Invicta Holdings, the investment holding and management company, lifted headline earnings per share 43% for the six months to September 30, but withheld the dividend because of the share buybacks through the period.
CEO Steven Joffe said they were “very pleased as the group had produced a solid performance in all our operations”. He said in a telephone interview that with much of the group now focused on parts sales, and after having made sufficient provisions for unforeseen challenges, and considering the business now derived more than 40% of profit from outside Africa, they were in a good position for the second half.
The group had also traded well since the end of the interim reporting period, he said.
He said they planned to declare a dividend for the second half – the share repurchase programme had been halted, but might be re-evaluated at a later stage.
Revenue increased 7% to R3.8 billion. He said revenue figures were not strictly comparable due to a black economic empowerment (BEE) transaction last year.
Despite the disruptions at Durban port in April, Joffe said he was happy with the topline figure, as it reflected good activity in the mining and agriculture and even in the industrial markets.
Basic earnings per share rose 29% to 272c. Headline earnings increased 35% to R278 million. Headline earnings per share rose by 43% to 268c.
Joffe said the robust performance was despite logistical issues and higher energy prices that affected all aspects of the business. Inventory levels were increased to deal with these factors as well as Covid-19 restrictions.
Joffe said the offshore operations produced a strong performance, further enhanced by the weaker rand – these businesses contributed more than 40% to group profit. Cost cuts implemented during the pandemic added to the performance.
A R33m foreign exchange gain and equity accounted earnings from Kian Ann Group (KAG) in China, of R90m, boosted operating results. Joffe said Kian Ann would be expanded further.
Higher working capital requirements, strategic increases in inventory and supply chain issues absorbed R178m.
Invicta repurchased about 4.7% of its ordinary and 5% of its preference shares in the six months to the value of R167m.
The Replacement Parts Services and Solutions operations (RPS), in South Africa, the UK and US, increased revenue 137.7% to R470m, mainly due to the acquisition of KMP in January. RPS increased operating profit by 49.2% to R60m.
Kian Ann Group, which supplies and manufactures parts for heavy machinery and the automotive industry, expanded regionally and globally in China, Indonesia, Malaysia, India and the UK, with further distribution businesses in the US and Canada.
KAG contributed R90m to group earnings compared to R35m – excluding the remeasurement gain on fair value of investment of R372m – in the comparative period.
Replacement Parts Services and Solutions: Industrial (RPI), an importer and local manufacturer of industrial consumable products, services, and solutions in southern Africa, increased revenue 3.4% to R2.3bn, tempered by floods in KwaZulu-Natal, that affected certain customers and branches.
Operating profit was flat at R172m, as one-off profits on the sale of certain businesses in the comparative period was not repeated and certain provisions were made for bonuses.
Auto Agri (RPA), which operates in South Africa and certain European countries, and which focuses on the import and distribution of automotive aftermarket parts and Original Equipment Manufacturer (OEM) kits, increased revenue by 9.5% to R280m. RPA’s operating profit increased by 26.7% to R66m.
Capital Equipment and related parts and services (CE), which sells capital equipment, spare parts and provides related services to the earthmoving, construction, mining and logistics industries, increased revenue 4% to R581m, while operating profit fell by 4.6% to R49.6m.
BUSINESS REPORT