Durban - Bearing Man, the distributor of industrial bearings, power transmission products, seals and specialised conveyor belts, beat tough trading conditions to record a 21 percent increase in headline earnings to 28,5c a share for the year to June 30, Greg Till, the managing director, said yesterday.
"The increase in headline earnings to R30 million from R24,7 million was achieved despite R7,5 million abnormal costs relating to the rationalisation of Fenner Power Transmissions," Till said.
Despite a drop in sales volume as a result of the continuing flat market, turnover increased by 13 percent to R560,4 million.
Till attributed the growth in earnings and turnover to the company's dollar-based business.
"Everything we sell is imported, positioning us to benefit from different pricing disciplines."
He described the 1 percent annual increase in operating profit to R54,1 million as satisfactory, because it was achieved after improved results in the second half following a 14 percent reduction at half-year.
The company's interest-bearing debt was reduced by a significant R59,4 million and interest paid by 45 percent. The debt-equity ratio improved to 37 percent from 85 percent.
The company is still operating under a cautionary notice, as Competition Commission approval for Aveng's sale of its Bearing Man stake to Invicta Holdings has been delayed.
"Approval for the acquisition of Invicta Bearings from Invicta Holdings is expected at around the same time," Till said. "The business will run as a separate entity.
"We are very excited about its prospects, as the experience we have gained from the acquisition of Fenner Power Transmissions has put us in a strong position to enhance earnings (by introducing) its different products."
With the completed rationalisation of Fenner Power Transmission's 20 branches into Bearing Man, he said, the outlook for the current financial year looked promising.
"Costs such as retrenchment packages and rent on outstanding leases have been accounted for as abnormal items and the company's single sales channel is now well placed to take advantage of market opportunities to improve its profit."
The company increased its dividend by 1c to 10c a share.
Bearing Man closed unchanged at R1,65 yesterday.