The company said yesterday that it would continue looking for purchases that were in line with its diversification strategy. As a result, it had 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 17, 2016.
In June last year the group also acquired Diro Manganese and Diro Iron Ore. The aggregate purchase consideration payable for the acquisition of Diro was R276m, a move it pinned down to diversifying its portfolio in 2016.
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.
Afrimat says its new business development remains a key component of the group’s growth strategy. “The dedicated business development team continues to successfully identify and pursue opportunities in existing markets, as well as in anticipated new high-growth areas in southern Africa,” the group said.
In the year to end February, the group said headline earnings per share had increased 25.4percent to 196.4cents, compared to 156.6c a share during the corresponding period last year. It said the improvement in earnings had resulted from a strong performance of the mineral-producing operations across all regions.
“The group was successful in increasing its operating margin to 18.2percent from 16.3percent and improving cash generated from operations from R320.3m to R406m through the efficiency improvement drive,” the group said. Earnings had been improved by efficiencies, cost reduction and the disposal of marginal businesses, including those of the Randfontein and Blue Platinum businesses.
Going forward, Afrimat said 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 product range is well diversified to include aggregates and concrete-based products as construction materials, as well as limestone, dolomite and silica as industrial minerals.
"The group recently announced the addition of bulk commodities by entering the iron ore industry,” it said.
Afrimat reported a 13.1percent increase in revenue to R2.23billion, up from R1.97bn, while profit was up by 24.6 percent to R279.39m, up from R224.19m as compared to 2016.
“The group continues to deliver solid results, driven by its diversification strategy as well as cost reduction and efficiency improvement initiatives,” it said. The board declared a final dividend of 50cents a share, up from 41c a year earlier.
Afrimat shares rose 4.63 percent on the JSE yesterday to close at R28.50.