The first shipment of hurricane-proof doors by glass and aluminium products manufacturer AGI group is now en route from South Africa to Florida after US safety authorities finally gave their approval….
The first shipment of hurricane-proof doors by glass and aluminium products manufacturer AGI group is now en route from South Africa to Florida after US safety authorities finally gave their approval. AGI“s extensive investment in its US business is about to yield results in spite of the difficulty in getting approval from authorities there. AGI is enthusiastic about its prospects in the USA now that the long delay for approval of its doors is over. Executive chairman Alex Barrell said that because the margins on the doors being exported to the US were a lot higher than on its existing product range in the country, fluctuations in the value of the volatile South African Rand would not matter so much. The arrival of the doors would change the nature of its US operation, moving it from a narrow profit margin distributor of glass products to a distributor of higher margin aluminium and glass products. He said now that its US operation is settled, AGI was starting to expand range of goods available in Europe. The rand“s strength hit AGI“s earnings from abroad, leading to a ZAR 12.2 million drop in foreign exchange earnings in the interim results for the July to December 2002 period. While the group increased turnover 37% to ZAR 528.3 million and increased headline profit before earnings from abroad 34% to ZAR 50.6 million, a foreign exchange loss of ZAR 2.97 million saw only a moderate rise of 1% to ZAR 47.64 million in operating profit. Headline earnings fell 23% to ZAR 24.4 million. Barrell said while the rand“s movement had a negative effect on foreign earnings, AGI“s domestic operations performed superbly, showing organic growth of 30% for the period under review. Although he was happy with the company“s performance in South Africa, Barrell said AGI“s prospects in the short-term were “uncertain”. While the short-term outlook for the domestic economy was cloudy, AGI said that the home improvement market in SA was buoyant, which was a positive sign for the group. In spite of it being early days with regard to its US growth phase, Barrell did not rule out expanding operation up the US eastern seaboard.