ELECTRICAL: Eurolux Shines For ARB
Recent Western Cape Business News
MILNERTON-based lighting specialist Eurolux has shone brightly for JSE listed ARB Holdings in the year to end June.
CBN reported late last year that ARB - a well known electrical products wholesaler - had snapped up a 60% stake in Eurolux for R81 million.
Results from ARB showed Eurolux chipping in revenues of R120 million and operating profit of R5 million in an abridged 10 month trading period.
ARB executive director Byron Nichles said the Eurolux acquisition was earnings-enhancing despite the combination of mark-to-market losses incurred on forward cover due to the sudden and unexpected recovery of the rand in January 2012.
Nichles pointed out that if Eurolux was included from the beginning of their financial year its revenue would have been a whopping R193.5 million and the impact on profit after tax would have been over R16 million. That level of profitability fully justifies ARB’s purchase price, which inferred a value of some R135 million on Eurolux.
Eurolux imports and markets a wide range of incandescent, energy saving, LED and fluorescent lamps; a broad range of light fittings, desk and floor lamps and outdoor and security lights.
The business is still 40% owned by senior managers (and vendors) Peter Willig, Steve Palframan and Shaun Bouchier - but after the solid maiden profit contribution CBN wonders whether ARB will not hasten plans to snag 100% of this very profitable business.
Aside from the valuable profit contribution Eurolux also offers ARB a chance to leverage its extensive distribution network to build additional market share for the lighting specialists. Eurolux’s successes in the commercial and industrial lighting markets will be interesting to gauge in the years ahead.
Nichles seems confident Eurolux will continue to deliver in the year ahead.
“Notwithstanding the tough macro economic environment, our strategic acquisitions of Eurolux and ICS, which will be included for the full year to June 2013, will enhance our continued growth in the coming years.”
Nichles also indicated ARB was looking at potential acquisitions. Perhaps consideration will be given to opportunities to bolt-on selected lighting pieces at Eurolux?
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