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Announcement of unaudited condensed consolidated interim financial results for the period ended 31 August 2019
Afrimat Limited
('Afrimat' or 'the company' or 'the group')
(Incorporated in the Republic of South Africa)
(Registration Number: 2006/022534/06)
Share code: AFT
ISIN code: ZAE000086302
Announcement of unaudited condensed consolidated interim financial results
for the period ended 31 August 2019
CONSISTENTLY DELIVERING
Highlights
Revenue up 19,9% to R1,7 billion
Operating profit up 56,9% to R318,0 million
HEPS up 94,3% to 181,9 cents
Net debt:equity ratio improved from 35,7% to 9,4%
Interim dividend 36,0 cents per share
Return on net operating assets 32,3%
COMMENTARY
BASIS OF PREPARATION
The short-form announcement is the responsibility of the directors and is only a summary of the information
in the full announcement. The full announcement was released on SENS on 31 October 2019, and can be
found on the company's website at http://www.afrimat.co.za. Copies of the full announcement may also be
requested at the company's registered office, at no charge, during office hours and are also available for
inspection at the offices of their sponsor. Any investment decision should be based on the full announcement
released on SENS and published on the company's website.
The financial statements have been prepared under the supervision of the Chief Financial Officer, PGS de
Wit CA(SA).
INTRODUCTION
The group continues to deliver exceptional results supported by its diversification strategy as well as cost
reduction and efficiency improvement initiatives.
Improved earnings generated in all three operating segments contributed to these record results.
FINANCIAL RESULTS
External revenue increased by 19,9% from R1,4 billion (August 2018) to R1,7 billion (August 2019) and
operating profit increased by an impressive 56,9% from R202,7 million (August 2018) to R318,0 million
(August 2019), mainly due to an improvement across all three business segments, including an excellent
performance by the Bulk Commodities segment. The operating profit margin increased from 14,1%
(August 2018) to 18,5% (August 2019).
Earnings per share and headline earnings per share increased by 92,5% and 94,3% from 95,3 cents
(August 2018) to 183,5 cents (August 2019) and 93,6 cents (August 2018) to 181,9 cents per share
(August 2019), respectively.
Net asset value per share increased by 21,3% from 935 cents (August 2018) to 1 134 cents (August 2019).
Net cash from operating activities increased by 192,1% to R425,0 million, which resulted in a decrease of
the net debt:equity ratio from 35,7% in the prior reporting period to 9,4% in the current reporting period.
OPERATIONAL REVIEW
All operating units are strategically positioned to deliver excellent service to the group's customers, whilst
acting as an efficient hedge against volatile local business conditions. The product range is well diversified
to include aggregates and concrete-based products as construction materials and limestone, dolomite
and silica as industrial minerals as well as iron ore as bulk commodities.
Labour relations continued to be satisfactory during the period under review, with no labour action having
occurred. The group is committed to creating and sustaining harmonious relationships in the workplace
and addressing issues proactively.
The Bulk Commodities segment, consisting of the Demaneng iron ore mine, continued to deliver a healthy
contribution to the group results, being 28,9% of revenue. Revenue increased by 77,5% from R280,4 million
(August 2018) to R497,7 million (August 2019) and operating profit increased by 176,2% from R50,0 million
(August 2018) to R138,2 million (August 2019) as a result of an impressive increase in volumes and
favourable pricing during the period. This translated into an increase in the operating profit margin of 17,9%
(August 2018) to 27,8% (August 2019).
Industrial Minerals businesses across all regions delivered strong results with revenue increasing by 5,2%
from R284,3 million (August 2018) to R299,2 million (August 2019) and operating profit increased by a more
than satisfactory 50,4% from R41,5 million (August 2018) to R62,4 million (August 2019), which resulted in
the operating profit margin improving from 14,6% (August 2018) to 20,9% (August 2019). The strong growth
is attributable to these businesses successfully entering new markets, increasing activity, reducing costs
and implementing efficiency improvement initiatives.
After a slowdown in Construction Materials experienced in the prior period, the segment experienced a
marginal recovery with revenue and operating profit increasing by 6,1% and 6,5% to R923,0 million and
R122,2 million, respectively. The operating profit margin remained flat at 13,2% for the period. The
KwaZulu-Natal business reported improved results following a successful restructuring process in the prior
year. The Western Cape aggregates business continued to deliver solid results. The Mozambique business
continued to supply construction materials to smaller projects in the north of the country, in anticipation of
the major LNG project. The Gauteng business is still feeling the effect of the slowdown in the economy.
PROSPECTS
The group is well positioned to capitalise on its strategic initiatives. It foresees continued growth from an
excellent asset base and further expansion of its range of unique products. The continuation of selective
acquisitions is expected to deliver good results.
Operational efficiency initiatives aimed at expanding volumes, reducing costs and developing the required
skill levels across all employees remain a key focus in all operations.
Afrimat expects the current business climate to continue with the group's future growth driven by the
successful execution of its proven strategy, recent acquisitions and a wider product offering to the market.
