Brick by brick, firm is regaining trading status
Financial results for Brikor might further fan flickers of shareholder optimism
Building supplies specialist Brikor, which has been suspended on the JSE for more than five years, is inching closer to regaining its trading status.
Brikor was suspended in 2013 after not publishing financial statements within the stipulated JSE deadline. The company also fended off a liquidation application, and has since shown dogged determination in rebuilding a viable operating base.
On Friday, Brikor issued financial results to end February 2018 that might further fan flickers of shareholder optimism, with directors hopeful about the potential that could be unlocked from the company.In the annual report, directors advised that documentation pertaining to the lifting of Brikor’s suspension had been submitted to the JSE.They added that outstanding statutory annual financial statements still required by the JSE would, on completion, be submitted.
Directors highlighted the consistent improvement in Brikor’s financial position with the last major debts outstanding being amounts owed to related parties and the South African Revenue Service.
Brikor’s revenue increased by 6,6% in its brick-manufacturing operations to R179-million and by 12% in coal extraction to R94-million.
Directors noted that with less rain in the financial year Brikor managed to produce more bricks and extract more coal.They said the company also focused on building clay stockpiles which could weather over longer periods, resulting in an increased yield of high-quality bricks.Improved operating procedures saw operating profit before interest and taxation surge 82% to R33,5-million. But headline earnings slumped 74,5% to 1,2c/share after a large tax credit banked in the 2017 financial year did not recur in the financial year under review.
Directors believed that with a lower risk profile going forward, Brikor should be in a position to gain access to financing and investment to explore growth opportunities.One worry, however, is that at year end Brikor’s current liabilities exceeded its current assets (excluding assets-held-for sale) by R5,4-million.
Directors indicated that Brikor’s total assets still exceeded its total liabilities by R59-million, adding that the disposal of certain non-core assets and operations was under way.
Assets held for sale included the Donkerhoek discontinued operations, which were sold after the financial year for R44.5-million.
Directors disclosed that R27-million had already been received from the Donkerhoek sale, and that these proceeds were used to settle part of the Brikor’s royalty tax and income tax liabilities.