South African building and construction materials supplier Afrimat on Tuesday reported a 20.4 percent increase in headline earnings per share to 70.4 cents for the year ended February from 58.4 cents a year ago.

A final dividend of 16 cents per share was declared.

Headline earnings increased by 79 percent to R92.5-million. Revenue was 75.2 percent higher at R611.7-million, while operating profit grew 96.5 percent to R137.1-million.

The group said operating margins of 22.4 percent reflect the particularly strong performance of the Aggregates and Concrete Manufactured Products divisions.

The Malans Quarries and Scottburgh acquisitions were included for nine and eight months respectively, from the dates of conclusion of the respective acquisitions following delays in obtaining Competition Commission approval.

Lancaster Group has been included in the results for the full 12 months.

The group said its three divisions performed well.

Aggregates delivered operating profit in line with expectations, driven by strong demand for its products and higher value products in its sales mix. The division accordingly experienced increased sales volumes at improved pricing.

Ready Mix Concrete was impacted in the first half by intensifying price competition in the Western Cape and unusually severe winter conditions which impeded growth in the supply of products in the region. Performance in the second half improved substantially in line with higher demand and favourable weather conditions.

Concrete Manufactured Products benefited significantly from increased public and private sector expenditure on low cost housing developments nationwide. Capacity expansion at Afrimat's Ladysmith plant is now fully operational and robust demand for the division's products continues unabated.

During the year Afrimat commissioned new quarries in Kommetjie and Saldanha Bay in the Western Cape and replaced an existing quarry in Paarl, in respect of which the lease had expired, with another quarry in the same area. In addition a non-profitable quarry in Oudtshoorn was closed.

Constrained cement supply in KwaZulu-Natal and the Free State during the first three months of the year has now been alleviated by the commissioning of new capacity at Natal Portland Cement. Full and adequate supply was achieved in the second quarter of the year and is expected to be sustainable.

Looking ahead the group said the government and private sector's commitment to infrastructure investment continues to drive significant industry growth, stimulating ongoing strong demand for Afrimat's products.

Solid operational infrastructure, further strengthened by recent capacity expansions at strategic sites and flexibility offered by the group's mobile crushing fleet position Afrimat to entrench its status as a leading supplier of construction materials across the country and to sustain growth.

Earnings for the year ending February 2009 are expected to reflect the positive impact of increasing demand, the inclusion for the full 12 months of the acquisitions and expansion into the Gauteng and northern regions, it concluded.

I-Net Bridge