Argent shielded by offshore businesses

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Argent shielded by offshore businesses

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Published Date: 2020-11-09 | Source: Stephen Gunnion | Author: Stephen Gunnion

Argent shielded by offshore businesses

The steel manufacturer and trader is not paying an interim dividend as it continues to buy back its own shares.

Argent Industrial has reported a strong first half after its overseas operations managed to collectively circumvent most of the negative impacts of the Covid-19 pandemic. And it says the offshore businesses will be a major contributor to the group once the universe normalises.

Releasing interim results for the six months to end-September, the steel manufacturer and trader said recently acquired Partington Engineering in the UK was already performing beyond exception, with a four-month order book which would see the business end strongly for the full year. It bought Partington, a major supplier of bespoke trolleys to the traditional and e-commerce retail sectors, for up to £3.1 million (R64 million) in order to diversify its portfolio of companies and continue its expansion into the UK.

Back home, it said local companies had recovered some of the turnover lost during lockdown and, other than Toolroom Services, would turn profitable by the end of the month. Its local operations incurred R5.1 million in retrenchment costs and there was a further R5.6 million in stock impairments at Toolroom Services.

For the six months, revenue rose 0.3% to R874 million and operating profit improved by 5.9% to R63.3 million. Net profit came in 11% higher at R44.7 million. A 19% decline in the number of shares in issue contributed to a 47% increase in headline earnings per share to 73.7c. It hasn't declared an interim dividend, saying excess funds will be used to continuing repurchasing shares.

Argent's shares closed unchanged at R5.75 on Friday. They rose 9.1% on Thursday after it released a trading statement.





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