KAP looks at African market

DIVERSIFIED industrial group KAP says it is focusing on growth in African markets as revenue rose 9% and headline earnings per share from continuing operations shot up 14% in the six months to December.

Cash generated before working capital was up 12%, with the group’s gearing ratio reduced to 48% from 54%.

CEO Gary Chaplin yesterday said that he was “pleased” with the results. He said the company had streamlined itself over the past three years and was now seeing the benefits. This included selling both its food and footwear businesses.

“A lot of that has come to fruition over the past six months,” Mr Chaplin said.

This had left KAP with a “core base of good assets”.

The timber and manufacturing divisions had been rationalised into a single industrial division. The group had also concluded the buyout of Restonic last month and said it could now create a fully integrated African bedding business.

The diversified Unitrans logistics division represents 51% of KAP’s revenue, with the industrial business accounting for the remaining 49%. Unitrans operates in the fuel, agriculture, mining, freight and passenger transport segments. It saw revenue rise 6% to R4.2bn, while operating profit rose 10% from the same period last year.

“Any benefits relating from fuel price decreases are passed on directly to our customers,” Mr Chaplin said.

The diversified industrial division includes timber, chemical, automotive and furniture operations. It lifted revenue 11% to R4bn in the period, and operating profit rose 6% to R347m.

However, the furniture components business, comprising foam, springs and textile manufacturing, was hit by poor trading conditions in the South African furniture retail market.