Listed distribution and industrial brand management company Barloworld maintained its revenue and operating profit levels from continuing operations
Listed distribution and industrial brand management company Barloworld maintained its revenue and operating profit levels from continuing operations in the year to 30 September at R62 billion and R4,1 billion respectively in a solid set of results.
Headline earnings per share from continuing operations were up 16% to 975 cents, with cash inflow before financing activities totalling R2,6 billion. The board declared a total dividend per share of 390 cents – an improvement of 13% over 12 months ago.
Barloworld CEO Dominic Sewela said: “Equipment southern Africa's operating performance has been resilient in the year following a rebound in mining and infrastructure demand. Increased activity has generated improved results in our joint venture in the Katanga province of the Democratic Republic of Congo.”
He added that strong mining and aftermarket activity in the Equipment Russia division drove a solid performance in that business.
The group has decided to exit its logistics business in the Middle East and to dispose of its Iberia equipment business. Sewela wants to dispose of the Iberia unit at a premium to its net asset value of R2,8 billion and the group is locked in negotations with a single buyer.
Barloworld is a distributor of leading international brands providing integrated rental, fleet management, product support and logistics solutions. The core divisions of the group comprise Equipment, Automotive and Logistics. The company was founded in 1902 and currently has operations in over 20 countries around the world with 83% of over 18 000 employees in South Africa. Ramasela Ganda, CFO of Barloworld Equipment , was crowned Public Sector CFO of the Year at the 2017 CFO Awards for her exploits at Ekurhuleni Metropolitan Municipality.
Barloworld FD Donald Gert Wilson (pictured) said the group was constantly looking for opportunities to unlock capital and cash flow.
“We remain committed to optimising the returns of our existing businesses with specific focus on the turnaround of Logistics and gaining cost efficiencies across the group. With the recovery of global mining, we expect to see higher returns across our Equipment businesses in the year ahead.
“The local automotive industry is facing a number of challenges yet we remain positive that our integrated model can withstand these pressures. Generating free cash flows remains an imperative together with ensuring that the group’s assets generate a return on invested capital above our stated target weighted average cost of capital target of 13%. We continue to explore options to rationalise the group’s asset base and unlock capital to take advantage of future high growth opportunities.”
Sewela was also optimistic about the “good progress” the group was making in implementing its efficiency strategies and realising the benefits thereof.
“As a result of strong positive cash generation and well managed debt levels, we are well placed to capitalise on acquisitive growth opportunities as they arise. The full benefit of initiatives progressed in the current year will continue to have a positive impact into 2018.”