JOHANNESBURG - Property holding and investment company, ARB Holdings, has acquired new land via its corporate division, which will be developed during the next 18 months to house a new home for the electrical division’s Gauteng operation, which has outgrown its current premises.
Chief executive Billy Neasham said on Friday that the group expected to start construction only next year.
“We are expanding our premises in Midrand and we are expecting to spend about R60million in this project. It is our long-term investment, which we expect to bring positive results in the long term,” Neasham said.
ARB will see its East London branch relocating to new premises in the East London CBD, which will improve access to a broader customer base to expand the product offering into that region.
The group has three reporting divisions: electrical, lighting and corporate divisions. It has seen tough operating conditions continue to have a negative impact on the its results.
The electrical division’s revenue remained constrained by the limited government infrastructure spend during the year and the decline in local mining and manufacturing activities.
Although the conditions have been constrained, the group marginally grew its revenue by a modest 0.4percent to R2.48billion for the year to end June, while increasing gross profit by 8.4percent to R594m. The group said this was achieved through disciplined trading practices.
Profit before interest and tax declined by 1percent to R214m, while headline earnings per share increased by 3.6percent to 61.89cents a share.
The group declared a dividend of 25c a share, which is 8.2percent higher than the 23.1c declared last year.
“The group continues to be cash generative, and managed its cash resources effectively,” Neasham said.
It remains ungeared with R306.6m cash on hand.
The group has other investments in closely-related trading and distribution businesses, including 74percent of ARB Electrical Wholesalers, a level 3 BEE company that operates 21 electrical wholesale branches throughout South Africa.
It also has a 60percent holding in Eurolux, which imports and distributes light fittings, lamps and related accessories.
The electrical division’s revenue declined by 0.5percent and profit before interest and tax was down 0.6percent during the period.
The lighting division saw its revenue increasing by 0.8 percent, with profit before interest and tax down 3.5 percent.
The corporate division, which comprises the property portfolio and the ARB IT business, reported a decrease in revenue of 2.4percent, with profit before interest and tax up 15.8percent.
- BUSINESS REPORT