HomeBusiness DigestWilldale growth prospects remain firm

Willdale growth prospects remain firm

Conrad Dube

WILLDALE Ltd has managed to redeem itself from losses made in previous years, signalling that growth prospects remain firm for the brick-making company.

na, Arial, Helvetica, sans-serif”>Willdale turned around from a loss of $30 million previously to a profit after tax of $154 million in its historical results for the three months ended December 31 2002.

The company said its capital restructuring exercise had been successfully completed, the debt issue resolved, while demand for its products had increased.

Willdale said this reflected an appreciable increase in volumes sold.

“The current housing construction recovery will have significant impact on turnover and profitability, but lack of activity in the commercial and industrial construction sectors remains a concern for the company,” said chief executive officer Luke Akino at a prelisting analysts’ briefing.

Analysts said gains realised from the residential construction market would outweigh inactivity in the commercial and industrial sectors to help Willdale record impressive six months to March 31 results.

Willdale operates from the Teneriffe site, on which there are four factories – Amac, TN60, TN90 and the new Face Brick factory TN75.

Total production capacity is 130 million bricks per annum.

The new TN75 factory has all-weather operating capability, allowing the production of bricks throughout the year.

The remaining factories operate during the dry weather months.

The company said known clay reserves at the Teneriffe site were estimated to be sufficient for 25 years at full production.

Willdale listed on the Zimbabwe Stock Exchange (ZSE) on March 14 this year on full order book valued at $1 billion translating to 52% of the forecast turnover of about $2 billion for the 12 months to September 30 2003.

In the three months to December 31 2002, Willdale reported turnover of $545 million, compared to $149 million for the same period the previous year, on the back of increased volume sales.

“Improved operating efficiencies resulted in a bottom line profit of $154 million compared to a loss of $30 million for the corresponding period the previous year,” said Akino in a statement accompanying the results.

“Willdale is a counter which one can confidently secure for future profits because people will continue to build and demand for the company’s products is likely to increase with the availability of cement. The company has shown its resilience to the economic meltdown currently prevailing by successfully completing its turnaround process from a loss-making position to profitability,” said an investment analyst.

The analyst said considering that the company had all-weather operating capability under the new TN75 factory and known clay reserves at the Teneriffe site estimated to be sufficient for 25 years, the market could be assured of brick production throughout the year.

“At a price between $4 and $4,20 the share appears cheap going forward,” he said.

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