Printing and publishing group Caxton expects its headline earnings to rise about one third, as it cashed in supply-chain problems by holding some of its stock to meet customer demand.
“In addition, the group’s packaging operations experienced good demand and gains in market share,” the company, valued at R3.32bn on the JSE, said in a trading statement.
Caxton sees its headline earnings per share (HEPS), the main profit measure in SA that excludes certain items, increasing 32.3%-39.8% to 88c-93c in its half-year results to end-December.
Price increases to help recover price hikes in raw materials it had to deal with propped up revenue more than one quarter to R3.82bn.
Higher inflation was evident in the reporting period, but the group said it managed this well, along with the higher cost base because of more power outages.
“This situation towards the end of the reporting period started to ease, which creates the opportunity to look at reducing stockholding that will release cash,” Caxton said.
The group has been restructuring in the face of falling newspaper and magazine sales while seeing an increase in demand for packaging, resulting in it gaining market share, amid demand in SA’s quick-service restaurant industry, where home delivery options have proven successful.
Its packaging units grew overall in its 2022 financial year, with the alcohol and quick-service restaurant being one of the major contributors, beating pre-pandemic levels as consumers often used home delivery options to get hot meals during load-shedding.
The group will publish its interim results on March 20.
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