Economic performance

Although Buildmax again reported a loss for the year under review, it did achieve several objectives in terms of the turnaround strategy implemented at the beginning of the 2011 financial year. The most significant highlights are listed below:

Corporate highlights during the 2011 financial year were:
• Raised R300,5 million during November 2010 through a rights issue to qualifying shareholders;

• Management and the group’s bankers agreed on revised, less onerous covenants for existing asset-based financing facilities in the group’s Mining Services business unit;

• The controlled wind-down of Vukuza was successfully implemented;

• The group continued with the strategy to dispose of its surplus mining equipment at reasonable values in a depressed second-hand market;

• Subsequent to the end of the 2011 financial year the group managed to secure adequate funding facilities for its capital replacement programme for the 2012 financial year.

Key features of the company’s financial performance as at 28 February 2011 were:
• Revenue from continued operations increased by 4,7% to R1,3 billion;

• Operating losses reduced by more than 50% during the last six months of the reporting period compared to the first six months and the last six months of the previous financial year;

• Overall, the group’s basic loss reduced by 63,8% compared to the previous financial year;

• The group managed to reduce its total interest-bearing debt by 56% to R289 million thereby creating a stronger balance sheet that will be used as a base to fund future growth.

Direct value added by Buildmax
The direct value created by the group through its diverse business operations and activities includes: revenue generated by the various entities in its three business units, operating costs, employee compensation, payments to land owners and payments to the South African government (in the form of taxes and levies).

The group contributes to the overall growth of the country through:
• Investing in skills development and training;
• Creating job opportunities;
• Supporting local, small and medium business enterprises whenever possible; and
• Corporate social investment programmes.

The group does not receive any financial assistance from the South African government.

Value Added Statement
as at 28 February 2011

	2011		2010
	R'000	%	R'000	%
Value added during the year
Revenue	1 369 214		1 805 584
Other operating income	48 596		14 699
Cost of sales and other services	(958 363)		(1 257 608)
Value added from operations	459 447	98,5	562 675	97,3
Interest received	6 796	1,5	15 430	2,7
Wealth created	466 243	100,0	578 105	100,0
Distributions during the year
Management and employees	264 155	56,7	272 636	47,2
Providers of capital	41 759	9,0	101 856	17,6
Government	67 472	14,5	74 618	12,9
– SA Normal income tax	4 881		9 652
– Employee taxes, skills development and other levies	57 128		59 874
– Royalties	5 294		4 992
– Fines and penalties	169		100
Reinvested in the group	92 857	19,9	128 995	22,3
Wealth distribution	466 243	100,0	578 105	100,0
Number of employees at reporting date	2 405		3 450
Revenue per employee	569		523
Wealth created per employee	194		168

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