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Invicta expanding into faster growing international markets

Invicta released strong results against a backdrop of a world facing both economic and geopolitical uncertainty.

Invicta released strong results against a backdrop of a world facing both economic and geopolitical uncertainty.

Published Jun 28, 2022


Invicta Holdings lifted headline earnings per share by 99 percent to 343 cents in the year to March 31 after recovering from the pandemic’s effects, and realigning a greater part of its business towards better margin equipment parts and solutions, CEO Steven Joffe said yesterday.

The group restructured into five segments: Replacement Parts Services and Solutions Industrial (RPI), Auto-Agri (RPA), Earthmoving (RPE), Capital Equipment (CE) and the Kian Ann Group (KAG) based in Singapore, declared a final dividend of 90 cents (60 cents).

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Joffe said in a telephone interview, that these were strong results against a backdrop of a world facing both economic and geopolitical uncertainty, and added that the staff had done particularly well to meet the challenges including substantial supply chain disruptions.

“Also, the group restructured from approximately 50 percent of its business being derived from capital equipment sales, to about 95 percent now being derived from parts and solutions operations,” he said.

Revenue for the continuing operations increased by 15 percent to R7.2 billion. The gross margin was at a satisfactory 31 percent.

Operating profit before net finance income on financing transactions and forex improved by 15 percent to R670.6m. Net profit increased 75 percent to R520.8m.

Three key corporate events also impacted results.

The restructuring of the Singaporean operations, KAG, resulting in deal-related taxation of R16m, a R14m impairment of Invicta’s Ukrainian operations; and the acquisition of KMP Holdings, a supplier of after market heavy duty diesel engine parts for industrial and agricultural machinery in Chertsey (UK) as well as Houston and Miami (US). This acquisition was performing well so far, said Joffe.

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The acquisition was made in January and would only start contributing to Invicta’s results in the new financial year.

“We will continue growing a diversified sustainable parts solutions group, providing above market returns to stakeholders. We constantly review and restructure our businesses to ensure they achieve the desired returns,” he said.

Joffe said their focus was to have a geographical and a sectorially diverse group within four years, with 50 percent of group profits being derived outside of South Africa, because markets were growing faster outside the country.

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He pointed out that the world was in a precarious position due to the zero-Covid strategy in China, and the associated lockdowns that had a detrimental impact on the world’s supply chain.

The war in the Ukraine and its impact on commodity and food prices were also being felt worldwide.

Rising inflation globally would result in borrowing costs increasing, creating more pressure on the consumer.

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With so much uncertainty, the group would continue to reduce net debt although gearing at year end was a “very manageable 20 percent” he said.

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