Barloworld Ltd
OTC:BRRAY
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Barloworld Ltd
In the early 20th century, Ernest Barlow, an English entrepreneur with an eye for innovation, laid the foundation for what would become a multifaceted conglomerate known as Barloworld Ltd. Initially, Barlow's ambitions took shape in the realms of power and construction through distributing and servicing Caterpillar earth-moving equipment, igniting a journey that would lead the company into numerous industries across the globe. Over the years, Barloworld extended its reach beyond South Africa, emerging as a formidable player in equipment and automotive sectors, while carefully spinning off non-core businesses like coatings and logistics. The company's resilience and ability to adapt to shifting market dynamics have allowed it to thrive for over a century, standing today as a testament to strategic diversification.
Barloworld’s operations are now streamlined into two main pillars: Equipment and Automotive. The Equipment division, a cornerstone of Barloworld's profitability, caters to sectors such as mining, construction, and power systems, primarily in Southern Africa and Mongolia. Here, the company not only sells machinery but also provides essential after-sales services and maintenance, creating a steady revenue stream and fostering long-term client relationships. On the other hand, the Automotive business encompasses car rental, motor retail, and fleet management, serving a wide spectrum of transport and personal mobility needs. This strategic focus allows Barloworld to leverage synergies across its operations, driving efficiency and enhancing its ability to capitalize on Africa's burgeoning infrastructure demands and the evolving landscape of transportation and mobility services.
In the early 20th century, Ernest Barlow, an English entrepreneur with an eye for innovation, laid the foundation for what would become a multifaceted conglomerate known as Barloworld Ltd. Initially, Barlow's ambitions took shape in the realms of power and construction through distributing and servicing Caterpillar earth-moving equipment, igniting a journey that would lead the company into numerous industries across the globe. Over the years, Barloworld extended its reach beyond South Africa, emerging as a formidable player in equipment and automotive sectors, while carefully spinning off non-core businesses like coatings and logistics. The company's resilience and ability to adapt to shifting market dynamics have allowed it to thrive for over a century, standing today as a testament to strategic diversification.
Barloworld’s operations are now streamlined into two main pillars: Equipment and Automotive. The Equipment division, a cornerstone of Barloworld's profitability, caters to sectors such as mining, construction, and power systems, primarily in Southern Africa and Mongolia. Here, the company not only sells machinery but also provides essential after-sales services and maintenance, creating a steady revenue stream and fostering long-term client relationships. On the other hand, the Automotive business encompasses car rental, motor retail, and fleet management, serving a wide spectrum of transport and personal mobility needs. This strategic focus allows Barloworld to leverage synergies across its operations, driving efficiency and enhancing its ability to capitalize on Africa's burgeoning infrastructure demands and the evolving landscape of transportation and mobility services.
Strong Revenue Growth: Barloworld reported a 12.9% rise in group revenue from continuing operations to ZAR 20.8 billion for the six months ended March 2023.
Profitability Up: Operating profit increased by 16.5% to ZAR 2.1 billion, with headline earnings per share (HEPS) for continuing operations up 29%.
Dividend Boost: The board declared a dividend of ZAR 2 per share, a 21.2% increase from the previous year.
Segment Highlights: Equipment Southern Africa revenue jumped 38.4%, Eurasia saw a strong turnaround in Mongolia, and Ingrain delivered 15% revenue growth despite operational headwinds.
Order Book & Outlook: Equipment Southern Africa reported a strong order book of ZAR 5.7 billion, with positive momentum and optimism for the second half.
Working Capital & Debt: High working capital use led to a negative free cash flow of ZAR 3.3 billion, but improvement and lower net debt are expected in the second half.
Cost & FX Pressures: Finance costs rose with higher interest rates and FX impact, but management expects some relief as working capital unwinds.