This announcement may contain forward-looking statements that have not been reviewed nor reported on
by the company's auditors.
On behalf of the board
MW von Wielligh
Chairman
AJ van Heerden
Chief Executive Officer
Wednesday, 30 October 2019
FINANCIAL SUMMARY
Restated
Unaudited Unaudited
six months six months Audited
ended ended year ended
31 August 31 August 28 February
2019 2018 Change 2019
R'000 R'000* % R'000
Revenue* 1 719 802 1 434 850 19,9 2 966 399
Operating profit 317 993 202 669 56,9 471 152
Profit attributable
to shareholders 250 911 131 641 90,6 304 215
Earnings per ordinary
share (cents) 183,5 95,3 92,5 221,0
Diluted earnings per
ordinary share (cents) 182,0 94,8 92,0 219,5
Headline earnings per
ordinary share ('HEPS') (cents) 181,9 93,6 94,3 234,1
Diluted headline earnings
per ordinary share (cents) 180,3 93,1 93,7 232,6
Dividends per share (cents) 36,0 19,0 89,5 81,0
Net cash from normal
operating activities 425 000 145 505 192,1 410 484
Net asset value per share
('NAV') (cents)* 1 134 935 21,3 1 030
Net debt:equity ratio (%)* 9,4 35,7 (73,7) 23,8
SEGMENTAL INFORMATION
External revenue
Construction Materials 922 917 870 149 1 739 496
Industrial Minerals 299 184 284 323 544 705
Bulk Commodities* 497 701 280 378 682 198
1 719 802 1 434 850 2 966 399
Operating profit
Construction Materials 122 161 114 748 190 182
Industrial Minerals 62 368 41 477 78 012
Bulk Commodities 138 191 50 035 201 329
Services (4 727) (3 591) 1 629
317 993 202 669 471 152
Operating profit margin on
external revenue (%)
Construction Materials 13,2 13,2 10,9
Industrial Minerals 20,9 14,6 14,3
Bulk Commodities* 27,8 17,9 29,5
Overall contribution 18,5 14,1 15,9
* Comparative information for the six months ended 31 August 2018 has been reclassified/restated.
DIVIDEND DECLARATION
Notice is hereby given that an interim gross dividend, No. 25 of 36,0 cents per share, in respect of the six
months ended 31 August 2019, was declared on Wednesday, 30 October 2019.
There are 143 262 412 shares in issue at the reporting date, of which 7 685 068 are held in treasury. The
total dividend payable is R51,6 million (August 2018: R27,2 million).
The board has confirmed that the solvency and liquidity test as contemplated by the Companies Act, No.
71 of 2008, as amended, has been duly considered, applied and satisfied. This is a dividend as defined in
the Income Tax Act, 1962, and is payable from income reserves. The South African dividend tax rate is 20,0%.
The dividend payable to shareholders who are subject to dividend tax and shareholders who are exempt from
dividend tax is 28,8 cents and 36,0 cents per share, respectively. The income tax number of the company
is 9568738158.
Relevant dates to the final dividend are as follows:
Last day to trade cum dividend Tuesday, 26 November 2019
Commence trading ex dividend Wednesday, 27 November 2019
Record date Friday, 29 November 2019
Dividend payable Monday, 2 December 2019
Share certificates may not be dematerialised or rematerialised between Wednesday, 27 November 2019
and Friday, 29 November 2019, both dates inclusive.
The full announcement can be found at:
https://senspdf.jse.co.za/documents/2019/jse/isse/AFT/FY20H1.pdf
Directors
MW von Wielligh*# (Chairman)
AJ van Heerden (CEO)
PGS de Wit (CFO)
GJ Coffee*
L Dotwana*
PRE Tsukudu*#
JF van der Merwe*#
HJE van Wyk*#
JHP van der Merwe*#
HN Pool*#
FM Louw*#
* Non-executive director
# Independent
Registered office
Tyger Valley Office Park No. 2
Corner Willie van Schoor Avenue and Old Oak Road
Tyger Valley
7530
(PO Box 5278, Tyger Valley, 7536)
Sponsor
Bridge Capital Advisors Proprietary Limited
50 Smits Road
Dunkeld
2196
(PO Box 651010, Benmore, 2010)
Auditor
PricewaterhouseCoopers Inc. PWC Building - Capital Place
15 - 21 Neutron Avenue
Technopark
Stellenbosch
7600
(PO Box 57, Stellenbosch, 7600)
Transfer secretaries
Computershare Investor Services Proprietary Limited
Rosebank Towers
15 Biermann Avenue
Rosebank
2196
(PO Box 61051, Marshalltown, 2107)
Company Secretary
M Swart
Tyger Valley Office Park No. 2
Corner Willie van Schoor Avenue and Old Oak Road
Tyger Valley
7530
(PO Box 5278, Tyger Valley, 7536)
http://www.afrimat.co.za
Date: 31/10/2019 07:05:00
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