Barloworld’s record sales boost profits

Published Nov 8, 2012

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Roy Cokayne

Record sales of large mining equipment to customers and a solid performance by Barloworld’s automotive and logistics businesses enabled the distribution group to deliver a strong performance in its 2012 financial year, it said yesterday.

The group said it expected headline earnings a share for the year to September to be between 40 percent and 50 percent higher than the R4.65 a share the previous year.

Basic earnings a share, which were boosted by exceptional profits realised on the disposal of handling assets, are expected to be between 48 percent and 58 percent higher than the R4.83 reported in the previous year.

The group said good trading results were achieved in the second half of its financial year, with its Equipment Southern Africa business delivering record sales of large mining equipment to customers, which contributed to solid growth in operating profit.

It said the Russian Equipment business continued to build on the high base established in the previous year and delivered another excellent result.

However, it said trading conditions in Equipment Iberia remained “very difficult”.

The group said the automotive and logistics businesses produced a good result in a competitive trading environment with motor retail, car rental, fleet services and logistics all producing results well ahead of the previous year.

However, the handling division recorded lower profits because of difficult trading conditions in certain regions.

The group sold its US handling business in April to Briggs and LiftOne for about R460 million and its UK handling business to Briggs Equipment for R465m in September.

Barloworld said finance costs were higher than the previous year because of higher activity levels and it had a strong performance from its joint ventures, particularly Congo Equipment in the Democratic Republic of Congo.

But it said the acquisition of the Bucyrus distribution assets in southern Africa effective from July did not have a material impact on revenue or profit. Barloworld expects to announce its annual financial results on November 19.

Shares rose 2.19 percent to close at R74.24 yesterday.

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