New acquisition boosts ARB Holdings
Radiant, which the group bought in January 2019, helped to lift revenue in the lighting division by more than a third
Electrical wholesaler and lighting distributor ARB Holdings said on Thursday that recent acquisitions helped to boost revenue in the half year to end-December, though it continues to feel the pinch from reduced spending by power utility Eskom.
Group revenue increased 4.5% to R1.42bn, with revenue growth of 37.3% in the group’s lighting division, following the acquisition of lighting distributor Radiant in January 2019.
Operating profit rose 16% to R106.3m to end-December, while headline earnings per share (HEPS) rose 40.9% to 32.65c, the group said.
The performance of the company’s lighting division was offset by a volatile exchange rate, as well as a lack of consumer confidence.
Turnover in the group’s electrical division decreased by 4.5% to R1.04bn due to the lack of big infrastructure projects, with Eskom’s spending on electrification remaining “inconsistent”.
Power cable sales continued to decline, with margins also under pressure, the group said. This was directly linked to the lack of infrastructure projects and increased competition.
“Despite the acquisition of GMC in March 2019, overhead line product sales have been disappointing because of the inconsistent spend by Eskom on electrification projects,” said ARB CEO Billy Neasham.
Despite this, the electrical division had reduced operating expenditure, resulting in a 13.5% increase in operating profit, Neasham said.