Metair’s upbeat trading statement sends shares higher

Vehicle parts maker Metair’s share price rose 6.2% to R21.55 on Tuesday morning after it released an upbeat trading statement.

Metair said it expected to report on March 15 that headline earnings per share (HEPS) for the year to end-December grew by up to 24.6%.

The group splits itself into an “energy vertical”, specialising in batteries and which has expanded geographically; and a “components vertical”, which suffered during the first half of the financial year due to teething problems from new product launches.

Metair said its Turkish battery business enjoyed record production and high demand, but suffered from Turkey’s political uncertainty causing the lira to weaken.

The group’s Romanian battery business also suffered from the lei weakening against the rand.

Its South African operation, First National Battery, improved its performance in the face of high competition after “corrective action progressed as planned”.

The group’s component division is expected to achieve turnover growth in the mid single digits, following an improved performance in the second half of the financial year.

“The major improvement in performance was at Hesto Harnesses specifically, which improved from a loss position in 2016,” Metair said.

The group had secured a R525m five-year revolving credit facility, paying interest of 235 basis points above three-month Johannesburg interbank agreed rate (Jibar), from Absa and Investec, the trading statement said.

Business Day
By Robert Laing, 13 February 2018