|
|
|
|
|
|
| ||||
GFSA, Gencor in R17bn gold merge... Nu-World keeps filling up the pot for in... Altron back on the growth trail after se... Flora Clinic a healthy move for Afro... Teljoy rings up its share pric... Triton aiming to clean up in S... Internet upstarts take on the giants of... M&R spots light at the end of... Prima ready to toy with the marke... Hyundai plant revving up to make new in... |
Nu-World keeps filling up the pot for investors
The appliance manufacturer has achieved growth for the seventh year in a row,
writes MARCIA KLEIN
The results were achieved on turnover of R343.9-million, a year-on-year increase of almost R100-million. "This achievement is worthy of comment because it was just three years ago that the group broke through the R100-million turnover mark for the first time," MD Michael Goldberg says. When Nu-World listed in 1987, turnover to August that year was just R12.1-million. "The increase in turnover to the level of R340-million equates to an average annual compound growth in sales of 40% over the last 10 years," Goldberg says. Net operating income was 60% higher, and while selling prices remained under pressure, the gross margin improvement reflected improved productivity. While the interest bill was 41.5% higher at R5.9-million, interest cover improved to 4.1 times and the company was now ungeared (gearing was 11.5% at August 1996). The higher interest bill related to seasonal timing and increased stockholding. Pre-tax income was 68% higher at R18.3-million, but a higher tax charge, reflecting an unusually low charge in the previous year, saw attributable income rise 46% to R13.6-million. This year's results represent the seventh consecutive year of growth for the company. Goldberg says when it listed a decade ago the company was operating only in wiring accessories and the small electrical appliance market in SA. Growth since has largely been driven "by diversifying into a broad-based branded consumer durables supplier". It now has five integrated divisions - manufacture and import of domestic appliances, manufacture of electrical wiring accessories, export of manufactured domestic appliances, JVC consumer electronics and white goods.
Commenting on the group's performance for the year, Goldberg says that after reviewing the manufacturing operations, it was decided to consolidate the range of products produced in-house and to focus on using a broader range of technologies in-house. These steps would ensure Nu-World competed effectively against China and other low-cost producing countries for export sales. Nu-World exports to more than 30 countries.
Goldberg says the consumer electronics market in SA is estimated at more than R3-billion, and there is enormous scope for growth.
Last year Nu-World formed an alliance with Toshiba of Japan and White Westinghouse of the US; deals aimed at establishing a presence in the R1.5billion white goods market. "We have yet to scratch the surface of this market with our competitive ranges of laundry, refrigeration and cooking products," Goldberg says.
Through technological progress, Nu-World continued to improve productivity, facilitate more flexibility on the factory floor and increase capacity. Directors were confident they could maintain the current, high growth rate "for the foreseeable future". Nu-World has provided investors with an average compounded rate of return of 120% over the past five years. Since June its share price has made further strides, rising to R29 from R21.
|