Annual Reports

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Annual Report 2001

Chairman’s Review

The company enjoyed another successful year of operations with its performance for the year 2001 very similar to that of 2000. Production, sales volume and costs were virtually the same for both years. Net profit before taxes for 2001 was slightly higher than the prior year, but an increase in the effective rate of taxation (35.2% in 2001 versus 32.0% in 2000) reduced net profit after taxes to $264,000 lower than the previous year.

Our 2001 performance was facilitated by a sustained level of buoyancy in the premixed industry for a second consecutive year, coupled with the retention by Readymix of its significant market leadership position in this segment of the construction industry and the continued dedication of our personnel to provide superior services.

Financial Highlights

Revenue for the year 2001 amounted to $130.29 million, an increase of 5% over the prior year. Net profit before taxes was $13.37 million compared to $13.13 million in 2000. Net profit after taxes amounted to $8.66 million compared with the previous year's total of $8.93 million, resulting from the 3.2% increase in the effective rate of taxation.

The company's Balance Sheet continued to strengthen during the period under review. Total Net Assets grew to $33.05 million at December 31, 2001, from $27.63 million at December 31, 2000. The debt to equity ratio improved to 0.52, from 0.75 in the previous year and the current ration also improved slightly to 1.20 from 1.19 at December 2000.

Earnings and Dividends

The company's earnings per share declined marginally in 2001 to 72 cents from 74 cents in 2000. The Board of Directors recommends a final dividend of eight (8) cents per share pending shareholders' approval at the Annual Meeting. This amount together with the interim dividend of sixteen (16) cents per share which was paid in September 2001, will result in a total dividend of twenty-four (24) cents per share for 2001.

Operating Highlights

Spurred by accelerated works at the ALNG project, the local premixed concrete industry experienced another good year in 2001. Industry sales approximated 386,180 m³ - up 4% from 2000. RML's concrete sales in 2001 of 239,000 m³ were virtually flat versus 2000 (240,000 m³). Over 25% of our sales emanated from the exclusive supply contract for the ALNG Project - the largest concrete works project in the English speaking Caribbean during 2001. Readymix's market share in Trinidad and Tobago during 2001 is estimated at 62% compared with 64% in 2000 - despite the entry by two new competitors during the year.

Our quarry operations continued to deliver strategic support to Readymix's overall operations. Although total aggregate produced in 2001 was 1% lower than the previous year, aggregate production per shift improved by 2.3%. There were also improvements in the cost of aggregate production per cubic metre and total pitrun mined. The cost and production improvements at Melajo during 2001 were partially influenced by the purchase of over $2.62 million worth of mobile equipment, which significantly reduced our equipment rental expenses. We intend to continue with this replacement program during 2002. The Bermudez Quarry lands accounted for 35% of the pitrun mined compared to 25% in 2000 and was central to our ability to consistently meet the aggregate specified for the ALNG project. As a result of the excellent performance at our quarries, less than 1% of our aggregate requirements were sourced from third parties during the period under review.

Company's Profile

During 2001, the company received several National, Industry and Marketing Awards, including the Ernst & Young Award for the company listed on the stock exchange showing the biggest improvement during the prior year. The Board extends its congratulations to all company personnel who are the contributors to these attainments.

The Future

During the last two months of 2001 and continuing into the New Year, there has been a very sharp decline in the local demand for premixed concrete. A delay is expected in the startup of some construction projects and we therefore anticipate a less buoyant year for the premixed concrete industry in 2002. We are also aware of two new entries into the premixed market during 2002. The company is however taking measures to cushion the fallout from the expected decline in the market, including improving efficiencies in all areas of operations, and fully expects to maintain its market share.

On behalf of the Board of Directors, I wish to thank our customers for their continued support. I also wish to extend our appreciation to the suppliers and contractors who have partnered with us during the period under review. Finally, I once again thanks the company's Management and Staff for their contributions to another successful year of operations.

Walton F. James
18th March 2002