JOHANNESBURG - Afrimat's diversification strategy, cost reduction as well as efficiency improvement initiatives were the key drivers for the group in the last set of financial results, as it continues to navigate in an environment dominated by low economic growth.
In releasing its trading update for the six months to August, the group said it expected at least 5percent growth in its headline earnings a share. “The company expects earnings a share to be between 100.5cents a share and 105.4c, reflecting an increase of between 3percent and 8percent on the previous period,” the group said. Last year Afrimat reported earnings a share of 97.6c.
The group is expecting better results from its headline earnings a share, which is expected to show an increment of between 5percent and 10percent during the period.
“The company expects headline earnings a share to be between 100c and 104.7c,” it said. Last year’s headline earnings a share came in at 95.2c.
Afrimat’s shares were down by almost 5percent in the morning on the JSE yesterday. However, it reversed some of those losses in the afternoon before closing 0.97percent lower at R28.50. The company’s financial results will be released on or about November 2.
Afrimat is a leading black-empowered open-pit mining company providing industrial minerals and construction materials. The group focuses on acquiring companies that are struggling and then turning them around to supplement diversification and support the growth strategy.
To execute its diversification strategy the group acquired entered into an agreement with Wearne to buy the Bethlehem quarry, Bethlehem property and ancillary businesses as a going concern for R30million with an effective date of October last year. A year before that it acquired Diro Manganese and Diro Iron Ore for R276m to further diversify its portfolio.
The diversified portfolio was reflected when the group presented its results for the year to end February.
Headline earnings a share increased 25.4percent to 196.4c compared with 156.6c reported during the corresponding period last year. It said that the improvement in earnings had resulted from a strong performance of the mineral producing operations across all regions. Cash generated from operations grew to R406m, up from R320.3m a year earlier.
During the period the group also disposed some businesses, which included Randfontein and Blue Platinum.
The group indicated that going forward all operating units would be strategically positioned to deliver excellent service to customers, while acting as an efficient hedge against volatile local business conditions. The group’s product range is well diversified to include aggregates and concrete-based products and construction materials, as well as limestone, dolomite and silica as industrial minerals.
- BUSINESS REPORT