MILNERTON-based light fittings company Eurolux lit up the year-end numbers for JSE-listed electrical goods wholesaler ARB Holdings in the year to end June. Eurolux reported revenue of R281m, but more importantly managed to show a solid R30,5m in pre tax profits.
This was the first time a full year performance by Eurolux was captured by ARB, which acquired a 60% stake in the business for R81m in early 2012.
Eurolux specialises in importing and distributing incandescent, energy saving, LED and fluorescent lamps; light fitting ranges, desk and floor lamps and outdoor and security lights as well as ancillary electrical products including fans and electrical lighting components.
The vendors that sold control of the business to ARB included Peter Willig and Steve Palframan (the former provincial wicket keeper.) The vendors retained a 40% stake in the company and were also kept on as the executive management team after signing new service and restraint contracts.
ARB CEO Byron Nichles said the Lighting division produced an excellent set of results. “These results reflect the combination of strong market share gains, a focus on margin improvement and tight cost control.”
Nichles said the range of electrical accessories launched during the year continues to be expanded and good progress was made by Eurolux, in the commercial and project lighting market. What is most heartening is the trading margin achieved by Eurolux in tough trading conditions. This has shifted up to almost 11% at year-end, compared with 10% at the interim stage. What’s more, Eurolux – while only accounting for 14% of ARB’s almost R2bn turnover – was responsible for generating almost 20% of ARB’s operating profit. Not bad for a R80m investment!
Looking ahead, the growth path seems nicely illuminated for Eurolux. Nichles said the recent key customer gains and successful expansion of the product offering - to include electrical accessories as well as commercial and project lighting - should contribute to continued top and bottom line growth despite consumer spending continuing to be under pressure.
By Jenni McCann