Putco drives plan to develop its property interest
Putco drives plan to develop its property interests
September 30, 2003
By Roy Cokayne
Pretoria - Putco, the listed bus transport operator, has developed a plan to grow Putco Properties, its fully fledged property investment company.
The company is also looking at diversifying some of its operations to include the non-subsidised bus sector within and outside South Africa.
Albino Carleo, Putco's chairman, said this could include long-distance coach and tourist business and contract-type bus services.
"In addition, we are exploring a number of opportunities in the bus commuter market in other parts of Africa."
Michael Oldham, Putco's chief executive, said the plan developed for Putco Properties involved acquiring quality, income-producing retail and office parks throughout South Africa and at the same time disposing of properties that did not fall into Putco's long-term plans.
These comments came after Putco yesterday reported that it had more than doubled its headline earnings a share to R1.59 in the year to June.
Attributable income improved by 115 percent to R41.9 million as the company's tax rate declined to 32 percent from 35 percent. Revenue grew 8.5 percent to R899.1 million and an unchanged dividend of 50c was declared.
However, Oldham cautioned against comparing current headline earnings with the previous year.
Oldham said the company had to provide R23.5 million in respect of onerous contracts in 2002, because of a new accounting statement and most of these provisions were reversed out in the most recent financial period.
"Our earnings doubled, largely for technical accounting reasons. The fairest way to look at our financial performance is the stable operating profit of R66.3 million, though I have to state that was after R6 million in abnormal consulting and litigation costs.
"Without those costs, we would have shown growth of about 10 percent."
Putco has been negotiating with a prospective empowerment partner for more than a year but has not yet clinched a deal.
Oldham attributed the "abnormally long time" taken in attempting to negotiate the empowerment deal to initial "financial issues", which had been ironed out, and some other issues that had surfaced at different times, most recently related to uncertainty surrounding the direction of government policy on negotiated and tendered contracts.
Putco closed unchanged at R5.
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