Business Day, 15 November 2002, Barloworld's efficiency programme aids growth

BARLOWORLD, the manufacturer and distributor of leading manufacturing brands, reported good growth in revenue and earnings in the year to September.

The group, which is in its 100th year of existence, pushed revenue up 29% to R35,9bn, operating profit was up 39% to R2,06bn, while headline earnings a share rose 25% to 622c.

Barloworld's value-based management programme, which is aimed at getting more efficiency, cash and business out of its existing business, contributed to the earnings growth.

The programme resulted in cash flow from its operations growing 49% to R2,2bn.

Merrill Lynch analyst Pieter Steyn said the benefits of the programme had already started showing over the past few years.

Barloworld CEO Tony Phillips said the success of the programme resulted in the group having no borrowings. This, along with its loan facilities, gave it the capacity to make further acquisitions.

With the economic downturn in the, Phillips said there were "wonderful opportunities" to take over a troubled company there. He said the group was also planning to grow its operation in China.

However, the group did not want to repeat the mistakes of other businesses that invested a lot money in operations that failed.

Phillips confirmed the Barloworld management had toured several countries in South America to view possible acquisitions, but said so far nothing had come to fruition.

Profits for its capital equipment division rose from R618m to R744m. This was on the back of revenue from the division's European operations rising 40% to R6,4bn while profit jumped 33% to R553m.

A special centenary 100c dividend was declared on top of the185c final dividend.