AN INFRASTRUCTURE PLAY
OPPORTUNITIES • Further spending on infrastructure. • Projects such as the Gautrain and the upgrading of airports and stadiums ahead of the 2010 Soccer World Cup should also drive the demand for electrical cables. Telkom’s planned capex spending, mobile network and equipment upgrades and the uptake of new technologies by operators in SA and Africa. THOUGH delivering returns of more than 60% (including a special dividend of 200c/share) – prospects continue to look good on the back of further infrastructure spending. Operations include electrical supplies (Cbi-electric), office equipment (Nashua), consumer electronics (Panasonic), telecommunications services (Nashua Mobile), telecoms equipment (40% of Siemens Telecommunications) and defence (though some of the lumpy revenue Reutech businesses could be sold this year).
The group delivered attributable profits of more than R922,8m (up 29%) on revenue growth of 17% to R8,2bn for the year to September 2006. Strong cash flows meant a total dividend of 273c for the financial year and the return of excess capital towards year-end.
In November, Reunert announced the sale of a 9,5% stake in the holding company (supplied from treasury shares) worth R1,2bn to a black economic empowerment consortium called Rebatona Investments; with 70% owned by an educational trust. RISKS Further price deflation affecting the consumer electronics business.