Listed brick maker Willdale has issued a cautionary statement advising their shareholders that the firm has abandoned its intended to dispose of certain idle assets.
Company secretary Mavuto Munginga in a cautionary statement said, “Further to the cautionary statement issued on March 10, 2023, the directors would like to advise that negotiations with a potential partner to develop and dispose of certain assets have now been terminated. As a result, caution is no longer required to be exercised when dealing in the company’s shares.”
According to Munginga, the board of Willdale will continue to explore other options to unlock value from idle assets.
This comes after the company had told its shareholders in 2022 that it had entered into negotiations for the disposal of certain idle assets, whose outcome could have a material effect on the business and the share price
In 2017, the company disposed of part of its land for US$11 million, with the proceeds utilised towards servicing debt and settling preference shares obligations.
Over the years, Willdale has been focusing on the production side, buying new equipment and upgrading laboratories.
The company budgeted about US$1 million in capital expenditure to refurbish and renew parts of fixed and mobile plants. This was part of its efforts to enhance efficiency and quality.
“Plant capacity utilisation, which is currently averaging above 80 percent, should provide sufficient stocks to meet targeted sales volumes for the ensuing quarter, provided electricity supply remains reasonable,” the company said in June 2022.
Willdale inflation-adjusted revenue for the first five months to February 2023 increased by 30 percent compared to the same period in the prior year, despite the challenging operating environment.
This comes as the brick maker has not been spared from the ongoing power cuts, which continue to affect production.
Sales volumes were however 9 percent below the prior year.
“The first half of the year will result in induced profitability due to lower-than-expected volumes,” chief executive officer Nyasha Matonda told shareholders at the company’s annual general meeting.
“We expect profitability to improve in the second half of the financial year.”
He said they are encouraged by the huge demand for housing in the country.
“Institutions and individuals are making significant investments in cluster home developments, while the government is also expected to roll out housing development projects in all provinces, amongst other projects.
“These projects will keep our order book healthy throughout the year,” Matonda said – Harare