Bell Equipment's profits down

The group recorded profits after tax of R243m, which compared with the R297m in the previous year. Of the current year's profits‚ R225m is attributable to shareholders.

Bell said the drop in profitability could be attributed to three major factors. While sales increased by almost 12% the overall gross profit margins fell by about 6‚1% in comparison with the previous year‚ giving rise to a modest growth in profit in Rand terms of 5.1%.

This deterioration was a result of greater competition in a declining market following the economic turmoil both locally and abroad‚ particularly in the second half of the year.

The improved gross profit in Rand terms was more than offset by an increase in overheads of 11.1%‚ it said.

The third contributor was a reduction in other operating income of R31m. This stemmed largely from a reduction in import duty rebates relating to the Motor Industry Development Programme and also a reduction in extended warranty income.

Looking ahead‚ Bell Equipment said it had a growing order book for the first half of 2013.

"There are clearly obstacles in the face of the Eurozone turnaround but it appears that many economies are showing signs of growth. Certainly‚ within South Africa‚ the projected increase in infrastructure spending should have a positive impact on the company‚ particularly as its range of products fit the needs of the National Development Plan‚" Bell said.

The group declared a gross cash dividend of 40 cents a share for the year,