Argent revives dividend as acquisition pays off

Small-cap steel products group Argent Industrial has paid its first dividend in three years, forking out about R24m to shareholders for 2022 even after a sizeable acquisition and share cancellations.

Group revenue rose 23.7% to R2.43bn in its year to end-March and profit 45% to R192m, with Argent declaring a 42c per share final dividend.

Argent, valued at R835m on the JSE, has 24 operating units throughout SA, the UK and the US. It last declared a dividend in its 2018 year, though it has been pursuing share buybacks since then.

In its 2022 year, an additional 3.3-million shares were cancelled at a cost of R42.1m, about 5.5% of the shares it had in issue at the start of the period. The group’s share buyback programme has seen shares in issue decline from more than 90-million in its 2016 year, to about 57.2-million now.

Manufacturing is the group’s biggest activity and this, together with a strategy of vertical integration and being self-sufficient, offers diversification that protects it from economic volatility, its annual report says.

These businesses cover a huge spectrum of products including concrete building products, dispensing systems and bespoke trolleys.

In September 2021, the group bought American Shutters, a Cape Town-based supplier of door and window shutter systems, for R57.4m. The acquisition complements the group’s Xpanda Security product range.

In afternoon trade on Wednesday, Argent’s shares were up 5.42% to R14.60, putting them on track for their best day in about three weeks. The shares have risen 6.65% so far in 2022, while over the same period of time the JSE’s industrials index has fallen about 16%.