Value earnings up in tough climate
Business Day - May 17th 2012, 10:03
Regional logistics and supply chain services provider Value Group â€™s diluted headline earnings per share rose 3,8%, from 58c to 60,2c in the year to February, which the company said was strong given market factors.
"Although the groupâ€™s customer base expanded, the year under review proved to be challenging, with the group facing a number of extraneous market factors," Value said at the release of its financial results yesterday.
Financial director Clive Sack said he was "happy" with the 7% growth in adjusted headline earnings as there were disrupted fuel supplies and operational changes in certain business units.
"Conversely, unexpected volume decline in the second half impacted revenue growth and profitability," he said.
Revenue for the year rose 13%, from R1,6bn to R1,8bn.
The companyâ€™s customers had felt the brunt of rising and volatile fuel prices, he said.
Expansion of the groupâ€™s infrastructure, in addition to increased fuel, labour and maintenance costs, contributed to the gross margin falling from 43,8% to 42,4%.
However, the groupâ€™s gross profit improved 10%, to R763,1m from a year ago.
Mr Sack said the company would continue spending large amounts on capital projects.
He said it had bought new vehicles and upgraded its fleet using cash reserves.
Cash and cash equivalents fell from R80m to R64m, "reflecting vehicle trades", he said. The companyâ€™s cash reserves also allowed the business to make its dividend payouts less conservative.
Mr Sack said he expected continuing fuel price rises and a weak market to continue into the next financial year.
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