ARB Holdings’ electrical division continued to perform well in the six months to December 31, 2021, but the previous year’s record performance by its lighting division could not be repeated. Photo: File
ARB Holdings’ electrical division continued to perform well in the six months to December 31, 2021, but the previous year’s record performance by its lighting division could not be repeated.
Revenue from the group, which is in the process of being acquired by privately-held Masimong Holdings, was up 7.5 percent to R1.61 billion. Taxed profit fell 3.2 percent to R106m. Headline earnings per share fell 5 percent to 39.07 cents. Net cash on hand stood at R337m versus R305m at the same time last year. No interim dividend was declared.
Group directors on Friday said that the six-month period would be remembered for the violence and looting in July, exacerbated by the continued impact of measures to control the Covid-19 pandemic.
ARB’s electrical division’s KwaZulu-Natal branches closed for the week of the violence, and 200 of the lighting division’s customers’ stores were affected, some to the extent they were unlikely to ever reopen.
The electrical division saw a 16 percent increase in revenue, and operating profit was up 16.4 percent, while the lighting division’s slowdown came from a fall in discretionary spending with major retailers, after the initial lockdowns in 2020 subsided.
The lighting division, comprising Eurolux, Radiant and Cathay Lighting, saw revenue decline by 15.3 percent, while operating fell by 26.4 percent.
The electrical division comprises ARB Electrical Wholesalers, GMC Powerlines, ARB Global, CraigCor and Consolidated Electrical Distributors (CED).
The CED operation had secured an alternative switchgear range. A new product, TOSUNlux, was launched and was expected to quickly contribute towards results.
The working capital management improvement achieved in the previous financial year could not be sustained, mainly due to ongoing supply chain problems, where delays of up to seven months were experienced as a result of pandemic-driven shipping problems, container shortages and local port inefficiencies.
The focus for both the electrical and the lighting divisions for the foreseeable future would remain on managing both working capital and supply chain challenges.
The expected increase in infrastructure development – from which the electrical division should benefit – had not yet materialised.
The challenges of the subdued economy and lingering effects of the pandemic were expected to continue for the foreseeable future.
edward.west@inl.co.za
BUSINESS REPORT ONLINE