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The group’s revenue is up by 11% to R65.1 billion and it announced a total dividend increase of 27%. Their results have been supported by the recently acquired Bucyrus business which preformed ahead of expectations. Investors will be pleased with these results as the industry has had to contend with a difficult economic climate as well as global mining houses reduced capital expenditure. Barloworld was also helped by good trading conditions in the automotive and logistics division. The group has well established brands under their banner including Audi, Avis, Budget, BMW, Caterpillar, Chrysler, Ford, General Motors, Massey, Mercedes, Toyota and Volkswagen to name a view.
The equipment division which contributes around 50% of revenue has successfully integrated Bucyrus Southern Africa and its Russian distribution businesses into their stable which have performed well over the last year. Revenue for the year was up 17% (from a 7% increase in 2012) to R19.1 billion. Within this number, Bucyrus distribution generated revenue of R2.7 billion. Consistent with global trends, mining demand for Caterpillar machinery was significantly down on last year with a 38% drop in large mining units delivered. Revenues in Equipment Russia were up 5% on the prior year in US dollar terms, largely driven by mining demand in Russian far east projects.
Automotive and logistic businesses that contribute around 50% of the revenue saw a 17% increase in revenue (up from a 15% rise in 2012) to R34.4 billion. There was growth within the Avis Fleet services division into Ghana and Lesotho while the group disposed of assets in Australia. Avis Rent a Car increased revenue by 16% driven by a 6% increase in rental days, a 2,4% increase in the rate per day as well as a higher profit margin. Operating profit of R317 million was 26% ahead of the prior year. Management expects the rental business to show further growth despite the competitive pricing environment.
Management at Barloworld also noted renewed optimism for growth in Southern Africa which is being driven by proposed projects in transportation infrastructure, power and mining within South Africa, Angola, Zambia and Mozambique; with the latter three expected to become stronger contributors to revenue going forward.
Source: JSE SENS