INCECONNECT / 12 SEPTEMBER 2018 - 05.06 / STEPHEN GUNNION
Torre Industries has held off on paying a dividend this year as it prepares to delist from the JSE.
In July, the industrial group said increasing black ownership was imperative for its business and raising it above 51% from its current 28.5% would be easier to achieve in an unlisted environment. It said a delisting would also lower its central costs, give it more flexibility around its capital structure and improve shareholder returns. The company is 57% owned by Stellar Capital.
Releasing results for the year to end-June yesterday, Torre said it was finalising the terms of a transaction.
The group supplies parts and components to the mining, construction, industrial and automotive sectors and provides analytical and testing services to mining and construction. It also sells and rents branded capital equipment.
Over the course of the year, its Analytical Services and Capital Equipment businesses reported improved results but its Parts and Components businesses struggled in a competitive market. It impaired R36 million of goodwill due to the poor performance in Parts and Components, while assets to the value of R7 million were impaired in Capital Equipment.
Revenue eased back 0.5% to R1.45 billion over the year and operating profit declined by 1.4% to R71 million. It reported a much-reduced loss of R22 million loss from continuing operations, down from R402 million last year. Diluted headline earnings per share (HEPS) from continuing operations were flat at 3.7c and normalised HEPS rose 39% to 10.89c. Last year it paid a dividend of 3c per share.
During the year it discontinued the operations of SA French due to the ongoing poor performance of the business. It bought Traxx SA, which was integrated into its Parts and Components segment.
It said trading conditions remained challenging. While sentiment had improved in the mining sector, the construction sector remained under pressure. Continued diversification across all business sectors remained a strategic imperative, it said.
Technology disruption remains a key focus area for the Group and opportunities for corporate activity in this space continue to be monitored," Torre said.
Its shares declined 5.6% to 93c yesterday. They jumped 27% to 93c on 9 July when it first announced its plan to delist.
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