Afrimat sees improvement in construction

Posted On Tuesday, 11 August 2009 02:00 Published by Commercial Property News
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Afrimat said that despite a slower trade performance in the year to February 2009, improvement is already evident in the months since year-end.

Construction IndustryBlack-empowered construction materials manufacturer Afrimat on Tuesday said that despite a slower trade performance in the year to February 2009, mainly as a result of the economic downturn but exacerbated by a number of once-off costs, improvement is already evident in the months since year-end.

It follows results from South African construction group Group Five which revealed diluted headline earnings per share of 508 cents for the year ended June 2009 from 398 cents a year ago - an increase of 28%.

"A concerted exercise to focus group activities on public sector infrastructure development is beginning to yield positive results. In addition better operating margins have been achieved due to strict cost control and stability in materials pricing. Further, higher return on net assets and a satisfactory cash situation have strengthened the group's financial position," Afrimat said.

During the first quarter of the 2010 financial year Afrimat said it realised a return of normalised profit distribution across the group, with aggregates accounting for 80%, Readymix 10% and concrete manufactured products 10%.

"This was spurred by a significantly improved performance from the aggregates division. The Readymix division is still marginally down overall, reflecting the very weak market conditions in the Western Cape, however performance in the division has been boosted by a strong showing in other parts of the country," Afrimat said.

Concrete manufactured products' contribution was slightly lower year-on-year with volumes down on the prior year. The group, however, added that it was expected to be alleviated going forward by a healthy project pipeline in certain parts of the country.

Afrimat said its strategy to counter the cyclical nature of the industry by expanding into more stable growth nodes had gained momentum over the past 12 months.

"The group attempts to identify areas of high growth early on, and then establishes a footprint in the region either via acquisition or by organically building capacity. KwaZulu-Natal, , Mpumalanga and Limpopo have been targeted over the past year," Afrimat concluded.

Last modified on Thursday, 03 October 2013 10:51

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