Barloworld saw a 6.5 percent revenue increase, partially due to its two new acquisitions in 2020.
Barloworld’s decisive actions taken in 2020 have started to pay off as the company reported a 6.5 percent increase in revenue for the six months ended March 2021.
“We have maintained a strong balance sheet over the period, with a healthy focus on cash preservation that took some effort given the economic environment and the fact that we acquired and incorporated two businesses during the period,” says CFO Nopasika Lila.
Despite the challenges during 2020, the group achieved strong margins in this period, with resilient trading results from Barloworld’s businesses. The company reported a 13 percent increase in revenue and a 44 percent increase in operating profit from continuing operations.
“The group increased its operating profit from 2020 in a weaker economic environment because of the tough actions we took through austerity measures, but also through the contribution brought on by our new acquisitions,” Nopasika says.
The additional revenue from the recent acquisitions of Ingrain, incorporated in November 2020, and Equipment Mongolia, which has been on Barloworld’s books since October 2020, contributed 17 percent of the total revenue from continuing operations.
Nopasika says that Barloworld isn’t fully back to 2019 capacity at a top line level, but that the businesses that were acquired proved defensive during the pandemic. “We are cautiously embedding the acquisitions we closed last year.”
One of Barloworld’s largest contributors towards continuing operations, Equipment Southern Africa, was bolstered by the commodity activity that was still somewhat active although at lower production levels during 2020.
“Our improved profit was also due to management interventions in cost containment,” Nopasika says. The group achieved a R1.2 billion reduction in costs, with free cash generation of R4 billion.
Barloworld also sold its wholly-owned Motor Retail business to NMI Durban South Motors, and plans to exit the logistics business by the end of the current calendar year.
Nopasika adds that a special tribute should be paid to the Barloworld staff, who remained committed and loyal during very testing times and tough trading conditions, and ensured that the company continues to deliver the good results.
