25 November 2008
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Johannesburg — BUILDING materials supplier Buildworks' share price rose 12,50% to 90c yesterday after announcing results which it said were in line with expectations.
Although full-year net profits were just double those in its half year, Buildworks will be disappointed by its second- half performance.
After disruptions from electricity shortages and extended periods of rainfall in the first half, the group had expected a much stronger second half, which is traditionally better for companies in the construction sector.
However, Buildworks had not foreseen the worsening downturn in the residential building sector, which hurt its building products division.
With the economic conditions expected to remain tough in the next 12 months, Buildworks can expect margins to remain under pressure, unless it successfully beds Consolidated Power Projects , which will expose it to the high-growth energy sector and bring in new revenue streams. Financing this deal remains a priority.
The Bottom Line is Edited By Edward West
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