Spindex shares jump 10% as full-year profit surges 75% on Covid-19 demand

The shares of precision engineering group Spindex Industries jumped on Wednesday after its earnings announcement.
The shares of precision engineering group Spindex Industries jumped on Wednesday after its earnings announcement.PHOTO: ST FILE

SINGAPORE (THE BUSINESS TIMES) - Precision engineering group Spindex Industries saw a 75 per cent surge in net profit to $21.3 million for the full year ended June 30, due in part to the Covid-19 pandemic.

Remote working has contributed to new demand for office equipment, domestic appliances and hobby-related equipment, while pandemic-related disruptions to the global supply chain have resulted in some forward stocking of components, the mainboard-listed company said in an exchange filing on Tuesday (Aug 24).

Spindex shares jumped on Wednesday after its earnings announcement. At 11am, they were trading 12 cents higher, or 10 per cent, at $1.32.

For financial year 2021, the company's revenue rose 37 per cent to $204.9 million despite generally uncertain and challenging market conditions, Spindex said.

Its machinery and automotive systems segment saw a 51 per cent growth in revenue in the second half of the year, compared with the same period in the previous year. Continued demand for office equipment pushed revenue up 69 per cent for its imaging and printing segment in the same period.

Earnings per share rose to 18.44 cents, from 10.57 in the preceding year.

The company's directors have proposed a dividend per share of 4.5 cents.

Looking ahead, however, Spindex said business visibility remains limited and it is also "premature" to assume that containment of Covid-19 will result in additional demand.

This is because its supply chain has been disrupted as a result of logistics delays and supplier closures due to the spread of new variants of the coronavirus, and government-mandated restrictions on operations and commodity pricing could raise business costs and pose further challenges.

Ongoing geopolitical factors such as tariffs would also have an impact on customer demand, the company said.

Still, Spindex's strong financial position has allowed it to invest for long-term growth while maintaining a healthy level of cash and cash equivalents of $43.9 million, it said.

Its main cash outflow items under investing and financing activities were purchase of property, plant and equipment and the payment of dividends.

• With additional information from The Straits Times