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Fox Marble's Bianco Illirico and Illirico Selene marble set to shine

Last updated: 10:45 13 Dec 2016 GMT, First published: 07:45 13 Dec 2016 GMT

Blocks of marble in a quarry
The company's order book for 2017 currently stands at €2.9mln

Marble quarries owner Fox Marble Holdings PLC (LON:FOX) has a number of potential distribution and off-take deals in the offing, it said this morning.

In an operational update, the company, which owns three quarries in Kosovo and one in Macedonia, said it is in talks with potential customers in the UK, Europe, USA and Asia.

Although there is no guarantee these deals will be consummated, the company is increasingly seeing its high-grade product being used in some of the most prestigious housing developments, such as the Lillie Square development, the largest residential development in Europe; as such, Fox Marble is hopeful these potential deals will have a positive impact on 2017’s revenues.

The company’s long-awaited processing factory in Kosovo is due to crank into action before the end of the year. Fox Marble said the marble finishing factory in Kosovo has now entered the final stages of delivery, commissioning and testing overseen by Fox Marble's technicians.

WATCH: Fox Marble chief Chris Gilbert speaks to Proactive's Stocktube

The ability to produce a final polished and cut marble product should allow Fox Marble to accelerate sales conversion rates, in particular for Balkan orders, where the company remains the only operator of scale in the region, and to maintain and increase margins across the marble product range in 2017.   

“Completion of the new processing factory is now imminent and our operational progress has strengthened our unique position as the only operator of any scale in the Balkans with the access, know-how and capability to extract and supply marble of comparable quality to more developed markets at a lower cost,” said Chris Gilbert, Fox Marble’s chief executive officer.

Having its own processing factory will put Fox Marble more in control of its own destiny, but there are some elements of the supply chain it cannot do much about, and it informed investors that longer lead times had resulted in some orders expected to be converted into sales this year rolling over to next year.

Revenues from the company’s quarried block marble and finished marble sales for 2016 are expected to be in the region of €0.7mln, up from €0.2mln the year before, but lower than the company had previously anticipated.

“Marble continues to be highly valued and sought after across a range of markets globally and we continue to benefit from an extremely supportive political environment with the Kosovan government committed to put the region firmly on the map for marble production at scale,” CEO Chris Gilbert said.

"With these positive developments in mind, we believe that the underlying investment fundamentals remain strong and that we are now ideally positioned to deliver on our international growth strategy as a preeminent integrated marble production, sales and distribution company in 2017," he added.

Cash at the end of November stood at €1.1mln, which includes €0.3mln of cash advances relating to outstanding orders in the company’s order book.

Speaking to Proactive Investors, Gilbert acknowledged that shareholders had every right to be frustrated at delays to commissioning of the processing plant and the speed at which the pipeline of orders is being converted into sales, but said the investment fundamentals remain as strong as they ever did.

“This company was effectively a blank piece of paper four years ago, and in that time we have established a brand at the highest end of the market,” Gilbert said.

Property developers are gagging for the company’s Bianco Illirico white marble and Illirico Selene grey marble product, according to Gilbert, and it is worth noting when assessing Fox Marble’s record of delivering on its promises (which Gilbert concedes is not perfect) that these highly sought after types of marble are being extracted from a quarry that did not even exist 14 months ago.

Italians, who know a thing or two about marble quarries, told Gilbert that it would take three years to develop the Maleshevë, so to have some of the quarry’s product installed in some of the most prestigious residential developments in Europe barely a year after starting up was a “spectacular achievement”, according to Gilbert, and a testament to the dedication of the company’s staff.

“This is still a high-margin business, and we are winning business that a start-up just could not win, so my message to shareholders is: be patient just a little longer,” Gilbert told Proactive Investors.

How much longer?

Well, the quarries have shut down for the winter, though work continues on the processing plant. Gilbert reckons spring – appropriately the season of rebirth – will see the company start to reap the benefits of the hard work put in over the last four years.

 

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