Basil Read notes caution ahead of BEE deal

Posted On Tuesday, 06 September 2011 02:00 Published by Commercial Property News
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Civil engineering group Basil Read on Tuesday advised that it is currently in discussions regarding a possible Black Economic Empowerment transaction

Basil Read BEEAccordingly, shareholders are advised to exercise caution when dealing in the company's securities, until a full announcement has been made," it said in a statement.

Earlier this month, the group reported a fall in diluted headline earnings per share to 75.21 cents for the six months ended June from 104.34 cents a year ago, reflecting the extremely difficult trading conditions in the sector.

The board described the results as "satisfactory", despite extremely difficult trading conditions. Revenue was up a modest 12% to 2.9 billion rand, but operating profit decreased by 26% to 150.0 million rand, which translated into an operating margin of 5.1% versus 7.7% a year ago. Net profit decreased by 27% to 92.8 million rand. No interim dividend was declared.

The group secured 5.3 billion rand of new contracts in the period, up from 2.6 billion rand a year ago, and the order book is a healthy 10.2 billion rand, compared with 8.1 billion rand a year ago.

Tenders to the value of 35 billion rand were submitted in the six months to June for the construction and mining divisions. The group's historic strike rate for tenders stands at between 11% and 18%.

Last modified on Tuesday, 25 June 2013 00:45

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