Construction and engineering group Murray & Roberts continued to maintain growth momentum in the first half despite volatility in the markets it operates in due to the deepening global economic crisis.
However, the group warned that the continuing global economic slowdown might contain short-term growth.
“Our world and markets have entered a period of sudden and unprecedented uncertainty,” CEO Brian Bruce said yesterday. “This is not the time to trumpet past achievements or predict future outcomes. Our job is quite simply to focus on what we do best — the job at hand. To do it diligently and competently, preserve our capital and work to ensure that we emerge strong and ready into a new world order that lies an uncertain time ahead.”
Diluted headline earnings per share rose 40% to 302c for the six months to December on revenue that was up 44% at R17,6bn on the previous corresponding period’s. Operating profit rose 54% to R1,5bn, which delivered an interim operating margin of 8,3% from 7,7%.
The group said operating margin remained within its short-term range of 7,5%-10%.
Murray & Roberts’s strong performance in the prevailing difficult economic conditions is in line with that of other companies in the sector, which have been boosted by the government’s substantial infrastructure spending programme.
Rival WBHO reported a 78% increase in first-half headline earnings per share, and Group Five posted a 59% increase.
“Despite the loss of some order book in the second quarter, the group has continued to secure key project awards and has maintained its performance momentum," the company said.
Murray & Roberts said it had lost about R10bn worth of contracts in the past three months due to the global financial crisis, especially in the Middle East and mining sector.
Last week, Group Five also reported that it had lost R4bn worth of orders in the Middle East, but that it had replaced this with local public works projects. Murray & Roberts said that it had secured new orders worth about R28bn since June, despite the loss of orders across all its markets over the past three months due to the effect on some clients of the global economic downturn.
The group’s order book remained stable at R60bn against the R61bn at the end of September, while it had grown from R55bn in June. SA and the subregion account for 53% of the total order book, down slightly from 56% in June; the Middle East 28% up from 22% in June; Australasia 13% and rest of the world 6%.
“The second quarter of the first half year was characterised by increased uncertainty in all the group’s markets as the global economic crisis forced clients to review capital programmes and in some instances, cancel or suspend committed contracts or withdraw pending contracts from the market.”
