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Preliminary reviewed
condensed consolidated
financial statements1
REUNERT LIMITED
Incorporated in the Republic of South Africa
Registration number 1913/004355/06
Ordinary share code: RLO
ISIN code: ZAE000057428
(“Reunert”, “the Group” or “the Company”) and cash dividend declaration for the year ended 30 September 2022
The contents of this short-form announcement are the responsibility of the board of directors of the Company (the Board). Shareholders are advised that this short-form
announcement does not contain full or complete details and represents a summary of the information contained in the full announcement, which is accessible via the JSE link at
https://senspdf.jse.co.za/documents/2022/JSE/ISSE/RLO/AFS_2022.pdf and on Reunert’s website (https://reunert.co.za/downloads/results/2022/Reunert_Annual_Results_Shortform_2022.pdf)
from 28 November 2022. Shareholders and investors are advised to review the full announcement in making any investment decisions.
The full announcement is also available for inspection at no charge at the registered offices of the Company and its sponsor during normal business hours.
SALIENT FEATURES
16% 17% 6%
R11 129 2021 R1 231 2021 R827 2021
R9 575 R1 050 R777
REVENUE OPERATING ATTRIBUTABLE
(RM) PROFIT (RM) PROFIT (RM)
8% 9% 8%
520 2021 519 2021 224 2021
483 478 207
EARNINGS HEADLINE FINAL
PER SHARE EARNINGS PER DIVIDEND
(CENTS) SHARE (CENTS) PER SHARE (CENTS)
Overview Renewable energy
Continued upward trajectory in financial performance The renewable energy market in South Africa continued to liberalise and continues to drive
Reunert’s 2022 financial performance continued on the positive upward trajectory of the the strong growth trajectory for our businesses.
last two years. The Group delivered a 16% increase in segment operating profit, which the Reunert’s renewable energy ecosystem now includes:
Group considers to be the best metric by which to measure sustainable profit, with
i. A leading Engineering, Procurement and Construction solar energy service provider in
growth realised in all three segments. There were strong improvements in both the
Electrical Engineering and Applied Electronics Segments and another steady performance South Africa in Terra Firma Solutions;
from the ICT Segment. These performances delivered increased earnings metrics for the ii. A growing set of renewable energy solar assets (BOOs) with attractive internal rates of
Group and a strong improvement in the quality of earnings, measured by the return on return;
capital employed (ROCE). In addition, despite the numerous challenges in the Group’s
iii. A leading renewable storage solution provider in Blue Nova Energy;
supply chain resulting in additional cash being invested into working capital, the Group
retained its ability to reward shareholders through an 8% increase in dividends. The Group iv. A modern energy management capability in CBi: Energy; and
expects the impact of the electronic chip shortages and other global supply chain v. The ability to wheel energy across the grid through Apollo Energy.
challenges as outlined below to steadily reduce during the 2023 financial year, allowing for
a gradual reduction in working capital. This ecosystem enables Reunert to participate in multiple value areas across the renewable
energy environment and presents a compelling value offering to both customers and
Electronic chips and supply chain challenges
investors.
The Group suffered from the global electronic chip supply shortages and complex supply
chain dynamics. The situation worsened in the second half of 2022 and resulted in a loss Etion Create
of sales and operating profit at Nanoteq, Omnigo and Nashua. The Group’s cash position Subsequent to year-end, the Group has acquired 100% of the issued share capital of
was negatively impacted by this, as additional investment had to be made into raw Etion Create from Etion Limited (Etion) for a purchase consideration of R202 million.
material stock holdings to mitigate stock shortages. This was compounded by work in
progress and trade receivable balances increasing at year-end, as either sales were Etion Create is an original design manufacturer with a product portfolio that covers industrial,
achieved later than planned or the underlying production commenced later in the year than defence and the rail sectors. The company has a significant local and Middle East market
anticipated. However, there are early signs of an improvement in supply in the electronic presence with opportunities in South East Asia.
component market and supply chains are showing signs of recovery.
The acquisition will also result in synergies with other businesses in the Applied Electronics
Group results Segment specifically due to Etion Create’s enhanced design and manufacturing capabilities.
The Group’s 2022 results reflect the positive impact of the ongoing financial recovery in Etion Create will also increase the span of the segment product portfolio and improve the
both the Applied Electronics and Electrical Engineering Segments, coupled with an above segment’s access to key export markets.
inflationary increase in the ICT Segment’s performance. The Group increased revenue by
16% to R11 129 million (2021: R9 575 million) while the Group’s operating profit increased Quince
by 17% to R1 231 million (2021: R1 050 million). The Group’s profit for the year increased The Group continues to make good progress in assessing alternate funding mechanisms for
by 10% to R844 million (2021: R767 million) and headline earnings improved by 9%, Quince, to release the Group’s current loan funding of the book to redeploy these funds,
increasing to 519 cents per share (2021: 478 cents per share). Basic earnings per share over time, into the Group’s higher yielding strategic initiatives.
improved by 8% to 520 cents per share (2021: 483 cents per share).
Cash resources and liquidity Prospects
Pleasingly, the Group ended the year with net cash resources of R359 million After a positive financial performance in 2022, the Group finds itself in a better position than
(2021: R291 million). This cash, together with the ongoing cash generation capability of twelve months ago. In general, the Group’s order books are fuller. There are early signs of
the Group, maintains the ability of the Group to continue to honour both its commitment relief from the electronic chip and supply chain challenges and the Group’s strategic
to appropriate dividend returns to shareholders, as well as its operational requirements. initiatives continue to deliver growth.
