Manufacturer and supplier of bricks, Brikor Limited, has substantially increased its profit after taxation to R12 million (2020: R1.5 million) and gross profit to R65 million (2020: R62.5 million).
In the group’s financial results for the year ended 28th February 2021, it reported generating positive cash flows from operations due to phasing in production savings in variable costs during levels 4 and 5 of the national lockdowns, as well as strict cost-saving initiatives.
“From August to December 2020, revenues were the highest we have seen in the last five years”, comments Garnett Parkin, Brikor CEO.
“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 million). The increase was mainly attributable to the group having had sufficient stock available when Brikor was able to return to operations on the 1st of May 2020.
The high levels of rainfall also had a direct impact on sales volumes during January and February 2021. Gross profit increased to 25,2% for the year ended 28 February 2021 (2020:21,4%), mainly because 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 lockdowns.
No dividends have been declared for the years ended 29th February 2020 or 28th February 2021.