Industrial Reporter
ENGINEERING company IST is still on the acquisition trail although the introduction of new products and better market penetration is touted as key to its earnings growth.
IST CE Harry Coetzee said his group was looking at several "interesting opportunities" but was still a long way from deciding what it wanted to acquire.
However, he said there would be more clarity on what it wanted to buy in the second half of the year.
Coetzee said all seven the of the group's divisions had presented acquisition proposals, which were being examined by management. The companies IST was looking at varied in size from small groups to fairly large ones.
IST had several funding approaches at its disposal.
For some of the smaller companies it was considering, it would acquire the whole company, while for others it would take a majority holding and have the option of taking a full control. IST made one acquisition in the past year and was looking to make another two or three.
Coetzee said management had a clear strategy for the further development of the group. In its results for the year to February, IST increased its cash reserves to R79,7m from R53,9m.
Net cash flow from operating activities grew from R36m to R42m and the tangible net asset value per consolidated share rose from 84,8c to 101,5c.
While IST was committed to growing through making acquisitions, it had set internal goals to drive organic growth.
Coetzee said its local sales growth target was set at 20% for this year and was also seeking to increase export sales.
He said each division was expected to generate at least one new product or significant product enhancement during this period, and to penetrate at least one new market sector. IST was also involved in SA's pebble-bed modular nuclear reactor programme, which was being touted by some as a cheaper and safer way to produce nuclear energy.
While the SA government was yet to give the final go-ahead, Coetzee said the research and development phase of the project was close to completion and the pilot phase was about to begin.
The programme was set to get a boost with the US congress close to approving a 200m package to build a test reactor in Idaho. IST gained 3,85% to close at 108c in 146100 deals yesterday.
May 20 2003 06:59:14:000AM Larry Claasen Business Day 1st Edition
Tuesday
20 May 2003
Profile Group (Pty) Ltd. has taken care in preparing all information on this website, but does not accept any liability for errors or out-of-date information.
