The share price surged to R29 a share, gaining on Monday’s closing price of R27.50. However, by the end of the day the company closed at R28.50.
Afrimat, a leading open-pit mining company providing industrial minerals and construction materials, said it expects earnings per share (Eps) to be between 190.6 cents and 198.4c a share for the year to end February.
This means the company will see its earnings rise between 22 percent and 27 percent compared to the 156.2c a share reported in 2016.
The group operates five divisions, which include: mining and aggregates, industrial minerals, concrete products, contracting international and readymix.
The group also expects its headline earnings per share (Heps) to show an improvement over last year’s figure.
“The company expects Heps to be between 191.1c and 198.9c per share - up from 156.6c per share compared to the prior period - reflecting an increase of between 22 percent and 27 percent on the previous period,” the group said.
In the financial results to end February 2016, the group reported headline earnings were up by 15.2 percent to R315 million, translating into headline earnings per share of 156.6c a share.
The group attributed this to a solid improvement in earnings resulting from a strong performance of the mineral- producing operations across all regions.
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The group was successful in increasing its operating margin to 16.3 percent from 14 percent.
It also improved its cash generated from operations to R320.3 million from R261.6 million through its efficiency-improvement drive.
Improved efficiencies, cost reduction and the disposal of marginal businesses in the prior year contributed further to this improvement in earnings.
A shift towards more valuable products in the product mix enhanced earnings, but was affected by overall lower sales volumes.
Operating expenses included the cost of additional resources required to increase the group’s compliance capability and costs associated to establish the operations in Mozambique.
The group had indicated that it is well positioned to capitalise on its strategic initiatives, which include continued growth from an excellent asset base, selective acquisitions and greenfield expansion projects.
It said the acquisition of Cape Lime effective on March 31, 2016 will complement and augment Afrimat’s industrial minerals product offering and further expand its range of unique products.
Afrimat is expected to release its results on or about May 18.