.

Quince’s collections remained stable and yielded good financial returns despite South Africa’s weak economy and high interest rates.

In the Applied Electronics Segment, the Defence Cluster delivered a good financial performance. The defence businesses executed on its healthy order books successfully and very positive financial performances were achieved at the fuze, radar and logistics businesses. These achievements were made possible through excellent operational performances that increased recoveries, improved margins, and managed costs.
In the Renewable Energy Cluster, the solar energy business had a strong performance with a record build of new solar plants. Importantly, the business’ increased focus on deal management and execution yielded positive results as margins improved. The well-publicised commoditisation, over stocking and reduction in demand in the R&SC battery storage market, however, severely impacted the battery storage business

Reunert’s Group CEO Alan Dickson said,

These financial results are underpinned by the acceleration in the execution of the Group’s strategy which drives our growth trajectory and focuses on three key areas, namely, digital integration in the ICT Segment, Renewable Energy and the expansion of our international income streams.

The ICT Segment’s Digital Integration strategy has been a significant success as they have unlocked growth across both public and private sector digitalisation projects. The successes are evidenced by several key wins. The business has consistently grown market share both through the addition of new, blue chip enterprise clients and, by driving cross sell and upsell opportunities, thereby increasing wallet share in existing clients.

Our internationalisation strategy, underpinned by Defence and Electrical Engineering revenues, provides a significant income stream to augment our South African revenues. The execution of the Group’s strategic growth initiatives, supported by our solid core businesses, are accelerating and an increase in financial contribution is expected in the years ahead.”

The Group CFO, Nick Thomson, stated that:

“Over the last three years we have generated free cash flow of R3,1 billion, raised R1,3 billion in debt and realized R229 million from the proceeds of the sale of property, plant and equipment resulting in a total of R5,0 billion being available to the Group. After the allocation of capital within the Group and distributing over 50% of free cash flow to our shareholders as dividends, the residual cash balance is sufficient to meet the final dividend for 2024 and provide the resources to continue the pursuit of our strategic initiatives.

Positively, the deployment of this capital has resulted in the Group’s return on capital employed improving from 14,5% in 2021 to 17,7% in 2024. Our strong balance sheet, significant unutilised banking facilities, continued positive cash generation capacity and ability to return funds from Quince to re-invest into higher yielding opportunities positions the Group well to continue to execute its strategy and to generate positive cash returns for our shareholders.”

The full results presentation and / or webcast will be available after 11h00 on Thursday, 21 November 2024 at https://reunert.co.za/reporting-and-results.php




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