Labat’s HEPS decline nearly 45% as net asset value almost doubles
Acquisitive black-economic empowerment (BEE) transport and logistics group Labat said on Tuesday that headline earnings per share (HEPS) declined 44.8% to 1.81c in the year to end-August, while net asset value almost doubled, due to the start of its logistics business.
Labat, which struggled to pursue acquisitions in the logistics sector in 2016, said in a statement after markets closed on Tuesday that revenue increased to R52m from R14.3m, primarily because of the commencement of transport contracts during the period.
The group, which owns silicon-chip manufacturer Sames, was one of the first listed BEE companies. It was founded by former South African Rugby Union boss Brian van Rooyen and Victor Labat.
A R7.9m deferred tax credit received in 2016 had lowered HEPS, while gross profit increased to R11.4m from R7.5m.
While the gross margin percentage from the logistics segment was lower than that of the electronic chip business, the growth in the logistics business has been exponential, the statement read.
Gross profit from its technology business was R9m compared with the prior year’s R14.9m. Profit in the bulk logistics sector was R4.6m.
The company had a tough year in 2016 as it sought to enter the transport sector, with its share price plunging 81.33% following a series of failed takeovers.
This included the termination of talks for a R560m takeover of Reinhardt Transport Group. The company subsequently announced it would continue with its strategy, but through joint contracts and agreements. It secured its first logistics work and deployed its first vehicles in August 2016, for a large mining company.
The company said it continued to look to expand the logistics business, recently agreeing to a R40m factoring facility with Transaction Capital.
During the period under review, Labat acquired a 55% stake in privately owned Kufika Transport, for an undisclosed amount. However, a deal to acquire a 51% stake in Ormin Coal for R16m fell through in January.
At 10am, Labat’s share price was unchanged at 38c, having gained 35.71% so far this year.