Metair generates 49% of its revenue from automotive batteries, 47% from automotive components and 4% from industrial and non-automotive products. 61% of the revenue is generated in South Africa, so there’s a solid offshore component – 28% in Turkey and the UK and 12% in Romania.

Metair has released results for the year ended 31 December 2021. They paint a pretty picture, with revenue up 23% and EBITDA up 80%.

The numbers get bigger and more exciting the further down you go, with HEPS up 139% for the year to 354 cents. That’s higher than the 336 cents achieved in 2019 before the virus-that-shall-not-be-named attempted to ruin our lives. It’s Friday and I’m allowing myself one Harry Potter reference for the day.

The dividend per share of 90 cents is 20% higher than last year but still well below the 120 cents per share declared in 2019. The earnings may have beaten pre-pandemic levels but the company isn’t ready to pay those levels of dividends.

A 39% drop in cash from operations is a good explanation for why the payout ratio hasn’t recovered. Working capital investments, unusual costs driven by supply chain disruptions and investments for new customer models and facelifts were to blame for the free cash flow pressure.

Importantly, group return on invested capital (ROIC) improved to 16.4%, well ahead of the target of 13.4%. Metair needs to invest shareholder cash but achieves good results when it does.

After a record performance in the energy storage business in 2021, Metair will hope that the automotive components business will have a year of fewer supply chain disruptions.

The share price rallied 5.9% in response to this result. Metair is up 55% in the past year but has gained just 11% in total over the past five years.