Invicta to concentrate on its core business
INVESTMENT holding and management company Invicta Holdings has said that it would continue building on to its core businesses after selling some units that did not fit in with its strategy going forward.
The group said the strategic focus now was to generate cash in its existing businesses and to invest in sound acquisitions that would help to diversify its revenue streams both within its product groups and geographically. It sold BSG to Steinhoff Doors and Building Materials in February in order to focus on the core competency of the Invicta Group, which are industrial consumables, capital equipment and parts.
It said the purchase consideration was based on an enterprise value of R732 million for 100 percent of BSG and excluded certain manufacturing and property businesses currently forming part of BSG, which would be disposed of separately.
Invicta said it was still waiting for approval from the Competition Commission, which it hoped would be given in the next few months.
“The businesses that make up the Invicta Group have strong fundamentals and enjoy significant competitive advantage. Management will continue to consolidate the strengths of the current businesses that make Invicta one of the leading suppliers of industrial consumable products, capital equipment and parts in Southern Africa,” the group said.
Invicta reported a 48 percent increase in operating profit to R1.01 billion for the year to end March, up from R680.98 million while profit from continuing operations was up 22 percent to R575m. Revenue from continuing operations rose 9.5 percent to R9.6bn while headline earnings per share from continuing operations came in at 466 cents a share, up from 341c as compared to 2016.
The group said it achieved these results despite the tough trading environment which included high volatility in the rand exchange rate, the worst drought, continued political turmoil and a recession in South Africa in the third and fourth quarters of the financial year. It would now focus on two segments: the Engineering Solutions, which grew revenue by 8.5 percent, and Capital Equipment, which grew its revenue by 10.5 percent for the year.
The board has declared a gross cash dividend of 94.51c per ordinary share, and this translated to 167c for the year, up by 18 percent from 142c declared in 2016. The group said its new branches in Tanzania, the Democratic Republic of Congo and Ghana had started to gain momentum, adding to the non-South African operations already in place in Zambia, Mozambique, Swaziland, Namibia and Botswana.
Invicta shares dropped 0.46 percent on the JSE yesterday to close at R54.
Invicta, the listed investment holding and management company, released their full year results yesterday, declaring a cash dividend of 94.51c a share.