The gross profit margin declined from 24 percent to 18 percent, due to a change in the revenue mix, as the lower margin construction division contributed more. Administration overheads totalled 15 percent of turnover against a budget of 14 percent. Retrenchment and restructuring costs amounted to 4 percent of total overheads as the group continues to focus on cost rationalisation.
The profit from continuing activities amounted to $1.1 million and after a slight loss from discontinued activities, the Profit After Tax totalled $1,1 million, registering a 3 percent margin against a 4 percent budget (FY 2012- targeting 7 percent).
The cashflow statement shows US$504,591 generated from operating activities whilst there was a US$1,5 million spend on capital expenditure which resulted in a negative closing position of US$124,259.
On the operations, the contracting division's revenue for FY 2011 was US$20 million, with 77 percent coming through from buildings and 22 percent from civils as low business activity characterised the mining sector. The division completed four good quality projects during the year.
Proplastics’s recorded a strong performance in the second half compared to the below par performance for the first half. Volume traded for the year was 4,968 tonnes up 40 percent from the previous year. US$2,3 million was invested in factory equipment and all the equipment was commissioned in July 2011. Production and operational efficiencies are expected to improve, with the use of the new equipment.
On the outlook, the construction unit has a US$30 million confirmed order booked for 2012, although the projects are mainly short term and should be completed by June 2012.
Tendering activity is, however, very high for mining and government projects and the success rate is good at about 50 percent. Management noted that they are currently operating at 25 percent of the unit’s peak year turnover equivalent of US$90.8 million in current monetary terms.Post published in: Business