Invicta Holdings achieved its long-stated goal of generating approximately 50% of income from operations outside South Africa in the year to end March 2026, ahead of schedule, which reduces the group's dependence on any single market and positions the group for the next phase of growt. says it will continue to be on debt reduction.
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Invicta Holdings (Invicta) increased its dividend 9% to 125 cents per share as a result of a robust financial performance for the year ending March 31 and in spite of the continuing de0industrialisation of South Africa.
“The financial year was defined by external pressure and internal resolve. Sustained rand strength affected the translation of our foreign operations, while US trade tariffs and the supply chain disruption triggered by the Middle East conflict created headwinds across nearly every market in which we operate,” said CEO Steven Joffe on Monday.
“As a result of continuous action by management, we were successful in maintaining our margins across the businesses. We also tightened working capital management to improve liquidity, with targeted measures such as more disciplined purchasing of inventory to ensure foreign exchange risk was also well managed. These initiatives, with prudent capital expenditure, enabled us to preserve cash,” he said.
In the prior year, Invicta disposed of the primary distribution warehouse within Kian Ann’s Singapore operations, using part of the proceeds to redeem all outstanding preference shares. These actions contributed positively to this year’s performance.
On a positive note, Joffe highlighted that certain sectors, such as agriculture and mining, have shown increased activity that has remained sustained at elevated levels.
However, he cautioned that South Africa's industrial sector remains a challenging environment in which to operate, with a regulatory framework that does little to stimulate growth.
Following recent engagements with investors, Invicta simplified its operational structure. Previously presented across five segments, the group’s operations are now presented in two segments.
The Industrial Solutions and Parts segment incorporates Replacement Parts Industrial (RPI) and Replacement Parts Auto-Agri (RPA).
The Capital Equipment and Parts segment includes Capital Equipment (CE), Replacement Parts Earthmoving (RPE), and the Kian Ann Group in Singapore. It also includes the newly acquired Spaldings business in the UK.
In the Industrial Solutions and Parts segment, revenue decreased by 2% to R5,7 billion due to tough market conditions, particularly in the local market, with sustainable operating profit decreasing by 10% to R418 million.
“Mining, retail, and automotive remain the top sectors across our industrial businesses, with the teams having worked relentlessly to maintain sales amidst the ongoing de-industrialisation in South Africa,” said Joffe
He said roughly two-thirds of sales come from consumable parts, with the industrial business primarily operating in South Africa.
“Offshore markets will become more important over time as the group focuses on the internationalisation of these operations,” he said.
“We have seen positive movements in the automotive business in South Africa and are optimistic about the growth in our agricultural house brands locally. Given the sustained tensions in Eastern Europe, though, we are seeking to expand our auto-agri business westward into other geographies on the continent,” he said.
In the Capital Equipment and Parts segment revenue is 19% higher than the prior year at R2,3bn, attributable both to the inclusion of Spaldings for the first time and improved performance across the Capital Equipment businesses, due to increased volumes in the construction and mining sectors.
Sustainable operating profit decreased slightly by 3% to R398m, largely driven by the seasonal trend in the profitability of the Spaldings operations, which will peak in the UK summer season from July to September.
“Construction, mining, and earthmoving are the largest industries we service in this segment. In South Africa, we are starting to see growth in the construction and mining sectors, with volumes beginning to increase."
He said that while the improvement in the mining sector is positive, the recovery is limited largely to hard rock resources such as copper, gold, and platinum. Fuel prices will continue to influence customer habits going forward, he said.
Joffe said that with a relatively debt-free balance sheet, Invicta maintains the freedom to scale its platform and add meaningful acquisitions.
“Our team continues to manage our business well to ensure it achieves the desired returns, with our objectives for the coming year being to manage working capital and optimise operations, including the evaluation and implementation of AI-managed processes; generate cash; manage the supply chain and logistical challenges; and look for appropriate, sizeable acquisitions and new product lines for our existing businesses.”
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