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Johannesburg - South African coatings company Freeworld Coatings reported on Thursday diluted headline earnings per share of 66.5c for the six months ended March.
An interim dividend of 10c per share was declared.
The company - formerly Barloworld Coatings - listed on the JSE last December. As this is the first year as a listed company, no strictly comparable figures are available.
However, if performance is measured against the segmental results reported for Coatings Southern Africa in the Barloworld interim results for 2007, then revenue increased by 14% to R1.3bn, while operating profit increased by 17% to R220m, exceeding R200m for the first time, it said.
CEO André Lamprecht said: "Despite tightening economic circumstances Freeworld's first set of interim results are better than expected. This was a strong performance across all segments in the first half. Whilst we are cautious about results for the second half, we look to continue to do well in an even more challenging second half."
Lamprecht said the decorative coatings business delivered a solid
performance against increasingly challenging conditions. Its result was enhanced by good cost management practices.
"Demand for the Plascon brand remains strong in spite of the slowdown in the retail sector. The segment's performance was buoyed by growing infrastructural spending and increased mining activity. However, margins are coming under pressure, particularly in the industrial solvent base area as a
result of significant oil price increases," he said.
In the performance coating segment, the automotive business posted satisfactory results with a solid improvement in the OEM business. A satisfactory performance was also achieved in the refinish and distribution businesses, he said.
The Colourant Systems business achieved an excellent performance, improving both its profit and volume levels.
Environmentally compliant products
"Prospects are very positive for their environmentally compliant products which have moved beyond the development phase and have been successfully launched," he added.
Continued growth in Midas Earthcote franchise stores saw 10 stores being added, including one in Mauritius, bringing the total to 63 stores. Midas Earthcote is the product choice for the prestigious Ahmed Baba Institute of Timbuktu, which will house 25 000 restored ancient manuscripts.
"Our brushware and related application range show pleasing growth in independent hardware stores," he noted.
"Freeworld Coatings successfully purchased some environmentally friendly technologies in the coatings removal and wood restorer segments which will enhance our position both strategically and operationally.
"These will be launched locally in the shorter term and internationally at a later stage. Combined with our positive market reputation and business drivers these will assist our growth as we look ahead with confidence and excitement," Lamprecht concluded.
- I-Net Bridge