Listed in the construction and building materials sector of the JSE, Afrimat’s main operations are in mid-tier open-pit mining and quarrying. So while many of the traditional building and construction players in SA are struggling due to lack of work, Afrimat has managed to maintain an enviable five-year compound annual growth rate in earnings of about 17%, crediting its wide diversification strategy and agility. However, headline earnings per share for the full year to February 2018 were 8% lower than last year’s. On a 10% rise in group revenue, operating profit fell 14%, due mainly to a 13% increase in operating expenses. At the pretax level, profits fell by 20%, but a significantly reduced tax rate of 24% compared with 31% the previous year resulted in attributable profits falling by a lesser 12%. The main reason for Afrimat’s poor performance in comparison with its historical trend is the recent acquisition of the Diro iron ore mine at Demaneng in the Northern Cape. Not only did ...

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