(Alliance News) - Barloworld Ltd on Monday declared a special dividend, following a swing to an annual profit and growth driven by acquisitions.
For the financial year that ended September 30, the diversified industrial firm swung to a pretax profit of ZAR3.48 billion from a loss of ZAR973 million in the prior year.
Revenue grew 23% to ZAR41.55 billion from ZAR33.91 billion, driven by newly acquired Equipment Mongolia and Ingrain. Ingrain was acquired towards the end of calendar 2020 and renamed from Tongaat Hulett Starch. Equipment Mongolia was bought in September of last year.
During financial 2021, Barloworld integrated Equipment Mongolia and Ingrain, which performed better than anticipated, and sold its motor retail assets. It has commenced with the sale of the Logistics business.
Operating profit jumped to ZAR4.3 billion for the 12-month period from ZAR1.9 billion, with Equipment Mongolia and Ingrain contributing 19% of total operating profit.
Barloworld declared a dividend of 300 rand cents per share, bringing the total payout to 437 cents a share. Last year, no dividend was paid.
In addition, the company declared a special dividend of 1,150 cents per share.
Given the strong balance sheet, healthy cash generation and proceeds from the disposals, Barloworld decided to resume payment of a dividend this year, said Chief Executive Dominic Sewela.
"The group has delivered an exceptional set of results despite the challenges we withstood in the preceding year," Sewela said.
"Our results have benefited from the acquisitive growth provided by Equipment Mongolia and Ingrain, the exceptional performance from the southern African and Russian equipment businesses, and the impressive turnaround of the car rental business," he said.
Future acquisitions will be considered once the company has completed its remaining portfolio changes, he added.
Barloworld said its outlook for the financial year 2022 is positive, but it remains concerned about the effects of Covid-19. These are showing up particularly in the supply chain constraints being experienced globally and in its car rental business, which remained the most affected by constraints to travel and the impact of lockdowns.
The company said it is encouraged by the performance of its industrial equipment and services businesses and sees opportunities in the year ahead.
Equipment Southern Africa's firm order book remains strong, supported by a positive outlook for mining, while the construction industry is expected to recover as infrastructure and energy projects gathered momentum.
Equipment Eurasia's outlook for 2022 also is positive, as the recovery in the coal market is expected to continue and the company realises further benefits from the integration of Mongolia into the Eurasia division.
In Ingrain, the outlook is for maize prices to trade closer to international prices, which will support margins going forward, with international starch and glucose prices remaining high.
By Artwell Dlamini; artwelldlamini@alliancenews.com
Copyright 2021 Alliance News Limited. All Rights Reserved.