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2023
Audited consolidated
REUNERT LIMITED
Incorporated in the Republic of South Africa
JSE and A2X share code: RLO
Registration number: 1913/004355/06
ISIN code: ZAE000057428
financial statements1
and cash dividend declaration for the year ended 30 September 2023
(“Reunert”, “the Group” or “the Company”)
The contents of this announcement are the responsibility of the board of directors of the Company (the Board). Shareholders are advised that this announcement does not contain full or
complete details and represents a summary of the information contained in the Group consolidated annual financial statements for the year ended 30 September 2023
(Group AFS), which are accessible via the JSE link at https://senspdf.jse.co.za/documents/2023/JSE/ISSE/RLO/AFS_2023.pdf and on Reunert’s website
(https://www.reunert.co.za/downloads/results/2023/reunert-annual-financial-statements-0223.pdf) from Wednesday, 22 November 2023. Shareholders and investors are advised to review the
Group AFS in making any investment decisions.
The Group AFS have been audited by Deloitte & Touché, who expressed an unmodified audit opinion thereon.
SALIENT FEATURES
GROUP OPERATING ATTRIBUTABLE
REVENUE (RM) PROFIT (RM) PROFIT (RM)
24% 16% 11%
R13 781 R1 431 R919
2022: R11 129 2022: R1 231 2022: R827
EARNINGS PER HEADLINE FINAL DIVIDEND
SHARE (CENTS) EARNINGS PER PER SHARE
SHARE (CENTS) (CENTS)
11% 16% 11%
578 602 249
2022: 520 2022: 519 2022: 224
Overview ICT
The ICT Segment had a challenging year as the segment’s key Small and Medium Enterprise
2023 delivered increased value for shareholders
(SME) customer base came under increased pressure due to the weakening South African
In 2023, Reunert delivered a pleasing growth in financial performance and the continued
macro-economic conditions. Segment revenue increased by 18% to R3 064 million (2022:
execution of the Group’s strategic growth initiatives. The Group’s efforts to reduce working
R2 599 million) and segment operating profit increased by 2% to R660 million (2022:
capital yielded a positive improvement in cash generation, which enabled the dividend to be
R644 million) as several matters negatively impacted the segment.
increased by 11% (2022: 8%). The quality of the Group’s earnings also improved for the year
and return on capital employed increased to 17,4% (2022: 16,1%). The financial performance of the segment was negatively affected by record levels of
loadshedding, which reduced the minutes sold by Electronic Communications Network (Pty)
Group results Ltd (ECN) by 17%, the sale of R250 million of the Quince book to fund the acquisition of Etion
The Group’s revenue increased by 24% to R13 781 million (2022: R11 129 million). Improved Create, and the South African Post Office (SAPO) being placed under business rescue, all of
operating leverage was delivered by the Group as segment operating profit increased by 28% which resulted in a reduction in segment operating profit. +OneX accelerated its digital
to R1 462 million (2022: R1 140 million). The Group’s profit for the year increased by 14% to integration income and SkyWire (Pty) Ltd (SkyWire) leveraged its national broadband
R959 million (2022: R844 million) and headline earnings per share increased by 16% to connectivity network to deliver notable year-on-year operating profit performances. The
602 cents per share (cps) (2022: 519 cps) while basic earnings per share increased by 11% to tightening credit conditions resulted in an increase in the allowance for expected credit losses
578 cps (2022: 520 cps). as measured in accordance with IFRS 9 – Financial Instruments.
Strategy Applied Electronics
The Group’s three key growth strategic initiatives remain the investment into: The Applied Electronics Segment had an excellent year as defence revenue reached a
i. expansion of our ICT Segment offering to create market leading digital integration multi-year high and the demand for the segment’s renewable energy products and solutions
capabilities; remained positive. These dynamics resulted in segment revenue increasing by 51% to
R3 559 million (2022: R2 361 million) and delivered a segment operating profit increase of
i. our suite of assets participating in the rapidly growing renewable energy market; and
163% to R432 million (2022: R164 million).
iii. the increase in our international revenues, specifically focused on the Applied Electronics
and Electrical Engineering Segments. The management teams performed well as they executed these order books delivering
year-on-year improvement in financial performances at the Radar, Fuze and Encryption
During the 2023 financial year, the Group’s strategic execution on all three initiatives remained on businesses. This was bolstered further by the results of recently acquired Etion Create.
track and was augmented by the completion of the restructure of the Group’s capital structure. Together with the increased revenues, margins improved as higher volumes enabled improved
ICT operational efficiencies and a good product mix was supported by a foreign exchange rate that
The ICT Segment’s Solutions and Systems Integration (S&SI) Cluster was expanded through weakened to an average of R18,17: 1USD (2022: R15,82: 1USD) for the year.
two acquisitions in 2023. The acquisition of shares in IQ Business (Pty) Ltd (IQ Business) was The renewable energy market continued to grow in 2023, but experienced a marked increase in
concluded in July and Plus 1X Solutions (Pty) Ltd’s (+OneX) value offering was expanded by the competition as new entrants and products entered the market. The Energy Storage business
acquisition of a cyber security capability. The S&SI Cluster is now a leading player in the rapidly delivered an improved financial performance as residential and small commercial battery sales
growing digital integration market to large and enterprise clients and is expected to grow at a increased on the back of record loadshedding.
higher rate than the other ICT businesses in the segment.
The Solar Energy business delivered a build rate largely in line with the prior year. The business’
Renewable Energy leadership team invested into human capital to enable an increased capacity of solar assets.
