Barloworld moved well into the black in the year to September 30 with headline earnings per share (Heps) at 1 195 cents compared with the 268 cents loss in 2020, and it also declared a special dividend. Photo: Supplied
Barloworld moved well into the black in the year to September 30 with headline earnings per share (Heps) at 1 195 cents compared with the 268 cents loss in 2020, and it also declared a special dividend. Photo: Supplied

Barloworld share price up on strong earnings and special dividend announcement

By Edward West Time of article published Nov 23, 2021

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Barloworld moved well into the black in the year to September 30 with headline earnings per share (Heps) at 1 195 cents compared with the 268 cents loss in 2020, and it also declared a special dividend.

Normalised Heps from continuing operations came to 1 323 cents versus 70 cents in 2020. A dividend of 300 cents was declared compared with no dividend at the end of the 2020 year, and this brought the total payout in 2021 to 437 cents per share. On top of that, a special dividend of 1 150 cents will be paid.

Shareholders were enthused, as the share price went up 9.76 percent to R148.18 per share by yesterday afternoon.

Group revenue increased 8.4 percent to R53.8 billion, with revenue from continuing operations up 22.5 percent to R41.6bn.

The balance sheet held a robust R10.8bn cash, while net debt stood at R2.3bn.

Equipment Mongolia and Ingrain, acquired in the 2020 year, contributed 19.2 percent of operating profit – operating profit was up 119 percent to R4.3bn. The operating margin increased to 10.3 percent from 5.8 percent.

Chief executive Dominic Sewela said operating profit improved due to cost cuts, which had been done without negatively impacting future growth prospects.

He said the integration of Equipment Mongolia and Ingrain was progressing well and the businesses are delivering ahead of expectations.

“Our short-term priorities are to complete these integrations and extract further value. Future acquisitive growth will be considered once we have completed the remaining portfolio changes,” he said.

The results had benefited from the two acquisitions, a good performance from the southern African and Russian equipment businesses, and a turnaround of the car rental business. The strategy had also been accelerated since 2020.

He said the group, which is focused on industrial equipment and services and consumer industries, aimed to double intrinsic value every four years, and to do this currently, the portfolio of businesses was being pivoted towards defensive, relatively asset light and cash generative industrial sectors, based on a business-to-business operating model.

The motor retail business was exited in the past year and the group was in the process of selling its logistics businesses. The car rental and leasing business would also be exited in the medium term, he said.

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BUSINESS REPORT ONLINE

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