enX FY2025: Capital returns shine amid power segment weakness

Key topics:R520m returned to shareholders through two special payoutsPower revenue down 33% amid lower loadshedding, delayed projectsNet loss R156.9m after impairments from disposalsSign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..BizNews Reporter.enX Group Limited has released its audited financial statements for the year ended August 31, 2025, revealing a group in the midst of significant strategic restructuring, characterised by major cash returns to shareholders but depressed operating performance in its core continuing business. The full-year results reflect the ongoing strategy of executing strategic disposals to unlock value for shareholders.The group's continuing operations are now confined to the Power segment (New Way Power) and the Service Centre, following the disposal of the Fleet segment (Eqstra) in the prior year and the Lubricants segment in March 2025. Furthermore, the Chemicals segment (WAG) has been classified as a disposal group held for sale and a discontinued operation as of June 30, 2025.The Good: Capital returns and clean governanceThe most positive aspect of the financial year was the massive return of capital to shareholders. Following the disposal of the Lubricants segment, enX facilitated gross special distributions totalling R520 million. This return was executed through two special distributions of R1.55 and R1.30 per ordinary share, paid in April and August 2025, respectively. However, this led to a reduction in Net Asset Value (NAV) per share to R5.24 (down from R9.06 in 2024).Financially, the group reported cash inflows before financing of R241 million (a significant turnaround from an R811 million outflow in 2024). Net finance income also increased to R53 million (2024: R44 million), driven primarily by higher surplus cash balances held following the disposals.From a governance perspective, the external auditor, KPMG Inc., issued an unmodified (unqualified) report on the consolidated and separate financial statements. Management also reported that weaknesses identified in the internal control systems in the prior year have been improved through enhanced systems and a co-sourced internal audit function. Additionally, Service Centre costs decreased significantly to R36 million (2024: R65 million) due to downsizing head office administration.The Bad: Operational and disposal impactsDespite the strong capital management, the performance of the continuing core operations faced substantial headwinds:Revenue decline: Revenue from continuing operations plummeted by 32% to R378 million (2024: R557 million).Power segment struggles: The key Power segment saw revenue fall by 33%. This sharp decline was attributed to minimal loadshedding this year (compared to approximately 120 days in the prior year) and delays in large-scale power data centre customer projects. This resulted in the Power segment’s profit before tax dropping to R16 million (2024: R53 million).Operating Loss: The operating loss from continuing operations (before net finance costs and impairments, excluding a non-recurring expense) worsened slightly to R23 million (compared to a R22 million loss in 2024).Non-recurring expense: A non-recurring R15 million expense was incurred to settle a limited guarantee claim relating to Cap Leverage Proprietary Limited (CapLev) in June 2025.Overall net loss: The group recorded a substantial net loss after taxation of (R156.9 million) for the year (a reversal from the R229.6 million profit in 2024).Impairments on disposals: The loss was heavily influenced by significant impairments related to the restructuring process. The Lubricants disposal group faced an impairment of R165 million and ultimately resulted in a loss on disposal of R27.2 million (after impairment). The Chemicals segment disposal group was also impaired by R71 million.Customer concentration risk: A forward-looking concern noted is the high concentration risk, as a single customer accounted for 46% of the group’s total revenue in FY2025, up significantly from 34% in 2024.Outlook: A focus on further restructuringenX's remaining continuing operations rely heavily on the Power segment, the growth of which is still linked to the extent of loadshedding and the completion of data centre orders. With the Chemicals segment reported as held for sale, the board intends to continue reviewing the remaining portfolio in line with its strategy of unlocking value for shareholders and remains open to opportunities to further return capital.