ARB Holdings flags profit rise and improved second half
Profit for the year ended June is forecast to jump more than a third from a year earlier after benefiting from a healthy stock position in the first half
11 August 2021 - 11:56
byKarl Gernetzky
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Electrical wholesaler and lighting distributor ARB Holdings has flagged a more than one-third rise in profit for its year to end-June, indicating a further improvement in the second half after benefiting from a good stock position in the first six months.
The group, which has a lighting business and also provides electrical cabling and overhead line equipment, expects headline earnings per share (heps) — the primary profit measure in SA that excludes certain one-off items — to rise by 35% to 40% in its year to end-June, implying a profit rise of up to R56m.
This is an improvement from the 25.9% heps growth in the first half, when it said its stock position had proved a significant factor in its success even as the pandemic continued to disrupt local and international supply chains. The group was affected by lockdowns in the first half of 2020, but its forecast of heps of as much as 83.9c is also an improvement on the 58.2c it generated in its 2019 year.
ARB has been hit in recent years by a drop-off in infrastructure spending by Eskom and municipalities, with such projects now a smaller part of this business.
The group’s electrical business generates about three-quarters of revenue, and lighting — which includes Eurolux, Radiant and Cathay Lighting — about a quarter. The group has said previously that its stock position had particularly benefited its lighting division, and the stock had been acquired at favourable exchange rates.
ARB’s shares were 5.77% higher at R5.50 in morning trading on Wednesday, though this is not an unusually large move for the group, valued at R1.29bn on the JSE. The shares have risen by about two-thirds so far in 2021, and have also gained about 9% since the group announced in early July that CEO William Neasham would be stepping down within the next few months.
Neasham will retire after six years at the helm and emigrate, and will be replaced by Blayne Burke, CEO of the group’s ARB Electrical Wholesalers subsidiary.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
ARB Holdings flags profit rise and improved second half
Profit for the year ended June is forecast to jump more than a third from a year earlier after benefiting from a healthy stock position in the first half
Electrical wholesaler and lighting distributor ARB Holdings has flagged a more than one-third rise in profit for its year to end-June, indicating a further improvement in the second half after benefiting from a good stock position in the first six months.
The group, which has a lighting business and also provides electrical cabling and overhead line equipment, expects headline earnings per share (heps) — the primary profit measure in SA that excludes certain one-off items — to rise by 35% to 40% in its year to end-June, implying a profit rise of up to R56m.
This is an improvement from the 25.9% heps growth in the first half, when it said its stock position had proved a significant factor in its success even as the pandemic continued to disrupt local and international supply chains. The group was affected by lockdowns in the first half of 2020, but its forecast of heps of as much as 83.9c is also an improvement on the 58.2c it generated in its 2019 year.
ARB has been hit in recent years by a drop-off in infrastructure spending by Eskom and municipalities, with such projects now a smaller part of this business.
The group’s electrical business generates about three-quarters of revenue, and lighting — which includes Eurolux, Radiant and Cathay Lighting — about a quarter. The group has said previously that its stock position had particularly benefited its lighting division, and the stock had been acquired at favourable exchange rates.
ARB’s shares were 5.77% higher at R5.50 in morning trading on Wednesday, though this is not an unusually large move for the group, valued at R1.29bn on the JSE. The shares have risen by about two-thirds so far in 2021, and have also gained about 9% since the group announced in early July that CEO William Neasham would be stepping down within the next few months.
Neasham will retire after six years at the helm and emigrate, and will be replaced by Blayne Burke, CEO of the group’s ARB Electrical Wholesalers subsidiary.
gernetzkyk@businesslive.co.za
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