Security barriers manufacturer Trellidor says it will pay shareholders a dividend for the first time in four years after cutting its debt load and stabilising its balance sheet.
On Thursday, the group, which listed on the JSE a decade ago, declared a final gross dividend of 12c per share for the year to end-June. The last time it paid a dividend was in October 2021, when it declared 11c a share. Payouts were halted after that as high debt levels weighed on the company.
Net debt has since been reduced with the group posting a 38.4% decline to R71.3m for the year under review, saying that the reduction drove a 30.3% fall in finance costs to R9.9m. Cash generated from operations jumped 30.1% to R66.5m boosted by tighter working capital management, it said.
Despite the resumption of dividend payouts, the group’s earnings remain under pressure. Headline earnings per share slipped to 31.5c fro 36.1c, while impairment linked to the disposal of its Taylor and NMC brands pushed the group into a loss of 41.7c per share. The disposal concluded in June, allowed the company to refocus on the core of the brand, it said
“The Taylor and NMC businesses have not delivered to expectations and the return on capital for Taylor and NMC falls below that of Trellidor. The disposal will refocus the group on the Trellidor business, further reduce debt, facilitate reduction in group overhead, enhance return on capital and open other opportunities for capital reallocation, designed to restore shareholder value.”
Revenue from continuing operations for the period declined 8.9% to R367.1m, with SA sales down 7.8% and UK revenue hit by the end of a major one-off project.
Trellidor said the balance sheet reset, debt reduction and return to dividend payouts positioned the company to pursue growth in local, African and UK markets.
“These plans include allocating additional resources targeting the non-residential market and a geographical expansion strategy of the franchise network, which has already been initiated and is showing early signs of promise,” it said.
“This, together with rigorous management of factory efficiencies, costs, margins and strong cash generation, supported reduced corporate costs, debt servicing and finance charges, will further improve returns on capital,” Trellidor said.
Shares in the company rose as much as 4% in the morning trade following the announcement, bringing its market capitalisation to R191.3m.
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