Diaspora drives residential construction boom

Business Writer

ELECTRICAL hardware and building products supplier, Powerspeed Electrical, says there is a housing construction boom countrywide and most of the property developers are people in the diaspora hence there is a high demand for building materials.

The country is experiencing a boom in housing construction that is being funded mostly by people in the diaspora and as such there is a high demand for building materials.

The demand for building materials is seen as a positive signal of economic growth and a confidence booster.

In its interim consolidated financial statements for the six months ended 31 March 2023, Powerspeed Electrical said it expects the trend to continue.

“Strong funds flow from the diaspora is driving a boom in residential construction throughout the country, which is, in turn, driving demand for building materials.

We have substantially improved our ability to service this market and we expect continued growth from this source,” reads part of the report.

However, the company noted that demand for cheaper, lower-quality products was threatening to erode margins.
“A continued focus on ensuring maximum product availability and increased product range and choice has, once again, ensured an increase in volume.

The market, however, is not growing and there is significant competitive pressure on pricing as well as growing consumer demand for cheaper, lower quality products, which is driving margins lower.

This problem is exacerbated by the growing informal trade in our market segment,” it said.

During the period under review, revenue grew from $7,13 billion to $42,1 billion while gross margin rose from $1,68 million to $7,22 billion.

Operating expenses rose from $1,18 billion to $5,36 billion giving an operating profit of $1,86 billion up from the previous $650 million. Profit after tax rose from $416 million to $1,15 billion.

The company noted a significant growth in shareholder equity, which rose from $8,2 billion to $12,3 billion during the six months. In real terms, the growth in equity value per share was approximately 9,87 percent.