Photo by: Duane Daws
JSE-listed Afrimat’s effort to turn the performance of its latest acquisition around was starting to gain traction as the 59.78%-owned division reported higher earnings for the interim period to August 31.
The construction materials supplier, which took control of resources group Infrasors on March 1, planned to, over the next two to three years, optimise and turn around the underperforming unit, in what CEO Andries van Heerden said would be the company’s most challenging turnaround project to date.
The Afrimat team had started work on, besides others, Infrasors’ operational efficiencies, marketing, product pricing, financial performance and shifting the culture of the new addition to one of teamwork.
JSE-listed Infrasors, in the first set of financial results since the majority takeover, reported that profit for the period rose to R538-million, including the costs of impairment to assets amounting to R5.3-million, during the six months to August, up from the restated R322-million in the prior comparative period.
Basic earnings a share for the period under review remained at 0.1c, while headline earnings a share were 2.8c, against the restated 0c a share recorded for the interim period the year before.
Infrasors boosted revenue by 11.8%, from R147.2-million during the first half of 2012, to R164.59-million in the first half of 2013.
The contribution from operations during the six months to August increased 190.2% to R9.9-million, while cash generated from operating activities decreased from R19.6-million during the comparative prior period, to R5.5-million in the half-year to August, on the back of increased working capital of R13.5-million.
The reduction of plant and equipment additions led to lower cash outflow from investing activities, which fell to R3.9-million during the six-month period to August, from R23.3-million in the interim period the year before.
The group expected to benefit from current initiatives, such as expanding volumes, reducing costs, improving efficiencies and developing employees’ skill levels, and its renewed focus on marketing.
Infrasors’ mining interests include the Lyttelton Centurion dolomite mine, the Marble Hall limestone mine and the Delf alluvial silica sand operation, and complemented Afrimat’s 2011 acquisition of Glen Douglas.
Until the group's debt-to-equity ratio reach a “level acceptable to its financiers”, Infrasors again decided against declaring a dividend for the half-year to August.