CRANE supplier SA French yesterday said it would list on the JSE to increase capacity as it was turning away 20% of business because it was not coping with the unprecedented demand for plant and equipment in the robust construction and mining industries.

SA French chairman Quentin van Breda said the Gauteng-based company was set to debut on the JSE’s AltX next month to facilitate expansion and help boost inventory to meet demand. The company had held the exclusive rights for the supply of Potain tower cranes in southern Africa for the past 25 years, and recently extended this exclusive arrangement for five more years.

Van Breda said the company has further diversified into complementary materials-handling equipment sourced from Europe’s leading manufacturers.

These included Merlo telescopic handlers and self-loading concrete mixers; Torgar material, passenger hoists and working platforms; Ausa dumpers and rough terrain forklifts; and Ormig “pick and carry” machines.

“The company’s in-house engineering capability offers turnkey lifting solutions backed by full assembly, operation and dismantling teams. We can provide the solution including equipment for moving anything on a site or mine. Our value-add engineering capacity assists clients in filling the gap created by the skills shortage of qualified engineers.”

He said revenue was forecast to swell from R120,9m to R190,5m next year with net profit of R12,6m forecast to increase to R21,8m. Van Breda said he was confident the company would achieve the forecast growth with orders in hand of R80m, and a further secured project pipeline of R70m.

“Sales of tower cranes generate the lion’s share of revenue and are largely repeat business from an established client base that replaces obsolete cranes with new models as well as expanded fleets.”

He said sales were set to increase exponentially. “Most tower cranes in SA are 25 years or older and the average life expectancy of a tower crane is only 25 years. Construction and engineering houses must seek to upgrade on average at least five large tower cranes a year to maintain their fleets at an average cost of R5m per crane, which bodes well for growth at SA French.”

Van Breda said this was the motivation behind the prelisting private placement to raise capital of R50m.

“At present the company is turning away around 20% of business as we do not have the inventory to fulfil the number of orders.” He said that R50m would “go some way towards securing preferable credit terms for larger bulk orders from our key suppliers.”

The company was involved in a prelisting private placement of 50-million shares at R1 per share, after which it would list with a market capitalisation of about R165m.
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Abdul Milazi
Johannesburg

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