Cape Town - Argent Industrial, the steel merchant and manufacturer, lifted revenue by a third to touch the R1 billion mark in the year to March as good performances from its manufacturing units outweighed a knock in the steel trading division from lower steel prices.
With steel prices set to rise in July, chief executive Treve Hendry was confident yesterday of more good news in financial 2007 due to an expected improved performance from Argent's steel trading and processing companies.
"From July 1 it's happy days," he said, adding that steel price increases would boost the value of R233 million of predominantly steel stock on Argent's books. The average increases are 12 percent for plate steel, 4 percent for hot-rolled steel and 25 percent for galvanised products.
Hendry was confident that Argent was on course to meet a target of R2 billion in turnover by 2009 due to anticipated growth from all its businesses.
In the year under review, Argent increased earnings 26 percent to R107.7 million although earnings at the share level grew less rapidly, by 16 percent to 147.4c, after the group issued 8 million shares and raised R88 million during the year to fund acquisitions.
A small portion of top-line growth came via the purchase last year of security door manufacturer Xpanda for R49.3 million and of Toolroom Services for R55 million in February. The bulk of the increase was as a result of an "exceptional" year for units such as Giflo Engineering, a manufacturer for the motor industry.
Other subsidiaries that performed well were Excalibur Vehicle Accessories, Hendor Mining Supplies, which makes scrapers for the mining industry, and Jetmaster, the maker of fireplaces and braais.
Argent's primary business is Phoenix Steel, a small rival to steel merchants Macsteel and Trident, which had to contend with prices dropping by about 10 percent during the year. Phoenix delivers steel to the other Argent businesses.
The group declared a final dividend of 14c a share, bringing the year's total payout to 27c a share, a 17 percent rise over the previous year. On the JSE's diversified industrial sector yesterday, Argent shares were unchanged at R12.20.