Brikor sees 1.7c vs 0.1c earnings loss

Posted On Thursday, 10 February 2011 02:00 Published by Commercial Property News
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Construction group Brikor announced that its fully diluted headline loss per share for the six months ended August 2010 was 1.7c against 0.1c diluted earnings.

Garnett van Niekerk Parkin BrikorConstruction group Brikor announced on Wednesday that its fully diluted headline loss per share for the six months ended August 2010 was 1.7 cents against the diluted headline earnings per share of 0.1 cents in the corresponding period of 2009.

Revenue declined by 5% to R147.6 million from R155.4 million due to lower demand. Gross profit decreased by 34% to R24.4 million .

Gross margins at 16.5% (2009: 23.9%) remained under pressure due to lower margin products in the sales mix combining with a lower growth in demand, which was exacerbated by continued increased input costs, such as energy, fuel, gas and raw materials.

Total loss attributable to equity holders widened to R10.4 million from R4.3 million previously.

Brikor is a manufacturer and supplier of building and construction materials to the building industry.

The company said the lagging economic recovery, with its significant effect on all levels of business and society, resulted in severe adverse trading conditions continuing in the building and construction sectors.

"Notwithstanding the sharp decrease in the mortgage rate, financial institutions maintained their rigid approach to lending, which contributed to subdued activity in the residential market.

"Residential construction activity was mainly attributable to the contributions of the unrecorded additions and alterations market. Rural demand started to show the impact of retrenchments on consumer spending," it said.

Brikor said the results were worsened by delays and cancellations in building and construction projects, most notably, the awarding of tenders by the metropolitan municipalities.

Looking ahead, the group said its priority remained cash generation, working capital management and realising the value in inventory and receivables.

"Key management focus areas remain sales growth, margin management, productivity improvement and cash and working capital management. Corrective measures have been taken to reduce costs and right-size the group.

"Rigorous cost controls remain a key point of focus as Brikor aligns its operational cost structures with lower production volumes while maintaining its reputation for service," it said.

It added that the pace of SA's economic recovery remained uncertain and it was anticipated that further restrictive and volatile trading conditions would prevail in the short to medium term.

Last modified on Friday, 28 June 2013 02:08

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