Bheki Mpofu
26 August 2009
Johannesburg — SPECIALISED construction products supplier ABE Construction Chemicals yesterday posted modest growth in headline earnings per share for the year to May, despite the economic downturn.
The company, which listed on the Alt- X two years ago, defied the downturn in the building industry to report headline earnings per share growth of 19% to 25c, while turnover also rose 19% to R263m as sales across all divisions maintained positive growth.
The company's products are used in residential, commercial, industrial and infrastructure construction both in the new construction and building maintenance industry. It reported a 22% rise in operating profit to R35,6m, underpinned largely by continued growth in sales to the construction sector. The construction division, which accounted for 55% of total group sales, increased sales 22% to reach R150m for the first time largely as infrastructure spend continued unabated.
Sales in the export division grew 19% in spite of declining markets in sub-Sahara Africa. Sales in the re-sellers division, which contributed 35% to group turnover, rose 15% in spite of tough conditions in the building material supply industry.
"Consolidation of the national chain stores continued unabated and the strategy of focusing on these key accounts, along with emphasis on brand and product mix, were key to our success," the company said yesterday. ABE's trading margins increased slightly to 41,2% from 40,3% in the previous year, while gross margins declined to 38,1% from 38,5% due to transport costs.
The company said it had managed to beat its pre-listing forecast despite the global economic turmoil.
"We are, however, pleased to be able to report that in spite of this ABE succeeded in the delivery of the results envisaged in the prospectus and has continued its history of sustained growth. Because of its wide range of specialist construction products ABE was able to take advantage of the opportunities that the construction and building maintenance industry had to offer in the past financial year," the company said.
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