Barloworld continues record growth

Barloworld continues record growth
Published: 18 November 2004

Barloworld, the listed South African international brand management company, has increased its stake in Pretoria Portland Cement (PPC) to 71.6 per cent  from 67.4 per cent through a R300 million investment. It has not excluded  acquiring 100 percent of the listed cement and lime producer.

Tony Phillips, Barloworld’s chief executive, said yesterday the group had  "clearly been nibbling away at PPC" and at an appropriate price would look  at acquiring 100 per cent.

Phillips said incremental acquisitions to enhance value were an important  part of Barloworld’s growth strategy and in the past year it had acquired  100 percent of Avis, the car rental and fleet management company, and more  than doubled the geographic footprint of its Russian Caterpillar dealership.

However, Phillips said at PPC’s current share price "it would be impossible  to take out" and PPC’s share price had "gone ballistic" since its results  were released. PPC shares fell 2.7 per cent to R250 yesterday.

Phillips said that Barloworld had increased its stake in PPC "at nothing  like the current share price", adding that it would obviously like to control PPC’s cash flow but any acquisition would be based on Barloworld’s value calculation and what was in the interest of shareholders.

On a segmental basis, Barloworld Equipment - which housed the Caterpillar dealerships - and PPC posted strong profit growth and were well supported by the coatings and motor operations, which more than doubled their contributions. Barloworld’s five-year record of 22 per cent annual compound growth in headline earnings was testimony to the way the company is now being managed.

"It has been achieved by focusing on value creation at every level. We are well on track to achieve the goal we set ourselves in 2002 of doubling the value of Barloworld by 2006" said Phillips.