JSE-listed Brikor increases profits markedly during Covid-19

Posted On Monday, 31 May 2021 11:59 Published by
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Despite Covid-19, the lockdown and unusually high levels of rainfall in the last quarter of year ended 28 February 2021, manufacturer and supplier of bricks, Brikor Limited (JSE: BIK) substantially increased profit after taxation to R12,0 million (2020: 1,5 million) and gross profit to R65 million (2020: R62,5 million).

Garnett_Parkin

The group generated positive cash flows from operations as a result of phasing in production, savings in variable costs during levels 4 and 5 of the lockdown, as well as strict cost-saving initiatives.

Says Garnett Parkin, Brikor CEO, “From August till December 2020 revenues were the highest we have seen in the last five years. Brikor is a particularly resilient business and this is illustrated by the fact that the business produced such remarkable results during the pandemic. We had stock on hand before the lockdown and this had a positive effect after the hard lockdown was lifted.  We are on the lookout for expansion opportunities after acquiring a 40% shareholding in Zingaro Holdings in March this year, which provides multi-product road transportation services for bulk commodities. ”

Revenue decreased to R257,9 million (2020: R292,7 million) as a direct result of the bricks segment being closed until the end of April 2020, whilst the group’s coal mining operation, Ilangabi Investments 12 (Pty) Ltd, was able to continue operations at 50% capacity during the initial lockdown. 

Cash and cash equivalents (net of bank overdraft) increased significantly to R15,3 million (2020: R4,0 million). The increase was mainly attributable to the group having had sufficient stock available when Brikor was able to return to operations on 1 May 2020. 

The high levels of rainfall also had a direct impact on sales volumes during January 2021 and February 2021. Gross profit increased to 25,2% for the year ended 28 February 2021 (2020:21,4%), mainly as a result of cost savings and improved efficiencies in both the coal and bricks segments.

The increase in profit for the reporting period was mainly due to strict cost savings as well as a section 43 closure certificate for one of the group’s rehabilitation sites. As a direct result of the closure certificate, the gross closure cost of R8 million relating to the environmental rehabilitation provision, has resulted in a credit to the statement of profit or loss.

The decision to phase in production also resulted in savings on variable costs, specifically during levels 5 and 4 of the lockdown.

No dividends have been declared for the year ended 28 February 2021 or 29 February 2020.

 

28-Feb-21

29-Feb-20

 
 

R'm

R'm

% change

Revenue

257,9

292,7

-11,9

Basic earnings per share (cents)

1,9

0,2

850

Headline earnings per share (cents)

2,1

0,1

2000

Last modified on Tuesday, 01 June 2021 12:13

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