THE "abnormally" resilient residential building market underpinned strong earnings growth for York Timber in the six months to December
While traditionally growth in residential building has correlated with the pace of economic expansion, this is currently not the case.
York Timber said on Thursday first-half timber sales volumes, used for roof trusses, window frames and doors, had jumped 10%.
During this period, local economic growth hovered at about 1%, its slowest pace of expansion since 2009.
"Despite a negative outlook for the economy, York is experiencing strong demand for its products," the company said on Thursday.
York’s R45m acquisition of Illiad Africa’s wholesale timber division in 2013 had increased its footprint in the timber retail market. Sales volumes to wholesalers increased 14% during the period.
Earlier this month, Cashbuild, SA’s largest retailer of building material, reported a 27% jump in third-quarter timber sales, from 23% in the second quarter, and 27% in the first.
Vunani Securities small caps analyst Anthony Clark described the underlying strength of the domestic residential building market as "abnormal".
"The dramatic increase in timber sales is surprising, given current weakness in the economy," he said.
York said expansion projects under way would improve its product offering and diversify its income stream.
Due to fair value adjustments of its biological assets, York’s headline earnings per share halved to 11c in the six months to December. Core earnings per share, however, excluding the adjustment of its forest plantations, jumped 24%.
Picture: THINKSTOCK
THE "abnormally" resilient residential building market underpinned strong earnings growth for York Timber in the six months to December
While traditionally growth in residential building has correlated with the pace of economic expansion, this is currently not the case.
York Timber said on Thursday first-half timber sales volumes, used for roof trusses, window frames and doors, had jumped 10%.
During this period, local economic growth hovered at about 1%, its slowest pace of expansion since 2009.
"Despite a negative outlook for the economy, York is experiencing strong demand for its products," the company said on Thursday.
York’s R45m acquisition of Illiad Africa’s wholesale timber division in 2013 had increased its footprint in the timber retail market. Sales volumes to wholesalers increased 14% during the period.
Earlier this month, Cashbuild, SA’s largest retailer of building material, reported a 27% jump in third-quarter timber sales, from 23% in the second quarter, and 27% in the first.
Vunani Securities small caps analyst Anthony Clark described the underlying strength of the domestic residential building market as "abnormal".
"The dramatic increase in timber sales is surprising, given current weakness in the economy," he said.
York said expansion projects under way would improve its product offering and diversify its income stream.
Due to fair value adjustments of its biological assets, York’s headline earnings per share halved to 11c in the six months to December. Core earnings per share, however, excluding the adjustment of its forest plantations, jumped 24%.
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