Infrastructure boom lifts Bell

2008-08-12 00:00

The JSE-listed heavy duty equipment and vehicles supplier, Bell Equipment, continued its impressive growth, posting strong results for the six months ending June 30 — the best half-year results in its history.

The KZN-based group said sales revenue was up by 35% to R2,78 billion, while gross profit grew by 57% to R712,5 million.

Group CE Gary Bell told The Witness yesterday that the group continues to benefit from South Africa’s massive infrastructure rollout, particularly in relation to mega projects such as the new airport at La Mercy.

Headline earnings were 44% higher at 276 cents.

Bell added that the company has opened an office in Bahrain owing to demand in the Middle East.

Mining and infrastructure projects in the Democratic Republic of Congo, Zambia and Zimbabwe have also proved valuable.

“The European market has done well, driven mainly by construction. Business is up more than 30% there, but we expect this to slow going forward.

“We have very little exposure to the U.S. … which is in a very bad shape at present.”

Bell said the increase in gross profit was largely due to the favourable rand.

He prefers a rate of R7,70 to the dollar going forward, although he added that a very weak currency would not be good for the South African economy.

“There are still opportunities to get a bigger slice of the market share,” he said.

He noted, however, that there are 25 to 30 “imported competitors” in the local market now.

Bell said KZN business experienced strong activity due to the new airport, a resurgence in coal mining and established sugar and forestry plantations.

“Other income” grew by 19% to R39,6 million, due to an increased profit share on the WesBank financing joint venture, while parts and service sales increased by 23,5%.

Bell added, “Our staff complement has grown to 3 245 people from 2 655 in June 2007. As a result, our salary and wage costs have increased by R111,9 million.”

No dividend has been proposed for the interim period.

kavith@witness.co.za

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