Johannesburg - Investment and property holding company ARB Holdings gained 12.62 percent to R5.80 a share yesterday on the JSE after the company released a double-digit growth in profit before interest and taxation (PBIT).
ARB said its profit before interest and taxation rose 10 percent to R216.7 million for the year to end June, up from R196.4m last year.
“It is encouraging to report such results despite the lack of any real economic growth and infrastructure spend. Both divisions performed well, but the lighting division produced good numbers with revenue increasing by 19.1 percent and the PBIT by gaining 36.9 percent,” chief executive Billy Neasham said.
Encouraging
ARB has three divisions: lighting, electrical and corporate. But the group has investments primarily in electrical wholesaling and lighting distribution.
Revenue was up 16 percent to R2.5 billion, while headline earnings per share increased by 15.5 percent to 59.74c a share.
Neasham added: “The lighting division continued to show pleasing market share gains, bolstered by the introduction of new products. The electrical division has had success in securing orders from the limited project opportunities available both locally and in neighbouring countries. These efforts have been augmented by the resumption of electrification projects implemented by local municipalities ahead of the August local government elections.”
The group said in view of the group’s continued strong cash generation and its ungeared balance sheet, the board had resolved to declare a dividend of 23.1c a share as compared with 20.1c a share last year, representing the maximum payout in terms of the company’s dividend policy.
In addition, the board has resolved to again declare a special dividend of 10c a share in order to return excess cash to shareholders.
Neasham said the company was concerned about the state of the political climate in the country as it unsettled the business.
Looking ahead the company said it wanted to explore more opportunities to capitalise on in the next year to counter the challenging trading conditions. These include organic growth opportunities through the opening of new Connect stores in the electrical division, and through the introduction of new product ranges at Eurolux.
BUSINESS REPORT