KAP Industrials reports 7% increase in full-year revenue

KAP Industrials, a diversified industrial company, has defied the odds and reported a 7% increase in full-year revenue despite facing various challenges. The company declared a bumper annual dividend, up 93%, after showcasing strong top-line and bottom-line growth. Revenue from continuing operations soared 16% to R27.9 billion, with headline earnings per share from continued and discontinued operations at 75.1c, 73% higher than the previous year. In a recent interview on CNBC Africa, Gary Chaplin, the Chief Executive Officer and Executive Director of KAP Industrials, shared insights on the company's performance and future outlook. Chaplin highlighted the diversity of KAP Industrials as a key factor contributing to its success. He noted that while some of the company's businesses faced challenges, others performed exceptionally well, reflecting the strength in their diversified portfolio. Chaplin expressed optimism about the potential growth in businesses that struggled during the year, foreseeing a return to normal levels of profitability. He emphasized the importance of the company's business model, which spans various industry sectors and allows them to weather external challenges effectively. One of the standout performers for KAP Industrials was the chemicals and timber business, which saw significant success. However, there were areas of softness in businesses like the auto and furniture sectors. Chaplin addressed the impact of inflation on the company, acknowledging the challenges of passing on cost increases in certain domestic businesses. Looking ahead, Chaplin acknowledged that 2023 is expected to be a challenging year due to higher inflation and interest rates, as well as potential impacts on consumer spending. Despite these challenges, KAP Industrials remains focused on efficiency improvements, technology investments, market share growth, and export opportunities as key drivers of growth. The company's operations in regions outside of South Africa have also encountered difficulties, particularly in Botswana where the economy has been slower to recover post-COVID. The logistics business in these regions experienced softness, partly due to weather-related challenges affecting agricultural activities. Furthermore, Chaplin highlighted the issue of load shedding as a significant concern impacting the economy. KAP Industrials is actively investing in self-generation projects to mitigate the effects of power outages and protect its infrastructure from vandalism and theft. Overall, KAP Industrials' resilience and strategic focus on diversification, efficiency, and investment in growth areas position the company well for continued success amidst a challenging economic environment.