GNDE - Grindrod to double in size, list on LSE

25/02/2005 11:17:19

Grindrod to double in size, list on LSE
Nicola Jenvey

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KwaZulu-Natal Correspondent

DURBAN - Shipping and logistics group Grindrod will double in size to R6bn in three years and seek a London Stock Exchange listing in the medium term, says MD Ivan Clark.

The announcement yesterday came as the group beat its own expectations to post a 146% hike in headline earnings a share to 588,4c in the year to December.

Management had regularly updated shareholders that the financial year was a bumper one. The latest notification several weeks ago signalled that Grindrod expected a 130%-140% increase in headline earnings.

Since 1999 it has expanded land-based operations to counter the cyclical shipping market, but also grabbed opportunities in the international shipping market.

Clark recently announced a R3bn expansion that would see Grindrod acquiring new ships over the next few years while entrenching land-based operations.

The R1bn earmarked for logistics expenditure has translated into acquiring a 50% stake in furniture transporter Boltt Removals and a 76% stake in Namibia-listed African Portland Industrial Holdings - with terminal facilities in Walvis Bay and Maputo - and a bulk logistics operation with facilities in Johannesburg, Cape Town and Durban.

In preparing for a London listing, Clark said management had restructured international operations into a single foreign holding company and begun the process of empowerment within its southern African operations.

“Moving forward, it's essential for management to create sustainability in growth and earnings,” Clark said.

In the year under review, Grindrod bolstered revenue 52% to R3bn despite the rand strengthening against the dollar. This translated into attributable profit rising to R549,9m (2003: R239,9m), with the stronger rand shaving off R200m on translation.

Management declared a 125c (42c) final dividend, bringing the total to 175c (60c) on a reduced dividend cover. Clark said the group benefited from “an outstanding performance” by its shipping services division.

This was due mainly to a much larger fleet, a low fixed fleet cost and strong world shipping markets that maintained high levels throughout the year.

The freight and financial services division produced “pleasing results” despite the negative effect of the strong rand on some of the operations.

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