Argent Industrial’s share price ratcheted up 6.1 percent to R14.70 yesterday after it said profit increased 45 percent to R192.08 million in the year to March 31 after it expanded significantly offshore.
Argent Industrial is a holding company that derives its income from manufacturing and trading of steel and steel-related products, automotive and properties. The company is organized into three operating divisions, namely manufacturing, steel trading.
The group also declared a 42 cents dividend - the last dividend, 10 cents, was in 2019.
“The group exceeded its objectives for the 2022 financial year by investing in stable, developed international markets by further growing export markets, through efficiently sourcing commodities globally, rewarding entrepreneurial management and through the repurchase of its own share,” Argent’s management said yesterday.
@smalltalkdaily analyst Anthony Clark said on Twitter “for some time I have commented I am anticipating and forecasting excellent results from Argent Industrial not just for FY22 but also FY23…Overlooked gem despite being up 300 percent since I snagged it in March 2019.”
Headline earnings a share increased 59.2 percent to 339.2 cents. Gearing was low at 14.4 percent. Net asset value a share increased to 2 238.3 cents from 1 910.2 1 cents.
The group increased turnover from the overseas operations to R603m and export revenue to R277m during the year, and the strategy was to increase overseas exposure in the coming years, management said.
Fluid Transfer would be readied for the increased activity and refuelling requirements with the return to capacity of the aviation industry, while an Xpanda Security operation would be established in the UK, which was currently serviced through exports from SA.
Partington Engineering’s manufacturing capabilities would be expanded in the UK, the Castor and Ladder and Toolroom amalgamation would be bedded down, and American Shutters operations would be expanded into KwaZulu-Natal. Additional businesses to acquire that suit the group in the UK and US would also be sought, Argent’s management said.
The group acquired Cape Town-based American Shutters last September for R57.4m cash. American Shutters is a major supplier of stylish door and window shutter systems that provides privacy, light control and security.
The group also acquired Fluid Transfer Group in October. Fluid Transfer is a UK manufacturer of aviation refuelling dispensers and refuellers and is a supplier of marine refuelling systems and standard fuel tankers. The company has a global customer base and has been trading since 1967.
Argent’s management said they acquired the company to complement the product range offered by Fuel Proof, who were leaders in the field of fuel storage and supply systems, which would reduce their cost basis through shared resources.
Group consolidated earnings after taxation attributable to owners increased to R190.2m, up significantly from R130.3m in 2021. This was after accounting for a R0.97m IFRS 16 expense and allowing for the amalgamation of Toolroom Services and Castor and Ladder, which resulted in a cost of R4.3m in asset disposals, write-downs and retrenchments.
The targeted order book for Fluid Transfer to build 42 refuelling trucks for this year had already been achieved.
Xpanda Security had received the first of several orders from a major UK Retail Chain.
The relocation of Castor and Ladder to its new location is complete, and the operation was back to full production.
The new American Shutters showroom in uMhlanga Rocks in KwaZulu-Natal had been completed, and a poorly located showroom and operation in Johannesburg had been relocated to a busy centre in Fourways.
American Shutters also has an existing export market in the UK, which would be expanded via their aluminium security shutters.
BUSINESS REPORT