JOHANNESBURG - Reunert Limited has reported substantial financial growth for the year ending September 2023, with the company's revenues climbing to R13.8 billion, marking a significant 24% increase from the previous year. Operating profits followed suit, leaping by an impressive 28% to reach R1.5 billion. Attributable profits saw an 11% rise, totaling R919 million, while headline earnings per share jumped by 16% to 602 cents.
Shareholders have reason to celebrate as the company announced a dividend increase to 249 cents per share, up from last year’s payout of 224 cents. This financial boost reflects strategic initiatives that included expanding ICT capabilities, investing in renewable energy, and extending market reach beyond South Africa—especially capitalizing on Zambia's more favorable business environment.
The Electrical Engineering segment reported a revenue increase of 14%, hitting R7.2 billion with operational profit surging by 27%. This was primarily due to enhanced factory loading efficiencies within its power cable operations. The Applied Electronics division also had a remarkable year, with revenue skyrocketing by 51% to R3.6 billion and operational profit soaring by a staggering 163%, driven by peak defense revenues and contributions from Etion Create post-acquisition.
Despite these gains, Reunert faced challenges in the ICT segment where load-shedding impacted network sales and external corporate restructuring issues arose. Nevertheless, this segment still managed to grow its revenue by 18%, reaching R3.1 billion, with a modest profit growth of two percent.
Looking ahead into the fiscal year of 2024, Reunert is positioned with record order books and plans for further expansion, despite the ongoing challenges posed by load-shedding which continues to affect its operations.
InvestingPro Insights
Reunert Limited's impressive financial performance is echoed by several key metrics and insights from InvestingPro. The company's revenue growth has been accelerating, which aligns with the substantial 24% increase in revenues reported for the year ending September 2023. This acceleration is a testament to Reunert's robust strategic initiatives and expansion efforts.
InvestingPro Tips highlight that Reunert is a prominent player in the Industrial Conglomerates industry, which is indicative of its competitive position and ability to leverage market opportunities, such as those in Zambia. Additionally, the company has maintained dividend payments for 32 consecutive years, demonstrating a strong commitment to shareholder returns. This is particularly relevant given the recent dividend increase to 249 cents per share.
From an investment perspective, the company's stock is trading at a low P/E ratio relative to near-term earnings growth. This suggests that the stock may be undervalued considering its recent financial performance and could be an attractive opportunity for investors seeking growth at a reasonable price.
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