Chemical reaction boosts KAP
INCE CONNECT / 15 AUGUST 2018 - 04.57 / STEPHEN GUNNION
The diversified industrial group's chemicals division was the standout performer last year as it integrated recently-acquired Safripol
KAP International has merged Hosaf and recently-acquired plastics manufacturer Safripol into a single polymers business under the reformatted Safripol brand. It says the enlarged business has benefited from increased operational efficiencies and has been able to access broader markets. It's also resulted in a sharp rise in revenue and operating profit at its chemical division, making up for more muted growth at its industrial and logistics units.
Within its industrial segment, KAP says its Integrated Timber division did well following recent upgrades to its Piet Retief particleboard plant and an expansion at its Johannesburg plant. Autovest performed below expectation in a subdued motor retail environment and its Integrated Bedding division benefitted from recent investments in infrastructure and new technology manufacturing equipment. Revenue increased by 7% to R6.8 billion and operating profit grew by 17% to R1.1 billion.
Revenue in the diversified logistics segment rose 4% to R8.97 billion but operating profit fell by 5% to R842 million due to a disappointing performance from Contractual Logistics. KAP says after a good first half, economic conditions were particularly challenging for the remainder of the year, with reduced volumes and pricing pressures across its main areas of operations. Passenger Transport produced what KAP describes as a pleasing result in spite of a subdued economic environment and a major industry strike.
Chemicals increased revenue by 47% to R8.02 billion, while operating profit jumped 38% to R925 million.
Group revenue from continuing operations rose 16% to R23 billion while operating profit increased by 15% to R2.9 billion. Headline earnings per share improved by 9% to 60.5c and it's increased its dividend by 9.5% to 23c per share. Following a R1.5 billion rights issue in December 2016, there was a 4% increase in the weighted number of shares in issue.
The diverse nature of the group's operations, with exposure to various sectors, business models and currencies, and the recent investments in organic and acquisitive expansion support the continued growth of the company," KAP said.
KAP recently concluded an empowerment deal in its Contractual Logistics division, which remains subject to competition authority approval. It says the primary focus this year will be to optimise its expanded operations and increase its share of the market.
Its shares rose 3.7% to R7.33 yesterday.
Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER