Automotive components supplier Metair Investments returned to the black at the halfway stage of the financial year, but strong revenue growth and a rebound in headline earnings were offset by rising capital charges, weaker cash generation and a fall in asset values.
The company’s revenue rose 53% in the six months ended June to R8.66bn, supported by stable volumes from original equipment manufacturer (OEM) customers and the consolidation of acquisitions, including three months of Hesto and six months of AutoZone.
The Hesto consolidation simplified reporting and improved transparency, while AutoZone is being integrated into operations, the company said in a statement on Wednesday. The company also secured a new debt package to reinforce its capital structure.
Operating profit before capital items increased 27% to R450m, while earnings before interest, tax, depreciation and amortisation (ebitda) rose 40% to R715.6m.
Headline earnings per share (HEPS) recovered to 65c from a 3c loss a year ago.
Cash flow performance was under pressure, with the company reporting a negative operating cash flow of R122m, reversing an inflow of R161m a year earlier. The company’s net asset value per share fell 55% to 1,301c.
Management pointed to “improved operating performance across most subsidiaries,” with the Hesto consolidation helping to streamline reporting and the AutoZone integration still in progress.
Metair did not declare a dividend, as was the case last year.
The company is to relocate its head office to Denver, Johannesburg, it said.
By market close Metair’s share price had fallen the most in nearly six months, down 9.47% to R6.98.
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