| Wed 21 Apr 2004, 13:17 | | ustains Earnings Growth In Tough Year |
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Ist Sustains Earnings Growth In Tough Year, Expects Benefits From New
Release Date: 21/04/2004 12:16:00 Code(s): IST
IST Sustains Earnings Growth In Tough Year, Expects Benefits From New
Investments
Press Release
IST Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1998/011521/06)
JSE Share code: IST
ISIN: ZAE000015798
IST SUSTAINS EARNINGS GROWTH IN TOUGH YEAR, EXPECTS BENEFITS FROM NEW
INVESTMENTS
Pretoria, 21 April 2004 - Technology group IST overcame difficult trading
conditions and delays in some major contracts to post another earnings increase
for the year to February 2004. Reporting its results today, the group also said
the benefits of the substantial strategic investments it made last year were
expected to start flowing through soon.
Earnings for the year were up 17.2% at R26.1 million on the back of a 7.7%
increase in revenue to R323.5 million. With shares in issue rising as the
result of options exercised by Coronation FRM, diluted headline earnings per
consolidated share increased by 9.3% to 16.4 cents. A dividend of 8 cents per
share (2003: 7.5 cents) was proposed.
Chief executive Harry Coetzee said the most notable feature of the past year had
been the investment of R62 million, funded from the group"s own resources, in
synergistic acquisitions and the development of major new products.
"We spent R31 million on the acquisition of Delkor Technik, which specialises in
the supply of mineral processing and liquid/solid separation equipment, and a
further R3 million on Sherlyn, which distributes the GE Multilin range of
protection products. Delkor Technik has been merged with IST Industrial, which
now has two business units: IST Delkor and IST Technik. Sherlyn has been
integrated into IST Energy, extending that division"s already strong presence in
the electrical utilities market into the industrial and mining sectors in South
Africa and some neighbouring countries, while at the same time increasing its
portfolio of best-of-breed products. It has also strengthened IST Energy"s
relationship with GE, its major principal," Coetzee said.
"Significant as these strategic acquisitions are, they have not diminished our
strong commitment to organic growth. In line with this, we invested some R28
million, with active customer participation, in the development and extension of
our existing product offerings in IST Dynamics, IST Data and IST Energy.
Dynamics" two major new projects are both progressing well, and highly
successful product trials have recently been concluded, with first order for the
new products expected as early as the latter half of 2004."
Reviewing the past year"s operational performance, today"s announcement noted
the following:
Electronics Group:
* IST Energy had an excellent year, taking in orders to the value of some R73
million. These included the first order from Eskom for GE remote terminal
units assembled locally in terms of IST Energy"s partnership agreement with
GE Power Systems. The division"s partnership with GE was strengthened and
its market presence extended through the acquisition of Sherlyn and the GE
Multilin range of protection products.
* The positioning of IST Otokon as an energy service company (ESCO) in terms
of Eskom"s Demand Side Management initiative (DSM) continued to bear fruit
with two more major DSM appointments, and the division has had the best
year in its history.
* IST Data continued to do very well on the back of good products and its
substantial footprint in the market. It is making rapid progress with the
development of middleware products on the GE Smallworld platform and is
also negotiating significant new GE Smallworld licences.
* IST Telecom produced a creditable performance in circumstances which
continued to be difficult. It is awaiting adjudication of the Telkom IMAX
tender and meanwhile is working with its principal supplier to push the
ADSL rollout programme.
Mechanical Group:
* IST Industrial also had a very good run, successfully completing the very
substantial Hillside Aluminium projects. It is currently progressing a
number of smaller assignments and actively pursuing new prospects,
including those opened up through our recent acquisition of Delkor Technik,
with which it has been merged.
* The focus at IST Dynamics this year has been on major new product
developments and, as expected, the division"s revenues were consequently
reduced. It nevertheless secured a R37 million order for the upgrade of
the SA National Defence Force"s Olifant tank.
* IST Nuclear was awarded a R260 million contract - the single largest in the
group"s history - for the detailed design of three key systems for the
Pebble Bed Modular Reactor"s proposed demonstration plant at Koeberg.
Continued funding delays at the PBMR Company have, however, considerably
constricted the anticipated revenue stream from this source.
Coetzee said in the current year there would be a strong emphasis on exploiting
the past year"s investment in growth by bedding down the acquisitions,
harvesting the opportunities they brought with them, and extracting full value
from the new products.
"All our divisions are budgeting for further growth and, barring a major setback
in our operating environment, IST should again deliver shareholder value in the
year to February 2005," he said.
For further information, please contact:
Harry Coetzee Etienne Toerien
Chief Executive Financial Director
012-426-7300 012-426-7400
or 082-881-9255 or 083-305-5737
Issued by du Plessis Associates on behalf of IST Group.
dPA contact:
Kathy du Plessis
tel: 011-728-4701,
fax: 011-728 2547,
mobile: 083 266 5847
or e-mail: ist@dpapr.com
The full results are available on the company"s web site at www.istltd.co.za
