Murray and Roberts results solid

Posted On Thursday, 28 August 2003 02:00 Published by Commercial Property News
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TOUGH conditions in the construction market were expected to catch up with SA's second largest construction group Murray & Roberts in the current financial year.

Brian Bruce Murray and RobertsThe group reported solid results for the year to June yesterday, but expected growth in headline earnings to be at a lower rate than that achieved over the past three years. 

 One of the main reasons for the expected slowdown was the strong rand and uncertainty over legislation which led to large mining projects being deferred. Government was also not delivering on large projects, said CE Brian Bruce.

 Murray & Roberts' order book value had dropped by R1bn over the past year to R4,8bn. Bruce said this was mainly due to the difference in the rand value at the end of the latest financial year compared with June 2002.

 He said that Murray & Roberts was also being more selective in choosing projects.

Bruce described the group's performance as very good, particularly against the backdrop of the rand's appreciation.

 A construction analyst said the performance was in line with expectations. Headline earnings at 175c a share came in slightly below the I-Net Bridge consensus forecast of 180c. The analyst was not overly concerned about the drop in the order book. "It's not all about size but the construction market is going to be tough in the next six to eight months at least," he said.

 Revenue hit the R10bn mark in the financial year to June, up from R9bn in the previous year. Earnings attributable to ordinary shareholders rose to R564m in the reporting period from R505m in the previous financial year.

 Headline earnings a share rose 13%, while an operating margin of 6,1% was achieved, compared with 4,3% in the previous year.

 The solid performance was attributed in part to the group's restructuring programme, which was now in its third year.

 Meanwhile, Murray & Roberts and other South African construction companies appeared to be substantially less enthusiastic about opportunities in Africa. Road construction projects were proving particularly challenging.

 Bruce said construction companies were increasingly expected to absorb levels of risk over extended periods that were often unreasonable and unjustified.

 Bruce said activities outside of SA generated about 40% of the group's revenues. However, he expected this figure to decline in one to two years. Murray & Roberts' share price closed at 1317c on the JSE Securities Exchange SA yesterday.

Last modified on Friday, 21 June 2013 22:59

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