• Willdale’s sales volumes fell 4% in Q3 as insufficient stock restricted deliveries despite robust brick demand and a 44% increase in fired production
• Capacity utilisation remained at just 35%, with management targeting at least 70%
• Quarterly revenue rose only 1% despite an 8% increase in average selling prices

Harare - Willdale Limited’s sales volumes fell 4% in the quarter ended 30 June 2026 after insufficient stock restricted deliveries during a period of strong demand for bricks from housing and infrastructure projects with industrial stand sales declining 18% from the previous quarter.

Extrusion volumes rose 11% and fired production increased 44%, with Willdale reporting satisfactory plant availability. The company attributed the shortage of saleable stock to limited working capital.

Willdale operated at 35% capacity utilisation and is targeting at least 70% as additional funding becomes available. The target requires the company to double utilisation from its current level using a manufacturing base where plant availability was already described as satisfactory.

The company has identified constrained liquidity as a limitation on both working capital and essential capital expenditure. Its latest disclosure does not quantify the funding required to reach 70% utilisation, the additional brick volumes that level of production would generate or the revenue expected from the higher output.

Construction activity provides demand for additional production. Willdale reported strong housing and infrastructure development during the quarter and described demand for bricks and related building materials as robust. New brick manufacturers also entered the market, increasing competition for that demand.

The sales constraint fed directly into revenue growth. Quarterly revenue increased 1%, while average selling prices rose 8%. Year to date revenue remained 18% below the prior year, despite a 16% increase in average selling prices over the period.

Higher prices have therefore contributed to revenue during a period of weaker sales volumes. Recovering physical sales remains necessary to rebuild the year to date revenue position.

Willdale says working capital availability improved during the fourth quarter and has already supported higher production levels. This establishes a measurable operating test for the remainder of the financial year.

The company is also using its property portfolio to support liquidity. Proceeds from industrial stand sales continue to supplement internally generated cash flows. Willdale expects permits for Haydon Phase 2 and Tenerife to create additional funding opportunities, while Phase 1 of Haydon Industrial Park remains scheduled for completion by the end of September 2026.

Industrial stand sales fell 18% quarter on quarter during a period in which proceeds from those sales continued to supplement operating cash generation. The filing does not disclose the value of land proceeds directed into the brick business or how much of Willdale’s working capital requirement is expected to be financed through further land development and sales.

Management continues to pursue additional funding initiatives for working capital and capital expenditure. Permits covering the remaining land banks are expected during the fourth quarter, with Willdale linking the resulting funding to improved production efficiency, lower operating costs and capacity utilisation of at least 70%.

The sequence can now be tested against management’s own targets. Willdale entered the period with robust brick demand, satisfactory plant availability and 35% capacity utilisation. Working capital subsequently improved, according to management, and production has started increasing. The next operating evidence should appear in stock availability, capacity utilisation and sales volumes.

A move towards the targeted 70% utilisation accompanied by stronger stock availability would support management’s explanation that financing has been the principal production bottleneck. Sales volumes would then need to recover sufficiently to begin closing the 18% year to date revenue deficit.

Failure to produce that progression after working capital improves would weaken liquidity as a sufficient explanation for Willdale’s low utilisation and require greater scrutiny of production efficiency, market execution and the economics of deploying additional capital into the brickmaking operation.

Equity Axis News