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WILLDALE Limited’s revenue for the six months to March rose 89 percent, driven by an increase in volumes, the brick-making company said in a statement yesterday.
Revenue for the period increased to $3,3 million on the back of a 24 percent increase in volumes.
The average price per 1 000 bricks declined by 12 percent due to pressures on prices from the market and a sales mix skewed in favour of the low margin common bricks.
A gross margin of 4 percent was earned but this could not absorb all overhead costs, resulting in an operating loss of $500 000. Net finance costs were maintained at the same level as the prior period at $230 000.
The company reported a net loss of $606 000, slightly below $613 000 realised in the same period last year.
Total assets were up 3 percent to $26,5 million due to increases in cash and cash equivalents.
Equity was negatively impacted by the interim losses and was down 4 percent to $13,3 million.
The cash position of the company was boosted by the capital injection amounting to $3,3 million.
Willdale said recapitalisation of the firm has provided sufficient capacity to meet demand.
“Although the first half of the year was characterised by high downtime caused by shortages of working capital, breakdowns in fixed and mobile plant, inadequate mobile equipment, rains and ZESA power outages, the bulk of the funding raised has been invested to reduce the downtime,” said Willdale.
“This will result in an increase in production and reduced cost of production.
Furthermore, an additional amount of approximately $8 million will be required to recapitalise the company, post the rights issue.
In its rights offer, the group raised $3,2 million.
The funding obtained from the rights issue has enabled an early ramping up of production with the monthly production targets now being achieved.
Additional capital will enable the company to refurbish its plant and acquire mobile equipment.
The demand for quality bricks remains firm and Willdale is well poised to regain market share.
Online Reporter