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[June 2009]
South African Brickmaker Reports FY Results
Financial results for Brikor Ltd in South Africa show that the group’s consolidated revenue increased by 8.8% to R339.3 million (2008: R311.9 million), mainly as a result of the inclusion of the Zululand Quarries acquisition from 1 March 2008 and the Donkerhoek acquisition from 1 August 2008. Gross profit decreased by 63.4% to R45.4 million (2008: R124.1 million) and gross profit margins decreased from 39.8% to 13.4% as a result of the continued increased input costs, such as labour (including the strike action), energy, fuel and raw materials.
Margins remained under pressure due to lower margin products in the sales mix combined with a lower growth in demand, exacerbated by the group’s inability to pass input cost increases on to its customers as a result of price pressure and competition for volume. Subsequent to the financial year-end, the group returned to profitability and overall gross profit margins improved.
It is not anticipated that the group will achieve the same gross profit margin levels as reported in 2008 in the medium-term. The reduction in the group’s gross profit, combined with higher operating expenses, increased depreciation charges for the larger asset base and finance costs, resulted in a loss per share of 4.5 cents (2008 earnings: 13.0 cents). Fully diluted headline loss per share was 3.9 cents (2008 earnings: 12.8 cents). The increase in fixed assets, goodwill, intangible assets, inventories and trade and other receivables relate to the acquisitions of Zululand Quarries and Donkerhoek Quarries. Additions to property, plant and equipment amounted to R64.7 million, largely attributable to the upgrading of facilities to maintain, improve and increase current production capabilities.
Brikor is a manufacturer of clay bricks, roof tiles and clay pipes. On 18 May 2007 Brikor was converted to a public company and listed on the Alt-X. Brikor has various manufacturing plants, mainly in Gauteng, with annual production capacities of around 270 million bricks, 40 million roof tiles, 5,400 tons of clay pipes and 70 million pavers.
ENDS