Afrimat earnings up 25.7% to 50.9c

Posted On Thursday, 13 May 2010 02:00 Published by eProp Commercial News
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Building materials supplier, Afrimat, has reported a 25.7% rise in diluted headline earnings per share to 50.9c for the year ended February 2010 from 40.5c a year ago.

Construction IndustryBuilding materials supplier Afrimat on Thursday reported a 25.7% rise in diluted headline earnings per share to 50.9 cents for the year ended February 2010 from 40.5 cents a year ago.

Revenue was 13.2% higher at R778.0 million while operating profit grew 14.6% to R108.9 million.

A final dividend of 10 cents per share was declared compared with 8 cents last year, taking the total dividend for the year to 16 cents per share, compared with 13 cents a year ago.

The company said the results reflected a significant improvement on the previous year in a successful turnaround.

It benefitted from a strong performance in its Aggregates operations mainly as a result of the strategy to intensify focus on infrastructure-related work, which yielded substantial new contracts.

During the period, Afrimat successfully concluded the acquisition of a 66% equity stake in Blue Platinum - a quarry strategically located close to Lanseria Airport.

It also successfully initiated a BEE transaction that enabled it to become fully compliant with the Mining Charter requirement of 26% Black ownership, ahead of the 2014 deadline.

Post year-end the group acquired the entire issued share capital of Glen Douglas Dolomite from Exxaro Resources for R35 million subject to the fulfilment of certain suspensive conditions.

The acquisition is the first step in Afrimat's expansion and diversification strategy into the industrial minerals sector.

It is anticipated that this investment will realise positive growth for the group once Afrimat's operational model is implemented. This would unlock the vast potential of Glen Douglas over a realistic time horizon of three years.

Afrimat said Aggregates successfully countered the dramatic slowdown in private residential and commercial spend as well as intensified competition in the economically hard-hit Western Cape, to significantly outperform the previous year.

Particularly Denver Quarry which supplies the Nelson Mandela metropole, the KwaZulu-Natal operations and Contracting Services performed well. Afrimat further secured infrastructure projects in the Gauteng, Limpopo and Mpumalanga regions.

Processing plants are all fully-commissioned and well-placed to supply government infrastructure projects to boost the division's revenue going forward.

Readymix Concrete was severely affected by a sharp decline in volumes in the Western Cape due to the generally poor economy in the region.

The SAFCEC strike and other industrial action at the Ulundi operations in the first half of the year resulted in lower sales in KwaZulu-Natal. Operations returned to full production from mid-August 2009.

Concrete Manufactured Products was also impacted by the industrial action in KwaZulu-Natal and consequently suffered decreased volumes.

The anticipated recovery of residential and commercial property development starting in the latter part of 2010 should increase volumes of all the divisions.

Looking ahead, the group said the current challenging economic conditions are expected to start improving during the latter part of 2010 as all indications are that private residential and commercial property development activity is expected to improve.

In addition government's commitment to infrastructure spend should stimulate demand for Afrimat's products. Internal business strategies and initiatives are set to expand volumes and reduce cost, which are key focus areas in existing and acquired operations.

These factors, supported by further product diversification into sectors such as industrial minerals, should result in increased volumes, it said.

 

Last modified on Saturday, 05 October 2013 16:57

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