Diversified industrial group Barloworld on Tuesday said it expects to report a rise in headline earnings per share (HEPS) for its year to end-September, showing resilience despite exiting its logistics business and the unbundling of Zeda.
Basic HEPS for continuing operations are expected to rise by as much as 6.2% to 1,163.8c when Barloworld reports on its full-year results on Monday, it said in a trading update.
“The trading results of the car rental and leasing business, Zeda, and the logistics business were disclosed under profit from discontinued operations,” Barloworld said. “Zeda was successfully unbundled and separately listed on the JSE on December 13, while the logistics business was successfully disposed of effective March 31.”
Barloworld’s share price rose the most in two weeks, up 2.39% to R77.10.
In 2022, the board of the R14.6bn JSE-listed industrial group decided to simplify its portfolio by exiting noncore businesses. This leaves the company, which is the official dealer of Caterpillar equipment and has operations in 16 countries, with the capacity to focus its energies on the industrial equipment and consumer industries sectors.
Since then, CEO Dominic Sewela has been upbeat about prospects at its Southern Africa equipment division. The company has at the same time increased investment in working capital in its local equipment division amid rising demand for machinery from a buoyant mining sector.
Barloworld reported double-digit operating profit growth in the 11 months to the end of August after an improved trading performance across all its businesses and a better-than-expected result in Russia, despite suffering from the effects of the war.
Its Russian equipment division reported reduced product lines and a constrained supply chain. However, it remains optimistic that the business will continue to be self-sufficient in its funding requirements.
Net debt for the group fell to R6.3bn from R7.5bn in the previous period.
Barloworld was founded in 1902 as a trader in woollen blankets and coats, and was listed on the JSE in 1941. The group expects to release its annual results on November 20.
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