Shares in Brikor rally 18% to 13c after the group reported a return to profitability for the year ended February.
Shares in Brikor‚ an AltX listed manufacturer and supplier of building and construction materials‚ rallied 18% to 13c on Wednesday after the group reported a return to profitability for the year ended February.
The group’s revenue increased 66% over the year to R223.8m‚ while gross profit grew 64% to R67.9m. Diluted headline earnings per share from continuing operations were 2.0c compared to a 2.3c loss previously. “The group’s margins improved substantially in a competitive trading environment through effective cost management initiatives and a concerted effort on sustainable working capital management‚” Brikor said.
The group said its focus “returned to core operations” while its coal operations were successfully commissioned.
The substantial growth in revenue was attributed to the addition of coal sales to the group‚ along with increased sales in the group’s aggregate division.
“Gross profit percentage improved visibly as a result of cost management and high margins achieved in the coal and aggregate divisions‚ increased volumes in the aggregate division and an improvement in yields in the brick division.”
Brikor’s Donkerhoek operation produces aggregates of a wide variety of sizes and technical specifications with products including stone‚ gravel and sand for both large- and small-scale civil engineering and infrastructure projects.
The group said improvements in the Donkerhoek production process “resulted in better yields and volumes achieved and consequentially the securing of tenders‚ which were previously unattainable”.
The commencement of supply on these projects contributed substantially to the profits achieved for the year.
The group’s brick division sales improved marginally due to higher average sales prices attained. “The effect of an increase in production volumes is expected to show returns in the next reporting period.”
Meanwhile‚ Brikor successfully commissioned the coal operations at Vlakfontein‚ giving it access to clay and coal deposits. “The mining of coal has shown considerable returns and assisted with the increase in turnover and margins during the reporting year.”
Brikor said it was benefiting from a “gradual improvement” in market conditions and said it had positioned itself accordingly to generate maximum benefits from trading condition improvements.
“Assuming that current market and economic conditions will not deteriorate‚ Brikor is expecting continuing improved results in the next financial year.” No dividend was declared for the year.