Willdale spurred by firm brick demand

HARARE - Listed brick-making company, Willdale Limited (Willdale), says demand for bricks has remained firm, despite the tight liquidity conditions currently being experienced in the country, with high levels of individual sales surging.

Willdale chairman, Alex Jongwe, said the group recorded a 50 percent surge in volumes in the six months to March 2015, spurred by huge demand.

“Despite the challenges, the company managed to increase production, sales volumes and profitability. Revenue increased by 34 percent over the prior period to $4,4 million driven by a 50 percent increase in volumes,” he said.

The Willdale boss said demand for bricks particularly from individual home developers was firm, adding that with sufficient production capacity, the group was now able to meet demand.

Jongwe, however said revenue failed to increase at the same rate as volumes due to lower prices and changes in the product mix.

“A gross margin of 29 percent compared to four percent in 2014, was achieved for the period as cost management initiatives started bearing fruit,” he said.

An operating profit of $468 164 was recorded on the back of a loss in the prior period of $494,262 after charging $447,257 in depreciation of property, plant and equipment.

Financing costs, which include costs of preference shares, increased by 53 percent to $347,944 compared to the $227,861 recorded prior comparative period.

“Extrusion went up by 18 percent compared to the prior year following a number of initiatives that resulted in increased throughput.

“However, the late heavy rains affected growth in burnt production resulting in only a modest 6 percent growth in output,” he said, adding that the rains also affected clay mining during the same period.

Jongwe said repair work had been done on the plant during the shutdown period which is anticipated to result in reduced downtime to year end.

The group last year raised $3,2 million through a rights offer in the form of semi-annual redeemable convertible cumulative preference shares, with the proceeds of the Old Mutual-underwritten transaction going towards capital expenditure, plant refurbishment, spares and consumables and working capital requirements.


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