AN IN­FRA­STRUC­TURE PLAY

Finweek English Edition - - Companies & markets - BELINDA AN­DER­SON

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.

RE­UNERT

Source: I-Net Bridge

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