Barloworld bolstered by ‘better trading activity’

JSE-listed industrials firm Barloworld has posted a 14.3% increase in full-year revenue for the period ended 30 September 2023, despite SA’s poor macroeconomic conditions and geopolitical tensions globally.

The group said in its results media statement on Monday that the strong performance was “underpinned by strategy execution and better-than-expected trading activity”.

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Barloworld’s double-digit increase in revenue saw headline earnings per share from continuing operations growing 5.5% to 1 156.3 cents. Revenue from continuing operations hit R45 billion, while the group’s operating profit from core trading activities surged 18.6% to R4.3 billion.

The group declared a final ordinary dividend of 300 cents per share (cps), taking the total dividend for the year to 500cps. This was 40cps higher than that reported in the prior financial year (FY2024).

“Barloworld has again delivered a pleasing set of results. Our geographic focus on the emerging markets has enabled us to weather the tough macroeconomic backdrop characterised by geopolitical tensions and unstable commodity prices,” group CEO Dominic Sewela said on Monday.

“Overall, we have seen strong trading across our operations as the businesses remained agile to external risks,” added Sewela.

“The performance is supported by our efforts to optimise the balance sheet to ensure continuous value creation for our stakeholders. We have reduced our net debt to R668 million from previous levels of R4.6 billion due to R2.7 billion free cash inflow and the unbundling of the Avis Car Rental and leasing business,” he said.

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“I am confident in our liquidity position and positive that the consistent execution on our strategy will ensure sustainability going forward,” he added.

Outlook

On its outlook for FY2024, Barloworld said that it wants to continue delivering on its strategy and solidifying core asset-light and cash-generative businesses in the key industrial equipment and services and consumer industries.

“Looking ahead, we anticipate that external factors impacting the industry will linger for the foreseeable future and we have proved the agility of our business to navigate these risks,” Sewela said.

“On the back of softening commodity prices and slowdown in machine sales, Equipment Southern Africa will be well positioned through increased aftermarket opportunities in line with the increased installed population.”

“Equipment Eurasia will continue to benefit from increased activity in the region while we continue to service our clients on the ground in our VT business. Ingrain will benefit from our ongoing investment in preventative maintenance to support production; and opportunities to grow volumes in the domestic market from imported product,” he noted.

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