Finweek English Edition - - SIMON SAYS -

Afrimat re­sults show that the company is able to do what few oth­ers can – make real prof­its in the con­struc­tion sec­tor. A sim­ple business that sup­plies stone has re­sulted in R1bn in rev­enue for the six months to Au­gust. Afrimat does a lot right: it sticks to its job, keep­ing it sim­ple, and it ’s more than happy to take on smaller con­tracts that the big play­ers re­ject. The company has also been smart with its quar­ries. When you sell stones, the big­gest ex­pense is mov­ing them to where they’re needed so the po­si­tion of the quar­ries is crit­i­cal. Lastly, Afrimat has been ex­tra smart in the ac­qui­si­tion space, mak­ing very few ac­qui­si­tions, but all have worked out in­cred­i­bly well. the ex­tremely cheap EasyEquities plat­form. But what it desperately needs is scale, and with a mod­est R405m in as­sets un­der man­age­ment at Em­peror As­set Man­age­ment, and EasyEquities aim­ing at smaller trans­ac­tions, that scale is prov­ing tough to f ind. In the as­set man­age­ment space it’s about how much you have un­der your con­trol, as this is where fees are gen­er­ated. An in­crease in as­sets un­der man­age­ment makes more rev­enue with lit­tle cost in­crease, in other words, awe­some op­er­at­ing lever­age. The R405m at Em­peror As­set Man­age­ment is up 54%, but the group needs to get it into the bil­lions.

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