Johannesburg — BUILDWORKS, a supplier of heavy building materials to the construction industry, said yesterday its strategic positioning in the provision of infrastructure to the African power market provided it with a "fairly" robust buffer against the volatility of the market place.

CEO Raoul Gamsu said the imbalance of substantially higher demand levels for power generation and transmission against the supply in Africa would remain for decades. But he warned that the constraints to growth remained due to funding capacity for projects and shortage of skills to execute the projects.

In order to benefit from the potential African power and electricity development activity, Gamsu said the group's newly acquired high voltage power, electrical substation and overhead cables division, Consolidated Power Projects (Conco), would strengthen its skills base by investing in additional senior management capacity, business development and project execution skills.

"This is an investment which may cost in the short term but is expected to yield long-term sustainable growth," he said. The Conco order book continued to sustain its level at R1,2bn, and Gamsu said he was hopeful that as capital markets eased funding for utilities, municipalities, mines and industries would expand.

The group posted a 488% increase in revenue to R1,184bn for the year ended August, thanks to the R498m Conco acquisition it concluded last year. The group, which has transformed itself into the largest turnkey developer of electrical substations in sub-Saharan Africa, now has more than 86% of its annualised revenue and 81% of earnings before interest, taxation, depreciation and amortisation directly attributable to the power and electrification sector.

But it was not all smooth sailing, with headline earnings per share coming in at 7,14c and basic earnings per share down to 5,24c, which was a decline of 35% and 52% respectively over the previous year.

Gamsu attributed the decline in headline earnings per share to the amortisation charge raised against the intangible assets, increased number of shares in issue, and the underperformance of West End Claybrick -- the group's building materials division. However, cash generated from operations was strong, at R190m, and, coupled with stringent working capital management, the group ended the year with cash on hand of R219m.

The building material division had a tough year with revenue of R162m representing a decline of 19% over the previous year.