Gross profit and operating margins have remained relatively constant over the last two years at 39% and 27% respectively and are expected to improve over the next 12 months due to the effect of vertical integration. Headline earnings per share increased by 34.33% to 31.3c (23.3c).
Dividends
William Tell's dividend policy, in the absence of unforeseen circumstances, is to declare a dividend based on a dividend cover of three times, payable bi- annually for each six-month period ending 30 June and 31 December and payable to shareholders in October and April respectively of each year. The first dividend payable to shareholders after the listing will be in respect of the six-month period ending 31 December 2007, payable in April 2008.
Prospects
The board expects that the economy will remain strong for the foreseeable future, as will the demand for the company's products. In these circumstances and in the light of the trading performance for the first two months of the new financial year, the board is confident of achieving the forecast for 2008 contained in the prospectus. To meet continuing demand, and to increase the company's market share, a second chipboard plant is being constructed in Chamdor on the West Rand according to plan. The plant is expected to be commissioned in June 2008 at a total cost, including property development, of R120 million.
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