The market conditions for the Group’s renewable energy businesses continued to strengthen This yielded positive results in the second half of the financial year as an improved solar project
as the long-term trend of private sector energy investment accelerated. These large-scale pipeline and deals were secured. Demand in commercial and industrial markets remained high
investments also benefit the Group’s power cable business. The investment required into the and the business enters the 2024 financial year with the expectation of an improved financial
upgrade of the country’s transmission system will further bolster the Group’s participation in performance and a considerable increase in BOO assets under ownership.
the renewable energy market.
The Group continued to invest into its Build-Own-Operate (BOO) solar asset portfolio which Prospects
currently has 57MW of owned, under construction and near financial-close solar assets. The The 2023 financial year yielded a positive growth in the financial performance of Reunert and
storage business grew strongly this year and the large-scale containerised storage solutions, delivered increased value for shareholders. Reunert will continue to face the risks and
which form a critical component of the country’s renewable energy needs, reached scale and challenges associated with the general South African macro-economic environment, which we
will underpin the growth in this business going forward. do not expect to improve in the first half of 2024 and which will continue to place pressure on
our key customer segments. Despite this the Group is well placed to deliver growth in financial
International revenues performance in 2024. The timing of defence export deliveries and large cable contracts bias
The Applied Electronics Segment’s international revenues increased during the year as new growth towards the second half of the 2024 financial year.
markets were successfully accessed. The segment’s world class intellectual property and the
investment into an expanded product portfolio have positioned the defence businesses to The Group’s expected performance is underpinned by:
continue their growth over the medium-term. i. the Electrical Engineering Segment on the back of solid Power Cable order books, on-going
Enhanced financial capacity private investment into renewable energy and the strengthening export demand for Circuit
The Group has successfully converted a substantial portion of its short-term uncommitted Breakers;
banking facilities into longer-term committed facilities. ii. the incorporation of IQ Business into the ICT Segment;
This programme was undertaken in two distinct parts: iii. the continued growth of our renewable energy businesses; and
iv. the record defence order book.
i. Secured longer-term facilities that are available to be used to meet the financing needs of
all the Group’s local subsidiaries, excluding Quince Capital (Pty) Ltd (Quince); and
Cash dividend
ii. To externally finance the Group’s rental loan and receivables book owned by Quince. This Notice is hereby given that a gross final cash dividend No. 195 of 249,0 cents per ordinary
allows for the redeployment of the Group’s internal funding. share (September 2022: 224,0 cents per ordinary share) has been declared by the directors for
This process, and the ability of Quince to repay the internal loans, has ensured adequate capital the year ended 30 September 2023. The dividend has been declared from retained earnings.
to deploy to the Group’s strategic initiatives and to meet the Group’s operational requirements. A dividend withholding tax of 20% will be applicable to all shareholders who are not exempt
It also achieved the strategic objective of releasing lower earning funding from the Quince book from, or who do not qualify for, a reduced rate of withholding tax. Accordingly, for those
for redeployment into opportunities that yield higher returns. shareholders subject to withholding tax, the net dividend amounts to 199,2 cents per ordinary
share (September 2022: 179,2 cents per ordinary share). The issued share capital at the
Segmental review declaration date is 184 969 196 ordinary shares.
Electrical Engineering Income tax reference number: 9100/101/71/7P.
The segment delivered another year of financial growth as the Power Cable and Circuit Breaker
businesses delivered solid results. These performances increased the segment revenue by In compliance with the requirements of Strate Proprietary Limited and the Listings Requirements of
14% to R7 159 million (2022: R6 266 million) and the segment operating profit by 27% to the JSE Limited, the following dates are applicable:
R552 million (2022: R436 million). Last date to trade (cum dividend) Tuesday, 23 January 2024
Power Cable volumes increased and product mix improved both in Zambia and South Africa. First date of trading (ex dividend) Wednesday, 24 January 2024
The higher factory loading increased operational efficiencies, which together with the improved Record date Friday, 26 January 2024
product mix led to better margins. In South Africa, the investment into renewable energy Payment date Monday, 29 January 2024
continues to support the local power cable volumes and this is expected to continue into the
Shareholders may not dematerialise or rematerialise their shares between Wednesday,
medium-term.
24 January 2024 and Friday, 26 January 2024, both days inclusive.
The Circuit Breaker business generated good product sales in South Africa and in most of their
export markets, with the exception of the USA where destocking by the customers reduced On behalf of the Board
volumes sold for the first three quarters of the financial year. The solid overall volumes were Mohamed Husain Alan Dickson Nick Thomson
augmented by an improved margin performance as supply chain costs eased and the impact of Chairman Chief Executive Officer Chief Financial Officer
the price increases in the prior financial year were realised.
Sandton, 21 November 2023
1
Extracted financial information from the Group AFS.
This announcement itself is not audited or reviewed. The audit conclusion on the underlying consolidated financial statements was unmodified. The unmodified auditor’s report is
available for inspection at the registered office of the Company.
Directors Registered office For more information log on to the Reunert website at
reunert.com
MJ Husain (Chair)*, T Abdool-Samad*, Nashua Building
AE Dickson (Chief Executive Officer), Woodmead North Office Park
LP Fourie (Chair of the Audit Committee)*, JP Hulley*, 54 Maxwell Drive
TNM Eboka*, RJ Boëttger* , S Martin*, Woodmead, Sandton
PO Box 784391
Dr MT Matshoba-Ramuedzisi*, M Moodley,
Sandton, 2146
NA Thomson (Chief Financial Officer), GB Dalgleish*. Telephone +27 11 517 9000 Sponsor
One Capital Sponsor Services Proprietary Limited
Investor enquiries 17 Fricker Road, Illovo, 2196
#17267
* Independent non-executive Karen Smith
E-mail invest@reunert.co.za. 22 November 2023 (publication date)
