Industrial minerals and construction materials supplier Afrimat says revenue grew 38.8% to R931.9-million for the interim period to August.
JSE listed industrial minerals and construction materials supplier, Afrimat, said revenue grew 38.8% to R931.9-million for the interim period to August this year on the back of improvements in the constructions materials market and successful diversification.
Headline earnings were up also up 41.2%, translating into headline earnings per share of 49.3 cents compared to 35 cents in the comparative period. The group declared an interim dividend of 11 cents a share.
Chief executive Andries van Heerden says the group's performance benefitted from the improvement in the construction materials market which is Afrimat's traditional base. "The increase in revenue is even more meaningful should the once-off mining costs incurred during the period be excluded," he said.
This was necessitated in the KwaZulu-Natal region to ensure long-term compliance with Department of Mineral Resources requirements.
"It is very satisfying to see the success of our diversification strategy measurably proven – our bottom line easily withstood the increased costs we incurred in certain areas with the benefit of additional profits from other parts of the business," Van Heerden said.
Afrimat said the Mining and aggregates sector, which contributes the lion's share of group revenue, generated high profitability off the back of increased volumes and the inclusion of Infrasors for the full period for the first time, which Van Heerden expects to show further growth in the next six months.
"Operationally we are ideally positioned to supply market demand, with all processing plants on track to work at full capacity."
He said Afrimat's flexible service delivery model, which enables the group to marshal mobile equipment and move wherever opportunities arise, is a key advantage in this respect.
The performance of one division, Concrete Based Products' was impacted by labour unrest as a strike at the Gauteng operation negatively impacted profits. In addition the division felt the effect of high cost increases in that sector.
Van Heerden said Afrimat plan to secure a larger stake in industrial minerals group Infrasors is progressing well, following the acquisition of a 50.7% stake in the company in March. During the period Afrimat raised its offer to Infrasors minority shareholders from 35 cents to 65 cents a share, a premium to the 60 cents trading price at the time.
This brought Afrimat's stake in Infrasors to 59.78%. "Given that we acquired the Infrasors stake with intention of extracting value from its assets we can better achieve our aim if we completely control the business during a turnaround like this," he said.
Van Heerden said Afrimat will continue on the path that has realised success in recent years, focussing on optimising its investments in the industrial minerals sector and with the dedicated business development team continually identifying opportunities in existing markets and cross-border.