On the back of anticipated improved market conditions in the 2014 financial year, construction materials supplier WG Wearne would invest R700 000 in new product lines in its concrete manufacturing products division.
The firm indicated that the additional product lines would expand its product offering and enhance its competitiveness in the concrete pipe market.
Despite few tenders being issued by the Limpopo Roads Agency during the 2013 financial year, which negatively affected the concrete pipes and culverts market in the province, WG Wearne reported that its concrete manufactured products division performed well, incurring profit before interest and tax of R589 000, up from a loss of R2.47-million the year before.
This was owing to greater plant efficiencies, which improved profitability on slightly lower turnover.
The group’s prospects continued to improve as its turnaround strategy continued to bear fruit. Its readymix concrete division showed good growth, as turnover increased by more than 60%, while margins were maintained.
The aggregates business managed to increase its turnover by 18%, while margins came under pressure owing to higher energy costs and a lower average selling price. However, WG Wearne noted that the outlook for the business remained positive as government’s infrastructure roll-out started to materialise.
The group’s contracting business was boosted by a R32-million contract post year-end by Abeinsa EPC.
Meanwhile, the demand for road-building material and railway ballast started to increase towards the end of the 2013 financial year.
WG Wearne stated that the continuing market improvements, as well as further initiatives to reduce operating costs should see the company returning to profitability for the February 2014 year-end.
The group’s revenue increased by 31% to R400-million during the year, up from R305-million in 2012, while WG Wearne attributed the increase in turnover to its ready-mix concrete division where turnover increased by 62% to R191-million, from R118-million the prior year.
The company’s earnings before interest, tax, depreciation and amortisation improved to R41.2-million in the current year from R20.3-million in 2012.
On the back of an improved overall performance, the firm’s headline loss a share improved to 6.15c, compared with 19.88c in the previous year.
The group’s cash flow forecast for the 2014 financial year reflected a cumulative cash surplus.