Dr Christo Wiese
Non-executive chairman

Arnold Goldstone
Arnold Goldstone
Executive director



The Group has delivered exceptional results for the year to March 2017 under most
difficult circumstances. The conditions in the Group’s diverse businesses proved to be challenging. Unusually high volatility in the Rand exchange rate, the worst drought in living memory, continued political turmoil and a recession in South Africa in quarters three and four of the financial year. It is therefore extremely pleasing to be able to report such good results, which bear testimony to the resilience of the Group.


The continuing operations comprise:

  • CEG (Capital Equipment Group) – agricultural machinery, construction machinery, forklifts and related parts, including Kian Ann, which is based in Singapore.
  • ESG (Engineering Solutions Group) – distributor of engineering products, technical services and solutions including bearings, tools, electric motors, hydraulics etc.

Revenue of continued operations increased by 9.5% from R8.8 billion to R9.6 billion. Operating profit increased by 48% from R681 million to R1.010 billion. These results are outstanding in light of the trading conditions outlined earlier.

Basic earnings per share from continuing operations grew by 24% from 374 cents per share to 465 cents per share, whilst diluted earnings per share increased by 26% from 396 cents to 499 cents per share. The dividend for the year is up 18% from 142 cents per share to 167 cents per share, maintaining 2.75 times dividend cover on basic EPS. Cash generated by continuing operations was very strong at R1.35 billion, up 130% from R586 million in the prior year, which is an excellent performance.


The Capital Equipment segment continued to focus on the growing importance and contribution of original manufactured and
aftermarket parts. This division had a highly satisfactory year in a sector which was wracked by the worst drought in South Africa in over 100 years which resulted in equipment volume declines in the agricultural sector.

Despite this, revenue in CE G grew by 10.5% to R4.955 billion for the financial year through a combination of increased
market share and an improved sales mix. This growth was all organic. Good gross margin management and exceptional cost control led to operating profit increasing by a phenomenal 30% to R470 million. Invicta announced on 1 February 2017 that CE G had reached agreement will distribute their New Holland brand agricultural products directly into South Africa, Swaziland, Lesotho, Botswana and Namibia with effect from 1 May 2017.

The impact on the Invicta Group results for the 2018 financial year is not expected to be material. The remaining distribution rights for other CNH branded products (CASE IH & CASE Construction) are not affected by this agreement. CE G will continue to support the New Holland agricultural products in the aftermarket.


The Engineering Solutions segment grew revenue by 8.5% (R366 million) to R4.665 billion for the year. A combination of careful gross margin management, and cost containment saw operating profit increasing by a pleasing 18% to R480 million.

The R350 million construction and infrastructural expansion programme at BMG World in Johannesburg has been highly successful, with the relocation of staff and inventory from the Durban facilities now complete. The Durban head office has now been completely shut down and sold off. Some of the efficiencies from the programme are already evident with the main benefits projected to come through after September 2017, when the new warehouse management and demand forecasting systems will become fully operational.

New branches in Tanzania, DRC and Ghana have started gaining momentum, adding to the non-South African operations already in place in Zambia, Mozambique, Swaziland, Namibia and Botswana.



The Building Supplies segment grew revenue by 3% to R1.896 billion. Operating profit was up by a highly commendable
55% to R108 million, adding R38 million during the year.

Investment in and construction of the new distribution facility in Midrand, Johannesburg to the value of R150 million is in progress. This logistics and warehousing hub will provide the infrastructure base for the continued strong growth expected from the Gauteng market and southern African territories.

Invicta announced the disposal of BSG to Steinhoff Doors and Building Materials Proprietary Limited on 16 February 2017.
All conditions precedent have been met, except for Competition Commission approval, which is expected to be received within the next few months. The purchase consideration is based on an enterprise value of R732 million for 100% of BSG and excludes certain manufacturing and property businesses currently forming part of BSG, which will be disposed of separately.


The Group’s strategic focus is to generate cash in its existing businesses and to invest this in making sound acquisitions that diversify the Group’s revenue streams both within its product groups and geographically.


The Group remains resolute in its efforts to produce results above market benchmarks and its competitors. Trading conditions are expected to remain challenging in the year ahead.

The businesses that make up the Invicta Group have strong fundamentals and enjoy significant competitive advantage.
Management will continue to consolidate the strengths of the current businesses that make Invicta one of the leading suppliers of industrial consumable products, capital equipment and parts in southern Africa.


The changes to the directorate are set out in the Directors’ Report. We want to make special mention, though, of changes to the
executive team. Byron Nichles resigned as CEO of the Engineering Solutions Group (ESG) effective 31 October 2016 after two years with the Group, and was appointed as a non-executive director of the Invicta board effective 1 November 2016.

Charles Walters resigned as CEO of the Invicta Group effective 31 January 2017 after nine years with the Group, the last two of which were as the Group CEO . Arnold Goldstone, who had led the Group as CEO from 2000 until 2015 was re-appointed as Group CEO effective 1 February 2017. For the past two years, Arnold has been executive deputy chairman, which role has now fallen away.

Changes like these to a small executive team can be very disruptive, but it is testimony to the quality of the leadership and the quality and depth of the larger executive group who support the senior executive team, that these changes were not too disruptive.
Thank you to them for stepping up to the plate and taking on additional loads. Everything has settled down now and we look forward to maintaining the forward momentum.


The board is once again highly appreciative to the executive management, the respective management teams of our businesses and most importantly all the staff, for the excellent commitment and performance in what can only be described as difficult and uncertain economic times.

The board is confident that, with the strengths the Group possesses and the strategic decisions that the board will take, the Group will continue to deliver sustainable value to all stakeholders going forward.