Bell Equipment jumps after flagging profit surge

The shares of industrial transportation group Bell Equipment were on track for their best day in four weeks on Friday after it flagged that its annual earnings would rise by nearly three quarters due to stronger market conditions.

In November the JSE-listed company had previously flagged that it expected to report earnings of 750c for the year, a jump of as much as 277c per share or 59% for the year ending December.

On Friday the listed manufacturer and distributor of heavy industrial equipment advised shareholders that headline earnings per share (HEPS), a widely used profit measure that strips out exceptional items, is expected to rise between 65% and 73% from 473c in the prior comparative year. This puts group earnings at between 780c per share and 820c per share.

“The expected increase in earnings is mainly due to stronger market conditions,” Bell said in a short trading update.

The market welcomed the news as the company’s shares rose as much as 8.53% on Friday morning, before retreating to trade 5.56% higher at R26.98.

The industrial group with operations across the US, Africa, Europe and Australasia has had its local operations hobbled down by load-shedding, the availability of vessel space for finished articulated dump trucks (ADT), and the funding required for the long working capital cycle to import components and material from the northern hemisphere.

Subsequently, in 2023 the Richards Bay-based group announced it was charging ahead with plans to produce more ADTs in its German facility, which is positioned closer to suppliers and larger markets.

Bell’s board has also been completing an evaluation of the benefits of potential changes to the group’s operating structure.

In August Bell and the National Union of Metalworkers of SA (Numsa) inked an agreement to convert 100 contract workers into permanent employees, days after they threatened to strike and shut the group’s Richards Bay plant and its Boksburg head office.

With a market capitalisation of just over R2.4bn on the bourse, Bell employs more than 3,500 people and owns a principal manufacturing plant in Richards Bay that boasts a capacity of 5,000 machines a year and supplies Africa and Asia with trucks, hauliers, loaders, tractors, backhoes and custom-made equipment.

Bell Equipment’s annual results are expected on March 28.

gumedemi@businesslive.co.za