Trellidor Holdings faced two major challenges during the six months to December 31: falling revenue in its domestic market, South Africa and higher levels of debt at high interest rates.
Revenue increased by 6.9% to R292.2 million. Headline earnings per share fell by 16.1% to 21.4 cents, from 25.5c in the prior corresponding period. The dividend was passed, and would only resume once borrowings and gearing normalised, the directors said.
Revenue from international markets increased to R82.4m, driven by a strong performance by the Trellidor UK division, representing 28.2% of the group’s revenue.
Net debt was reduced 16.8% to R116.8m from R140.3m, driven by improvements in the investment in working capital. Cash generated from operations of R39.5m (R7m) was a feature of the period. This substantially strengthened the balance sheet.
Group strategies were focused on improving shareholder value over time. These include restructuring and optimally reducing debt, further improving working capital management, and rigorous cost management.
In addition, directors said they would continues to focus on optimising revenue generation domestically, while leveraging off opportunities abroad.
Operating profit increased by 0.5%. However, higher borrowing costs led to profit after tax reducing to R20.4m from R24.3m.
In the Trellidor business unit, revenue for the period increased by 14.6% to R204m, driven by a strong performance by the UK division, which offset the weak demand in South Africa.
Its operating profit only increased 3.3% to R28.7m., primarily due to lower volumes through the factory in South Africa.
Demand for Taylor’s decorative products was muted. Its revenue decreased 11.5% to R73.8m. Operating profit fell to R4.8m from R7.2m.
Similarly, NMC’s revenue decreased by 14.9% to R15.2m and operating profit decreased to R1m from R3.2m.
The share price was trading marginally higher at 120c on the JSE yesterday afternoon, a price well down on the R2.90 that it was trading at a year previously.
BUSINESS REPORT