Unequal and shared growth
THE LATEST ANNUAL REPORT of building materials provider Afrimat makes for easy reading, with well laid out pages and nice pictures (not that shareholders can be expected to read annual reports for pictures). The whole report is 72 pages long but is complete, as it offers almost everything required in an annual report.
Afrimat CE Andries van Heerden and non-executive chairman Matie von Wielligh took time to deliver short and succinct reports with insights into the business. No less than three acquisitions were made in the year to February, while some non-performing plants in both the Eastern and Western Cape were disposed of.
New quarries were commissioned in Gauteng (for the first time) and the Western Cape. Investment expenditure at a plant in Ladysmith added 90% extra capacity there, as the plant has been operating at full capacity. All these helped Afrimat produce 4,4m t of aggregate, 0,2m cubic metres of ready-mix concrete and 85m bricks in financial 2008.
The report also gives interesting information in the value added statement, where it states that R273m of value was created from R611m revenue. Employees received R97m (36%) of the value created in salaries and other benefits, with R85m retained for future growth. Considering the group nearly doubled revenue in 2008 those figures compare favourably to the R70m employee costs of 2007 and R46m of retained funds, while shareholders also benefited handsomely from the 78% growth in dividend payments. One thing that Afrimat perhaps needs to explain is why it reckons its chairman must be awarded a 49% increase to R336 000 in directors’ fees plus R33 000 for his role as remuneration and nomination committee chairman while other non-executives have to do with a 37% increase in fixed fees to R89 000. Membership of committees guarantees a director an additional minimum fixed R17 000, all the way up to R28 000. Should there be a need for any extraordinary duty, directors will be guaranteed a rate of R10 000/day.