The Group has adequate headroom in its bank funding capacity to provide the financial
The Group is positioned to deliver an improved performance in 2023 driven by:
resources to roll out the Group’s strategic initiatives.
> Expected strong growth in the Applied Electronics Segment underpinned by the export
Segmental review order books;
Electrical Engineering
The segment continued the strong growth in financial performance from the prior year as > Expected further improvement in the Electrical Engineering Segment as both the Circuit
both the Power Cable and Circuit Breaker businesses delivered good results. These strong Breaker and Power Cable businesses continue to improve their performance; and
performances, together with the continued pass-through of high commodity prices,
> Strong market growth in renewable energy.
resulted in segment revenue increasing by 13% to R6 266 million (2021: R5 551 million)
while positive operating leverage increased segment operating profit by 17% to Whilst global recessionary pressures and South African socio-economic challenges pose
R436 million (2021: R373 million). risks to growth, the Group is well positioned to continue its trajectory of financial
ICT performance.
The South African economic conditions remained challenging for the ICT Segment as
sustained loadshedding had a negative impact on the segment’s core SME customer Cash dividend
base. Importantly, despite the challenging environment, the segment grew revenue by 4% While cognisant of the economic uncertainty going forward, the Group’s free cash flow
to R2 599 million (2021: R2 490 million) and delivered a segment operating profit increase generating capacity remains intact. Notice is hereby given that a gross final cash dividend
of 6% to R644 million (2021: R608 million). No. 193 of 224,0 cents per ordinary share (2021: 207,0 cents per ordinary share) has been
Applied Electronics declared by the directors for the year ended 30 September 2022.
The Applied Electronics Segment recovered strongly as the large defence export order The dividend has been declared from retained earnings.
book enabled a much-improved level of sales and the demand for renewable energy
continued to increase. The global electronic chip shortages were a major challenge A dividend withholding tax of 20% will be applicable to all shareholders who are not exempt
throughout the year and, although it dampened performance, the segment still grew from, or who do not qualify for a reduced rate of, withholding tax.
strongly as revenue increased by 27% to R2 361 million (2021: R1 854 million) and Accordingly, for those shareholders subject to withholding tax, the net dividend amounts to
segment operating profit grew by 64% to R164 million (2021: R100 million). 179,20000 cents per ordinary share (2021: 165,60000 cents per ordinary share).
Strategy The issued share capital at the declaration date is 184 969 196 ordinary shares.
The Group’s strategy execution progressed well in 2022. The Group retains its key Income tax reference number: 9100/101/71/7P
strategic focus on the fast-growing markets of renewable energy and the expansion of the
ICT Segment. In compliance with the requirements of Strate Proprietary Limited and the Listing Requirements
of the JSE Limited, the following dates are applicable:
ICT
During the year, +OneX expanded its service offering through the acquisition of application Last date to trade (cum dividend) Tuesday, 17 January 2023
and software development and end user computing (EUC) capabilities. This increased First date of trading (ex dividend) Wednesday, 18 January 2023
service offering enabled increased engagement with the business’ enterprise customer Record date Friday, 20 January 2023
base. Pleasingly, their new-age ICT offering has continued to provide value and there has Payment date Monday, 23 January 2023
been a positive increase in the number of clients serviced by +OneX.
Shareholders may not dematerialise or rematerialise their shares between Wednesday,
The increase in service offering and client base led to growth in both revenue and
profitability in the year. +OneX’s revenue now constitutes 16% of the ICT Segment (2021: 18 January 2023 and Friday, 20 January 2023, both days inclusive.
13%), a 37% increase year on year, reflecting the competitive relevance of its value On behalf of the Board
offering in assisting its clients with their digital transformation.
Mohamed Husain Alan Dickson Nick Thomson
The Group retains its focus on the continued expansion of the ICT Segment’s new-age ICT
Chairman Chief Executive Officer Chief Financial Officer
offerings in the Solutions and Systems Integration cluster, primarily through further
acquisitions. Sandton, 24 November 2022
1
All extracted financial information from the preliminary reviewed condensed consolidated financial statements for the year ended 30 September 2022.
This announcement itself is not audited or reviewed. The review conclusion on the underlying preliminary reviewed condensed consolidated financial statements was unmodified.
The unmodified auditor’s review report is available for inspection at the registered office of the Company.
Directors Registered office
website at
MJ Husain (Chair)*, T Abdool-Samad*, AB Darko (Retiring Nashua Building
from the board of directors immediately following the
conclusion of Reunert’s 2023 Annual General Meeting)*,
A E Dickson (Chief Executive Officer),
L P Fourie (Chair of the Audit Committee)*,
Woodmead North Office Park
54 Maxwell Drive
Woodmead, Sandton
PO Box 784391
reunert.com
J P Hulley*,TNM Eboka* (Appointed 1 March 2022), Sandton, 2146 Sponsor
RJ Boettger* (Appointed 1 March 2022), S Martin*, Telephone +27 11 517 9000 One Capital Sponsor Services Proprietary Limited
DR MT Matshoba-Ramuedzisi*, M Moodley, Investor enquiries 17 Fricker Road, Illovo, 2196
Adv N D B Orleyn** (Resigned 30 June 2022), Mohini Moodley
N A Thomson (Chief Financial Officer) 28 November 2022 (publication date)
E-mail Mohinim@reunert.co.za
#16411
* Independent non-executive; ** Non-executive For more information log on to the Reunert
