Wrap Text
Announcement of audited summary consolidated financial statements for the period ended 29 February 2020
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 audited summary consolidated financial statements
for the period ended 29 February 2020
Highlights
Revenue up 11,4% to R3,3 billion
Operating profit up 27,5% to R601,0 million
HEPS up 48,5% to 347,7 cents
Net debt:equity ratio improved from 23,8% to 8,2%
Return on net operating assets 30,9%
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 and does not contain full or complete details. The full announcement was released
on SENS on 21 May 2020, 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 is also available for inspection at the offices of the sponsor. Any investment decision should be
based on consideration of the full announcement published on SENS and the Company's website.
The financial statements have been prepared under the supervision of the Chief Financial Officer, PGS de
Wit CA(SA).
While the short-form announcement itself is not audited or reviewed, the full announcement of which this
announcement is a summary, has been independently audited by the Company's auditor,
PricewaterhouseCoopers Inc. Their unmodified audit opinion is available for inspection at the Company's
registered office.
INTRODUCTION
The Group delivered exceptional results supported by its diversification strategy, 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 11,4% from R3,0 billion to R3,3 billion and operating profit increased by an
impressive 27,5% from R471,2 million to R601,0 million, principally due to an improvement across all three
business segments, including an excellent performance by the Bulk Commodities segment.
Headline earnings per share grew by 48,5% from 234,1 cents per share to 347,7 cents per share.
Net cash from operating activities increased by 64,9% to R676,8 million, which resulted in an improvement
of the net debt:equity ratio from 23,8% in the prior year to 8,2% in the current year. Goodwill in SA Block
Proprietary Limited to the amount of R10,2 million was impaired during the year.
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 to support Construction Materials and limestone,
dolomite and silica making up Industrial Minerals as well as iron ore as Bulk Commodities.
Good labour relations continued during the year under review, with no labour action having occurred. The
Group remains committed to creating and sustaining harmonious relationships in the workplace and
addressing issues proactively. Furthermore, staff development, training and education remain high on the
Afrimat human capital agenda.
The Bulk Commodities segment, consisting of the Demaneng iron ore mine, delivered an exceptional
contribution to the Group results, being 31,4% of revenue. The operating profit of this segment increased
by 59,8% from R201,3 million to R321,7 million, as a result of an impressive increase in volumes and
favourable pricing across the year. The operating margin improved from 29,5% to 31,0%.
Industrial Minerals businesses across all operating regions delivered strong results, with the segment's
operating profit increasing by 22,5% from R78,0 million to R95,6 million and an operating profit margin
improvement from 14,3% to 17,3%. The strong growth is attributable to these businesses successfully
entering new markets, increasing volumes, reducing costs and implementing efficiency improvements.
After a slowdown in Construction Materials in the prior year, the segment delivered a marginal recovery with
operating profit increasing by 1,2% to R192,4 million. The operating margin improved slightly from 10,9%
to 11,2% for the year. The KwaZulu-Natal business reported improved results following a successful
restructuring process during the prior year. The Western Cape aggregates business continued to deliver
solid results. In Mozambique, the business continues to supply construction materials to projects in the
north of the country, in the ramp-up to the major LNG project. The Gauteng business continues to bear the
brunt of a slowdown in the economy.
BUSINESS DEVELOPMENT
New business development remains a key component of the Group's growth strategy. The dedicated
business development team continues to successfully identify and pursue opportunities in existing markets,
as well as in anticipated new high growth areas in southern Africa.
PROSPECTS
Afrimat entered the Covid-19 lockdown with a very strong balance sheet, positioning it strongly for the
uncertain and volatile business climate which is expected to continue for the immediate future. The Group
is, however, well positioned to capitalise on strategic initiatives and future opportunities, such as
government's infrastructure programmes which is expected as post Covid-19 economic stimulus
initiatives. The Group's future growth will still be driven by the successful execution of its proven strategy,
recent acquisitions and a wider product offering to the market, whilst continuing to prudently manage
cash flow and ensuring debt remains at low levels.
Operational efficiency initiatives aimed at expanding volumes, reducing costs and developing the required
skill levels across all employees, remains a key focus in all operations.
These financial statements may contain forward-looking statements that have not been reviewed nor
reported on by the Company's auditors.
On behalf of the
MW von Wielligh
Chairman
AJ van Heerden
Chief Executive Officer
Wednesday, 20 May 2020
Dividend declaration
Given the uncertainty on the actual impact of the Covid-19 pandemic on the world, the South African
economy and in turn Afrimat, the Board decided to postpone the decision regarding the declaration of a
final dividend until further notice. This supports Afrimat's general conservative nature and ensures the
further preservation of cash should it be required in the coming quarter due to the uncertain nature of the
current economic climate and commitments previously entered into.
Financial summary*
Audited Audited
year ended year ended
29 February 28 February
2020 2019 Change
R'000 R'000 %
Revenue 3 304 376 2 966 399 11,4
Operating profit 600 952 471 152 27,5
Profit attributable to shareholders 465 176 304 215 52,9
Earnings per ordinary share (cents) 341,6 221,0 54,6
Diluted earnings per ordinary
share (cents) 337,7 219,5 53,8
Headline earnings per ordinary
share ('HEPS') (cents) 347,7 234,1 48,5
Diluted HEPS (cents) 343,6 232,6 47,7
Dividends per share (cents)** 36,0 81,0 (55,6)
Net cash from operating activities 676 810 410 484 64,9
Net asset value per share ('NAV') (cents) 1 246 1 030 21,0
Net debt:equity ratio (%) 8,2 23,8 (65,5)
SEGMENTAL INFORMATION
External revenue
Construction Materials 1 714 180 1 739 496
Industrial Minerals 552 683 544 705
Bulk Commodities 1 037 513 682 198
3 304 376 2 966 399
Operating profit
Construction Materials 192 438 190 182
Industrial Minerals 95 568 78 012
Bulk Commodities 321 665 201 329
Services (8 719) 1 629
600 952 471 152
Operating profit margin on external
revenue (%)
Construction Materials 11,2 10,9
Industrial Minerals 17,3 14,3
Bulk Commodities 31,0 29,5
Overall contribution 18,2 15,9
* This information has not been audited or reviewed, but is extracted from audited/reviewed financial
statements/reports.
** The Board decided to postpone the decision regarding the declaration of a final dividend until
further notice.
The full announcement can be found at:
https://senspdf.jse.co.za/documents/2020/jse/isse/AFT/FY20H2.pdf
Directors
MW von Wielligh*# (Chairman)
AJ van Heerden (CEO)
PGS de Wit (CFO)
C Ramukhubathi
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
C Burger
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: 21-05-2020 07:05:00
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