KAP Industrial’s transport services group Unitrans lifted operating profit by R133 million. File photo
KAP Industrial Holdings benefited from its diverse businesses and increased its operating profit 40 percent in the year to June 30, while the dividend almost doubled.
The 29 cents per share dividend, compared with 15 cents paid out last year, is the highest the group has ever declared.
CEO Gary Chaplin said the biggest drivers of growth were PG Bison’s R216 million increase in its operation profit, the Safripol polymer business generated a record operating profit increase of R972m, while transport services group Unitrans lifted operating profit by R133m.
Looking forward, he said in a telephone interview that they anticipated a recovery in revenue and operating profit from the automotive component maker Feltex, sleep products company Restonic, a better result from transport group Unitrans and additional income from road safety solutions company DriveRisk.
These, along with operational improvements, he expected should offset anticipated negative effects of lower, although still healthy, polymer prices, lower consumer demand from high inflation and interest rates, and an easing of, but not entirely eradicated global supply chain disruptions.
He said they were “really pleased” with the past year’s results, with revenue up 17 percent to R28 billion, achieved in an “abnormal” year where operations were impacted by civil unrest, flooding, global supply chain disruptions, commodity price volatility and rising inflation.
“The results are a perfect example of the value of diversification,” said Chaplin.
In the past year strong demand for polymer and decorative wood-panel products, contributed to two of the group’s larger businesses, Safripol and PG Bison, performing particularly well.
Feltex had struggled to gain momentum given the volatility and unpredictability in customer demand due to semiconductor chip shortages, civil unrest and flooding in KwaZulu-Natal.
Restonic also saw difficult trading conditions following the civil unrest during its peak season, which caused damage to its customers’ retail stores and distribution centres.
Together with cost inflation and a softening in consumer demand, this had resulted in a disappointing performance for Restonic.
The Unitrans business, which serves the food, agriculture, mining, petrochemical and commuter transport sectors across 10 African countries, performed well but its results were offset by reduced profitability in the African operations, where bad weather impacted agricultural operations, and border restrictions impeded petrochemical operations.
“The outlook for our African operations remains favourable, with an anticipated improvement in volumes and new contracts secured during the year,” he said.
He said they had committed to some major capital projects to expand current operations, and they were also looking for acquisitions where KAP could add value.
KAP recently announced the construction of a R1.9bn medium-density fibreboard (MDF) manufacturing plant in eMkhondo, which will be completed in 2024, to support growing customer demand, and the acquisition of DriveRisk, which provides leading global video telematics and predictive analytics to prevent road accidents and improve road safety in 37 countries.
“The technology we use at DriveRisk and our unique user interfaces provide real-time event-based interventions, business intelligence tools and driver support to save lives on roads,” he said.
edward.west@inl.co.za
BUSINESS REPORT
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