Willdale Limited, the country’s largest brick manufacturer, bounced back to profitability in the year ending September 30, 2018, a trading period that was characterised by foreign currency shortages and government policy changes.
The company’s chairman Cleophas Makoni said projections in the housing development, schools construction and university expansion and government infrastructure will drive sales into the foreseeable future.
In the just ended trading year, the company’s revenue rose 38% to $13,4 million compared to $9,7 million in 2017 backed by a 3% increase in volumes and a 34% surge in average prices. Operating profit was $2,2 million during the year under review compared to $0,6 million in the year before after charging $1 mln for depreciation, the same amount that was also charged in 2017. Total comprehensive profit for the year was $1,1 mln in 2018 compared to $0,3 mln in 2017.
Net Cash flows generated from operations increased to $2,2 million compared to $1,1 million in the prior year while capital expenditure for the year amounted $0,6 million, which financed from operations.
The brick making firm owns over 514 hectares of land near its factory in Mount Hampden, in the outskirts of Harare along Lomagundi Road. In 2017, shareholders approved the sale of a piece of land for $11,2 million whose soil samples did not contain the requisite clay soils suitable for brick manufacturing. The sale was completed on November 19 2018.
These proceeds will be partly used to pay off all interest bearing debt including the capital amount on preference shares of $3,25 million and accumulated dividends which had amounted to $1,45 million as at November 22, 2018.Total assets for the group increased 7, 67% to $30.4 million from $28,2 million previously.
Makoni said annual extrusion rose 9% than the previous year as brick losses were contained to below 2017 levels backed by improved production efficiency.
“Productivity improvement is dependent upon timely and efficient sourcing of raw materials, good plant availability and utilisation,” he said.
Willdale’s performance since the dollarisation of the economy in 2009 has been adversely affected by inadequate capitalisation that resulted in low production volumes, high cost of production and loss of business to emerging competition.
“Production capacity is available to meet demand but its exploitation is dependent on the availability of fuel and foreign currency for plant spares.”
The continued shortage of foreign currency in the country is making it difficult for industries to procure imports. Willdale did not declare a dividend for the period in order to preserve cash for operations.