Our opinion on the current state of RLO

Reunert (RLO) is a company involved in electrical appliances, electrical engineering, and information communications. The company has been in existence for 130 years and listed for 70 years. It has operations in Australia and Sweden as well as in Zimbabwe, Zambia, and Lesotho. It exports to many countries around the world. Electrical engineering accounts for roughly half of its annual turnover which is about R10bn. In its results for the year to 30th September 2023 the company reported revenue up 24% and headline earnings per share (HEPS) up 16%.The company said, "Improved operating leverage was delivered by the Group as segment operating profit increased by 28% to R1 462 million (2022: R1 140 million). The Group's profit for the year increased by 14% to R959 million (2022: R844 million)". The share trades on a P:E of 10,23 which looks reasonably priced to us. However, its future performance will depend on the rand/US dollar exchange rate, a recovery in the South African economy and increased business from government and quasi-government organisations. Technically, the share was "bumping along the bottom" of a downtrend caused by COVID-19 and, although volatile, has been recovering since.