Picture: ISTOCK
Picture: ISTOCK

Spanjaard, the listed manufacturer and distributor of lubricants and chemical products, on Friday said it had turned around its performance as the small-cap company increased sales to a record R126.2m in the year to end-February. 

The group, which supplies the industrial, automotive, marine, mining, electrical and household markets, has seen a strong surge in exports. Full-year export sales grew 60.4% to R19.39m and this increased the export segment’s contribution of total sales to 15.4%, up from 10.3%.

The increase in exports is in line with the guidance the company gave during its half-year results when it said it expected strong exports growth. Spanjaard said sales in the exports segment diversified its revenue streams and were expected to increase further.

“There has been a gratifying turnaround in our year-on-year financial performance,” the company said. It attributed the improved performance to tight cost control. Operating expenses, which include distribution costs, were down 4.7%.

“We continued our strict cost management during the year, maintaining our good cash collections and keeping bad debts at low levels. This positive financial performance was aided by our stringent customer vetting process and supported by the services of [credit insurance company] Credit Guarantee,” Spanjaard said.

The group recently made major changes to its structure, including the discontinuation of the operations of loss-making business Coppermet. That business struggled to survive against cheaper alternatives, especially those from China. Coppermet supplied specialist graphite powders for friction industry products, including brake pads.

The company also deregistered Spanjaard UK in October 2018. Spanjaard UK was dissolved in March 2019.

The company’s consumer goods sales increased 11.5% to R26m, up from R23.46m, while industrial segment sales were flat year on year at R44.19m, compared with R44.35m, “reflecting the general lack of business activity within the mining and manufacturing sectors of the economy”.

The group said it expected improved performance from the industrial segment in this financial year, largely thanks to a improved prospects in certain mining markets in Africa.