Tax pro­vi­sion sees prof­its surge 228 per­cent |

It over­came some chal­leng­ing con­di­tions

Pretoria News - - BUSINESS REPORT - SANDILE MCHUNU [email protected]

JSE-LISTED in­vest­ment hold­ing and man­age­ment com­pany In­victa Hold­ings over­came some of the chal­leng­ing con­di­tions to re­port a strong surge in prof­its for the six months to end Septem­ber. The group was hit by a lack of in­fras­truc­ture devel­op­ment in the coun­try, the demise of nu­mer­ous large lo­cal con­struc­tion com­pa­nies, a down­turn in the Asian mar­ket and a drought in the agri­cul­tural sec­tor.

This re­sulted in the Cap­i­tal Equip­ment Group seg­ment re­port­ing a de­cline of 8 per­cent in rev­enue to R2.3 bil­lion, while its op­er­at­ing profit be­fore in­ter­est on cap­i­tal equip­ment fi­nanc­ing trans­ac­tions and for­eign ex­change move­ments de­creased by 21 per­cent to R148 mil­lion in the six months to end Septem­ber.

Chief ex­ec­u­tive Arnold Gold­stone said yes­ter­day that a lack of liq­uid­ity and un­cer­tainty in the agri­cul­tural sec­tor re­sulted in a de­cline in de­mand for com­bine har­vesters and higher kilo­watt trac­tors. De­spite the de­cline in vol­umes in ev­ery con­struc­tion equip­ment sec­tor, there is still ac­tiv­ity in higher value, large equip­ment used in the min­ing sec­tor,” Gold­stone said.

How­ever, de­spite the de­cline in CEG, the group still man­aged to grow its over­all prof­its by 228 per­cent to R208m, up from R63m com­pared to last year, as a re­sult of the non-oc­cur­rence of the once-off tax pro­vi­sion.

In Septem­ber 2018 re­sults, the group reached a set­tle­ment with SA Rev­enue Ser­vice for a set­tle­ment of R750m. In­victa main­tained its group rev­enue at R5.3bn and op­er­at­ing profit de­clined by 6 per­cent to R383m. Its ba­sic earn­ings per share in­creased by 1 046 per­cent to 149 cents a share and head­line earn­ings per share in­creased by 2 029 per­cent to 149c.

The group did not de­clare a div­i­dend,given the higher gear­ing lev­els, nd said it would re­sume a nor­mal div­i­dend pol­icy once cash flow and debt lev­els per­mit.

Gold­stone said a pleas­ing fea­ture of the pe­riod had been the ma­jor im­prove­ment in cash gen­er­ated from op­er­a­tions that in­creased by 426 per­cent from R99m to R518m for the cur­rent pe­riod. “In­victa’s strate­gic fo­cus is based upon op­ti­mis­ing cur­rent op­er­a­tions and cash flows to right-siz­ing the level of debt that re­sulted from the 2018 tax set­tle­ment of R750m,” he said.

In­victa shares closed 4.50 per­cent lower at R21 on the JSE yes­ter­day.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.