CONSTRUCTION company Aveng Group plans to return R3,5bn in cash — half the amount received from selling its stake in Holcim — through a share buyback facilitated by Rand Merchant Bank (RMB).

The company said yesterday the arrangement was an exit opportunity for those Aveng shareholders wanting one.

It said RMB would acquire R3,5bn worth of shares from shareholders on September 17. This would be for a cash consideration for each share equal to the lower of the volume-weighted average share price for that week, minus the 85c dividend for the year to June. Or it would buy the shares at a 5% premium to last week’s average daily close, whichever was lower.

Aveng said the offer was voluntary and on a “first come, first served” basis. The group would then buy back the shares from RMB within five days of the date of sale.

The group said it would come up with an alternative plan should shareholders opt not to sell.

Aveng announced a 38% increase in revenue to R22,1bn from R16bn for the year to June as it continued to benefit from the boom in all areas of domestic and foreign construction, with strong demand filtering through to the steel and allied businesses.

McConnell Dowell, the group’s Australian operation, reported exceptional revenue growth, resulting in more geographically balanced construction revenue for the group.

Aveng CEO Carl Grim said: “Exceptionally strong demand, substantially improved risk management and McConnell Dowell’s success in attracting skills led to this increase in profitability. McConnell Dowell remains in a strong upward path as there is a backlog for defined projects in Australia able to support annual expenditure of A55bn a year through to 2011.”

The engineering and construction cluster, consisting of Grinaker-LTA, Moolmans and E+PC, recovered from a R5m operating loss last year, posting operating profit of R175m and a 27% revenue increase to R9,5bn from R7,4bn.

“This cluster contributed 43% of the Aveng group revenue ... We are particularly pleased with the R629m operating cash flow generated by Grinaker-LTA in the past year, leaving no doubt ... that the business has turned, pointing to future profitability growth,” said Grim.

The steel and allied cluster consisting of Trident Steel, Aveng Manufacturing and the Aveng Group corporate office continued to benefit from heightened activity in the infrastructure market, with a 21% increase in revenue to R6,8bn from R5,6bn.

Grim said growing economies of scale and a drive to boost internal efficiencies continued to benefit the cluster, which reported an 18% increase in operating profit to R793m from R670m.

In May Aveng sold its 46% stake in Holcim for R7,4bn, R6,8bn of which was in cash and R641m in secondary tax on companies credits.