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Send  Share  RSS  Twitter  26 Sep 2012

VENTURES: How Wiese Follows The Money

 



Recent Western Cape Business News

INVICTA Holdings - not too long ago a relatively obscure agricultural equipment supplier based in Constantia - looks like it’s well on the way to becoming one of SA’s most successful industrial companies.

Readers of CBN were alerted to Invicta’s potential several years ago in an article that described the company as retail tycoon Christo Wiese’s best kept secret.

Wiese - via nominee companies Titan Nominees and Dorsland Diamante - holds around 34% of Invicta.

Wiese bought into the business when the operational focus was still firmly rooted in the agricultural sector.

The business has been significantly bulked up and now it holds a sprawling presence across the industrial, mining, construction and agricultural sectors.

The profit growth over the last 10 years has been nothing short of astounding as the executive management, led by Arnold Goldstone, has pieced together a string of inspired acquisitions and latched onto new growth opportunities.

Well known brands include NSK, Fenner, Tsubaki, Ferodo, Nord, New Holland and Doosan.

Back in 2002 Invicta generated turnover of some R1.35 billion, but by 2012 the top line had stretched to over R5.6 billion. More impressive is that operating profits have grown from R122 million in 2002 to over R600 million in 2012.

Of course, the billion dollar question is how much longer can Invicta continue to grow at this scintillating pace?

That question may partly be answered by Wiese himself.

After clearing out several single stock future contracts he spent over R100 million in July buying Invicta shares.

Perhaps it’s not the quantum of the share buying by Wiese (whose legendary wealth was reinforced by recent reports that he was subject of a humungous R2 billion tax claim by Sars) that underlines Invicta’s future prospects. While the R100m may not be a fortune for Wiese (relatively speaking), he did buy Invicta shares close to the all time high on the JSE. That would suggest Wiese - one of the most astute investors in SA - still sees plenty upside.

While Invicta enjoys a position of leadership in bearing, seals, power transmission components, drives, belting, fasteners, filtration and hydraulics segments - most notably through bearing giant, Bearing Man - it is encouraging to see the original roots of the business still holding firm.

Invicta’s so-called Capital Equipment Group (CEG) - which shifts industrial and agricultural machinery as well as earth-moving equipment and tractors - was a star performer in the last financial year.

CEO Arnold Goldstone, writing in the annual report, said CEG performed beyond expectation. “The year started off with good prospects in all companies in CEG. With continuous focus on after-sales support, customer communication and cost control, margins improved and the best ever operating profits were achieved.”

He said CEG was positioned to take advantage of recovering markets. “All divisions rose to the challenge and delivered improved profits and cash flow. By the end of the financial year, virtually every market segment serviced by CEG had shown an improvement over the prior year, with particularly outstanding results being achieved in the construction equipment and agricultural equipment divisions.”

Goldstone added that CEG has doubled its turnover over the last five years and trebled operating profit.

All things considered perhaps Wiese’s recent foray into Invicta shares is well timed.



 
 
 
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