Reunert: dull but not dead

Reunert has long been the kind of stock that lulls investors to sleep — a steady performer known for paying reliable dividends year after year.

But in 2024 the company briefly resembled a growth share, with soaring demand across its renewable energy businesses driving the share price up by as much as 37% at one point. With South Africa’s power crisis still biting early in the year, households and companies scrambled for solar panels, battery backups and other devices to keep the lights on — and Reunert was one of the biggest beneficiaries.

At the same time, several of its more traditional divisions, including cable manufacturing and power equipment, appeared poised for a rebound as long-awaited infrastructure activity finally showed signs of life.

However, the thrill proved short-lived. By late 2024, normal service had largely resumed, both for Eskom’s grid and for Reunert’s share price. Without power cuts, the frantic demand for home solar systems and backup batteries cooled off. Reunert itself acknowledged that the battery storage market turned “extremely weak” once the lights stayed on, with the residential and small-business segment in particular stalling in the absence of load-shedding. In fact, management made the call to dispose of its battery subsidiary, Blue Nova Energy, in 2025, saying the unit no longer met the group’s strategic objectives.

Reunert’s other business units also flattered to deceive, as long-awaited transmission grid and infrastructure projects were delayed, postponing the surge in demand the company had been gearing up for.

Of course, as a diversified industrial and technology group that’s been around for more than 130 years, Reunert has navigated many cycles. It operates across three main segments: electrical engineering (which houses its cable manufacturing and power equipment operations), ICT for office and communications systems, and applied electronics (which includes everything from defence electronics to renewable energy solutions).

The common thread is that these businesses tend to have steady (if unspectacular) demand, which explains why Reunert earned a reputation as a stable but dull performer. But, as the events of 2024 showed, certain parts of this portfolio can rev into high gear when the market conditions are just right.

Take Reunert’s electrical engineering segment. This is the company’s industrial backbone, centred on power cables and electrical accessories that are vital for utility grids, construction projects and mines. Lately, this business has been soft as South Africa’s infrastructure spending remains in the doldrums, with major projects to expand the electricity grid or upgrade municipal power networks slow to get going. In 2025, Reunert’s power cable division actually saw volumes fall as the anticipated infrastructure boom failed to materialise.

The elephant in the room here is Eskom. The state-owned utility has ambitious plans to expand and modernise the country’s transmission network — plans that include installing about 14,000km of new power lines over the next decade, a staggering increase considering that just 4,000km were added in the past 10 years.

If and when this build-out gets under way, it will translate into huge demand for cables, transformers and switchgear — precisely Reunert’s playing field. Thus far, however, Eskom’s rollout has been repeatedly delayed. Reunert noted that meaningful transmission projects likely won’t commence before the 2026 financial year.

The group remains strongly cash generative, comfortably funding its generous dividends, and boasts a solid balance sheet

The applied electronics segment is where some of Reunert’s most exciting, high-growth activities reside. One part of this segment is defence technology, a niche in which it has a proud pedigree. The company’s Reutech division supplies a variety of military and industrial electronics, including advanced radar systems, secure tactical communications gear, electronic fuses for munitions and even wireless detonation systems for mining. This division has boomed lately, supported by geopolitical tensions that have spurred many countries to ramp up their military budgets.

The other part of applied electronics is Reunert’s renewable energy ventures. Recently, the company has shifted towards large commercial and industrial projects. Businesses in South Africa continue to invest in their own solar generation capacity to shield themselves from high electricity tariffs and to meet sustainability goals. Reunert is capitalising on this by providing solar installations for factories, office parks and mines, often bundled with battery storage and advanced energy management systems. This includes a growing base of solar assets the company owns outright, creating an annuity-style revenue stream and effectively turning Reunert into a small-scale independent power producer.

Lastly, Reunert’s ICT segment provides a stable, if less flashy, contribution. This division is anchored by the Nashua brand — once known primarily for office photocopiers, now repositioned as a broad “total workspace solutions” provider. Nashua still leases out printers and office hardware, but it also offers services such as business connectivity, communications systems and even backup power solutions for small businesses.

In recent years Reunert has bolstered the ICT arm by acquiring companies that bring more advanced tech services into the fold. A notable move was the 2023 acquisition of a majority stake in IQbusiness, one of South Africa’s largest management and technology consulting firms. The idea is to leverage Nashua’s wide network of SME clients and provide them not just with hardware, but with higher-margin IT services as well.

Taken together, these pieces reveal a far more dynamic company than Reunert’s “boring” reputation implies. The group remains strongly cash generative, comfortably funding its generous dividends, and has a solid balance sheet with a net cash position of R743m. At current levels, the share trades on an earnings multiple just below 10 and offers a dividend yield of roughly 6%.

An upcoming leadership change may give the business fresh momentum, with long-serving CEO Alan Dickson stepping down at the end of February 2026 and Ethos Capital Partners’ Anthonie de Beer set to take over. De Beer has a proven record of leading complex, diversified organisations and is widely respected for his strategic acumen and operational expertise.

For investors, Reunert offers steady income, an undemanding valuation and a measure of upside optionality. Should those long-delayed infrastructure projects finally materialise, this supposedly “boring” stock could easily deliver another unexpected burst of excitement. As seasoned market watchers know, the quietest shares often prove the most surprising.