Willdale revenue up 3pc

HARARE - Bricks manufacturer Willdale Limited (Willdale)’s revenue went up three percent to $7 million in the year to September 2014 from $6,8 million realised prior year.

Alexander Jongwe, the group’s chairman, said sales volumes were seven percent up on the prior year, but average prices declined by four percent due to a product mix that favoured low margin common bricks.

However, operating losses increased to $631 400 from $428 292 on the back of a $700 000 charge on depreciation of property, plant, equipment and an incurred $300 000 in non-recurring expenses.

Jongwe noted that capital expenditure for the period under review amounted to $1,7 million and was applied towards the purchase of critical mobile equipment, refurbishment of plant and for working capital mainly financed from proceeds of the rights issue.

This comes as Willdale in June this year put efforts to raise $3,2 million in a rights offer which saw 10 percent semi-annual redeemable cumulative preference shares being snapped up at a subscription price of a $1,00 each.

The company sought capital to restructure its balance sheet and finance the acquisition of equipment to consolidate its brick manufacturing operations.

Old Mutual Life Assurance Company Zimbabwe underwrote the rights issue.

“Proceeds from the rights issue were received in the third quarter. Various initiatives undertaken after the rights issue have resulted in a reduction in the production cost and improved margins,” said Jongwe.

He added that the impact of the rights issue funds will be felt in full in the coming year.

The utilisation of funds from the rights offer resulted in a significant increase in capacity utilisation to about 60 percent post the recapitalisation figure of 53 percent.

“Consequently, green and burnt production volumes increased by 28 percent and 35 percent respectively over the prior year,” said Jongwe.

He added that the company would strive to maintain high production volumes in order to minimise unit production costs and improve competitiveness adding that a number of cost cutting measures are underway that aim to reduce fixed costs and align the overall cost to regional benchmarks.

Despite the company issuing out quotations for several building projects from corporates, government departments and individuals, the conversion rate to sales was low due to the liquidity crunch prevailing in the economy.

“We are pursuing our strategic thrust to become the lowest cost producer which should improve our competitiveness and ensure growth in market share and volumes,” adding that the company will continue to invest resources into improving our quality to world class standards.

Comments (2)

Has Joice Mujuru still got interests in this "enterprise"?

Angel Munyeriwa - 2 January 2015

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