Eqstra Holdings [JSE:EQS] on Tuesday reported operating profit of R1.03bn in the year to end June, a rise of 10.6% driven primarily by improving efficiencies, restructuring of operations and the identifying and ring-fencing of excess assets.
Eqstra is an integrated leasing and capital equipment group with value-added services in contract mining, passenger and commercial vehicles, industrial equipment and construction. The improvement in operating profit was achieved in spite of revenue declining by 5.2% to R9.4bn. Cash generated by operations rose by 4.9% to R3.1bn. Headline earnings per share (Heps) increased by 2.6% to 78.7 cents per share as overall group performance marginally improved in a subdued market. Despite the impairment on leasing assets, earnings per share (EPS) increased by 1.2% to 61.3c per share. Jannie Serfontein, recently appointed as CEO of Eqstra, described the full-year performance as encouraging in the context of exceptionally difficult conditions in the mining and construction sectors. “Management has made important changes to the strategy, structure and operations of the business in response to the lower demand globally for mining commodities and the stalled condition of the construction sector,” said Serfontein. During the financial year, the fleet management and logistics and industrial equipment divisions continued to demonstrate the resilience of their respective business models.The industrial equipment division’s forklift businesses, both in SA and the UK, performed well with the SA market share increasing to 35%. The heavy equipment and 600SA business units performed below expectations, largely on the back of a depressed order book. Expansion in the UK is progressing well with the securing of the Konecrane distributorship.
The fleet management and logistics division continued to perform well. During the year, the division achieved a 13.3% unit increase in value-added products and developed a successful supply chain partnership with a leading dealership group. The contract mining and plant rental division successfully implemented a turnaround strategy. Serfontein said Eqstra is confident that its new 2020 strategy of restructuring the balance sheet to become less capital intensive and more services orientated will rebase the platform for growth.-Fin24 Source: News 24 wire