Listed brick maker, Willdale Limited is banking on the anticipated boom in the construction industry for improved earnings in the 2018 financial year.
This comers after the group reported a 26 percent jump in revenue to $9,7 million in the year to September 30, 2017, as sales volumes were 23 percent above prior year due to surging demand driven by individual home developers, cluster home developments and schools.
Chairman Alex Jongwe said these sectors coupled with the mega construction programmes at state universities and tertiary institutions are expected to keep Willdale’s order book full.
Government is working on a programme to develop student and staff accommodation facilities in tertiary institutions as part of efforts to ease the accommodation problems following the ballooning student population of recent.
The programme also targets to narrow other infrastructure deficiencies in the tertiary institutions, such as sporting and recreational facilities.
“These sectors are expected to drive sales into the foreseeable future together with student accommodation at tertiary institutions and proposed universities and shopping malls.
“We are encouraged by the optimism in the construction industry that is driven by the hunger for housing, institutional and infrastructure development which we anticipate to continue in the near future. Demand for bricks for these projects will keep our order book full.
“Superior product and service quality will continue to support the brand as we push to consolidate our position as a preferred brick supplier in the market,” said Jongwe.
As investors channel their funds towards the property sector as a hedge against inflation, Willdale management remains upbeat this will work to the firm’s advantage.
Jongwe said the brick makers will continue to focus on initiatives that grow margins while efforts will also be made to look for alternative ways to source imported spares to support plant capacity as the year was characterized by foreign currency shortages that affected the importation of critical plant spares.
During the year to September 2017, capacity utilisation averaged 60 percent compared to 55 percent in the prior year.
Green and fired production volumes increased by 30 percent and 58 percent respectively despite the delayed start.
The heavy rains affected work in clamp kilns resulting in significant brick losses in the second quarter of the year.
“Measures have been taken to minimize such losses in future and improve plant availability in the next production season,” Jongwe said.