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KAP shares up on annual results

HEPS increase by 19%.

The share price of diversified industrial company KAP Industrial Holdings increased by almost 1% to R6.10 on Tuesday after the announcement of the financial results for the year ended June 30.

The value of the share increased by almost 10% over the last 90 days and 53% over the last year.

KAP reported an 8% increase in revenue, compared with the previous financial year to R15.6 billion, mainly from the Diversified Industrial segment. Headline earnings per share from continuing operations increased by 19% to 40.6 cents.

During the reporting period the group acquired bedding company Restonic and made progress with establishing an integrated bedding division with a national manufacturing and distribution footprint.

KAP disposed of the non-core footwear business and the Weatherboard Sawmill with its associated plantations. The Fresh Freight business was discontinued.

The Integrated Timber and Manufacturing division was rationalised into a single Diversified Industrial segment. A single Unitrans Logistics division was established by the consolidation of the Fuel Agriculture and Mining division and the Freight and Logistics division.

Looking forward, KAP expects the South African economy to remain subdued and will therefore focus on optimising existing operations to increase market share and growth in the rest of Africa.

The group plans the expansion of its Hosaf facility to increase PET production and will upgrade its Piet Retief particleboard plant to accommodate new technology, which should result in raw material savings.

KAP further plans the installation of a gloss finishing line at PG Bison’s Boksburg operation to be commissioned in July next year. The paper impregnation line being installed at Woodchem should be ready for commissioning in November 2015.

The group expects cost savings and increased efficiency thanks to the consolidation of the Unitrans divisions into a single operation and sees this as a basis for growth in South Africa and the rest of the continent.

KAP is still looking for further opportunities and is well positioned to take advantage of such thanks to strong cash generation and reduced gearing.

A gross dividend of 15c per share was declared, up from 12c the previous financial year.

 

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