Invicta withholds dividend amid COVID-19 uncertainties

Invicta, a leading industrial engineering group, has faced a challenging period marked by the COVID-19 pandemic and economic uncertainties. The company's CEO, Steven Joffe, recently discussed the company's performance and future outlook in an exclusive interview with CNBC Africa. Despite the tough operating environment, Invicta managed to navigate through the crisis and build a robust balance sheet that can weather potential storms in the months ahead. During the period under review, Invicta faced the challenge of high net debt and the risk of breaching covenants. Joffe emphasized the importance of close collaboration with the company's bankers to protect both shareholders and lenders. Through focused efforts on cash flow management, cost-cutting, and efficient working capital management, Invicta delivered strong results, demonstrating resilience in the face of adversity. One key decision made by the board was to withhold the declaration of an interim dividend, citing the uncertainty surrounding a possible second wave of COVID-19 infections. Joffe highlighted the need for decisive and swift action in the event of a resurgence, emphasizing the importance of protecting the staff to safeguard the company's operations and bottom line. Looking ahead, Joffe addressed the potential challenges posed by Brexit and the uncertainties in Europe and America. Despite the ongoing uncertainties, Invicta's KHE business, with operations in multiple countries including the United States and the United Kingdom, has continued to perform well. The company remains cautious but optimistic about its international operations, underscoring the resilience of its diversified business model. One area of focus for Invicta is the optimization of its business model in Southeast Asia, with plans to enhance operational efficiency and explore opportunities for margin expansion. By reevaluating its supply chain and distribution channels in the region, the company aims to drive growth and profitability in emerging markets. Notably, Invicta's e-commerce platform for its BMG business has been well-received, with a wide range of products available online. With over 57,000 items on the platform, the company is gradually onboarding clients to capitalize on the growing trend of digital commerce. The CEO expressed optimism about the platform's potential to fuel business growth in the long term. As Invicta looks towards the second half of the financial year, Joffe highlighted the potential impact of a successful COVID-19 vaccine in South Africa. With a strong foundation in place, the company aims to leverage its resilience and adaptability to capitalize on emerging opportunities and drive sustainable growth in the future.