Invicta in talks over offshore deal

INVICTA, which has been actively pursuing a foreign listing for more than a year, is in talks with two global businesses regarding an acquisition.

INVICTA, which has been actively pursuing a foreign listing for more than a year, is in talks with two global businesses regarding an acquisition.

Sealing a deal with the potential partners was largely dependent on its ability to raise foreign capital through an offshore listing, and government had not given the group any indication on when it intended to grant it the approval to do so, Invicta CEO Charles Walters said yesterday.

The distributor of capital equipment, spare parts and engineering consumables, first announced its intention to pursue a secondary listing on an offshore exchange in August last year.

A foreign listing forms part of the group’s strategy to diversify its revenue stream away from SA, where a sustained slowdown in its key markets continue to negatively affect earnings.

“The Reserve Bank is happy with our plans. It is now with National Treasury but no one will commit on a timeframe.”

Mr Walters could not be drawn on where the foreign listing would be but said that the location would be linked to a significant offshore acquisition.

For the six months to the end of September, the company grew profit for the period by 5% to R302.9m, its results released yesterday revealed.

Revenue grew marginally by 1% to R5.3bn as depressed conditions in its key markets — mining, agriculture and construction — stifled growth.

“Looking at the underlying operational performance of Invicta, given the treacherous state of the economy, to grow revenue by 1% is a highly credible managerial performance,” Vunani small caps analyst Anthony Clark said yesterday.

“The year ahead may be challenging, but it is evident that management are on the ball in trying to maintain contraction to its minimum.”

Invicta said trading conditions would remain tough, but it was focused on margin and expense management, working capital control and cash generation in existing operations.