Engineering a success
WHILE MANY COMPANIES in vehiclerelated and capital equipment industries are burning from the global recession, bearings and agricultural machinery importer Invicta Holdings seems to be taking it all in its stride. In the year to March it reported a 36% revenue increase and 21% in profit growth on that.
Invicta’s two biggest operating divisions reported operating income growth in excess of 30%, while operating margins improved to 11%. Total earnings per share of 437c translate to an earnings multiple of 5,12 times at its current price of 2220c/ share.
Through its Bearings Man division, Invicta imports bearings and power transmission products, while its Capital Equipment division imports large agricultural machinery, construction and earthmoving products.
And Invicta hasn’t rested on the acquisitions front, with two having taken place in its past financial year. Its R63m Goldquest International Hydraulics purchase, plus that of Criterion Equipment (distributor of the TCM forklift range), will allow Invicta to enter the hydraulics market while Criterion complements its existing earthmoving business.
Invicta says the current depressed market environment lends itself to more acquisitions and that it has put in place the necessary funding to take advantage of such opportunities when they arise.
Management has demonstrated it’s prepared to back those claims with action. CE Arnold Goldstone has been a consistent buyer of its share throughout most of 2008 and early this year. That’s normally a good lead for prospective investors to follow.
Analysts at I-Net Bridge rate Invicta a solid buy at the 2200 level and forecast a slight increase in earnings to 482c/share by March next year and 489c in 2011. Dividend should increase from the current 138c to 192c and 194,5c/share by 2011.