Competition Tribunal is today due to confirm an immunity agreement JSE-listed construction group Aveng struck with the Competition Commission.

Thursday, 20 October 2016 14:09

Murray and Roberts joins voluntary deal

Murray & Roberts opts to participate in a R1.25bn 'voluntary' settlement agreement between construction companies.

Construction groups say they will collectively pay R1.25bn to accelerate transformation in the country's construction sector in settlement of collusion claims in the industry.

Construction Group Raubex Group has pointed to a secured order book of R4.7bn to help see the group through continued challenging trading conditions in the short-term.

Wednesday, 19 May 2010 02:00

Raubex earnings up 11%- 323.8c vs 291.7c

Raubex has reported headline earnings per share up 11% to 323.8c for the year ended February 28, 2010 from 291.7c previously.

Tuesday, 10 November 2009 02:00

Raubex Group reports improved results

Raubex’s operating profit rise 10,6% to R440m in the six months to August, with the road construction earnings up 10,2% to 159,4c compared to the first half.

Francois DiedrechsenStrong government infrastructure spend saw Raubex Group’s operating profit rise 10,6% to R440m in the six months to August, with the road construction group’s headline earnings per share up 10,2% to 159,4c compared to the first half.

In an interim results statement, Raubex Group predicted “a strong performance in the second half” after reporting first-half revenues of R2,27bn, a rise of 1,8% from the corresponding period last year.

Declaring an interim dividend of 35c per share, Raubex reported a “stable” order book of R5,2bn, up from R4,9bn in the first half.

Profit before tax increased 11,4% to R429m from the corresponding period last year, with the group’s operating margin up from 17,8% in the first half to 19,4%.

Francois Diedrechsen, financial and commercial director of Raubex, said: “It’s a pleasing set of results — the world’s been in a fairly difficult period over the last six months, but we’ve still managed to achieve double-digit growth. We primarily operate in road infrastructure, which is government-driven business, so our exposure to the private sector is reasonably small, which has stood us well.”

Raubex’s road rehabilitation division, Roadmac, recorded a 19,9% fall in turnover to R944m from the first half, although it remained the largest contributor to group revenues. The division’s operating profit decreased 9,8% from the first half to R198,2m.

Raubex blamed the decline on “a change in the segmental mix as Roadmac’s resources are being deployed on various contracts in Namibia and Zambia, increased competition resulting in a lower rate of tender successes … as well as the effect of rise and fall clauses as declining input costs were passed on to the clients.”

Diedrechsen said “40% of Roadmac’s costs are oil price- related; a lot of the tenders we reported on were when oil prices were much higher, before the subsequent deflationary period”.

He also cited the appreciation of the rand against the Zambian currency, the kwacha, as affecting the group’s cash flow.

The statement said “in order to secure new work locally, current operating margins in the Roadmac and Raubex divisions will continue to be adjusted to account for the increased competition, particularly in the light road surfacing sector”.

 

Tuesday, 11 November 2008 02:00

Acquisitions bring joy to Raubex

CONSTRUCTION group Raubex yesterday reported a strong performance for the first half of the year, boosted largely by its recent trail of acquisitions.

Francois DiedrechsenFinancial director Francois Diedrechsen said the results were in line with expectations and that the group’s pre listing growth strategy was beginning to pay off. Since listing on the JSE in March last year, the company has made several acquisitions, which have ramped up its order book to just under R5bn and positioned it well to take advantage of the billions of rands being spent on Gauteng’s road improvement programme.

Operating profit jumped 108,1% to R398m from R191,2m in the previous comparable period, while headline earnings per share grew 80,5% to 144,6c per share from 80,1c. Revenue increased 131,7% to R2,23bn from R963,5m.

However, group operating margin decreased 10,1% from 19,8% to 17,8% compared with the corresponding prior year period as a result of the acquisitions concluded towards the end of last year, as well as its 5% exposure to the poorly performing residential market.

“While the acquisitions have enhanced our earnings, they have also had dilutive effects on our margins. The fact that the residential property market has not been growing at all has also affected our margins,” Diedrechsen said.

The results included the first set of earnings from the acquisitions completed last year, and which gave Raubex the capacity and depth of skills to take full advantage of the accelerated demand.

“During the period, we also successfully bedded down a number of acquisitions, the financial effects of which are included in this set of results,” Diedrechsen said. “These acquisitions have proved to be value-enhancing and are performing well. Importantly, the depth and breadth of skills and capacity that they’ve brought to the group positioned us well to continue taking full advantage of the spend driven by the government and private sector.”

Raubex said it had especially benefited from the government-led investment programme in national road expansion and rehabilitation. The group has over the past year successfully made five strategic acquisitions, as it geared itself up to meet the increased demand created by the road upgrade programme.

Early this year, the group acquired Bonn Plant Hire and the business of Akasia Road Surfacing for R117m, which fitted in the group’s Roadmac division, specialising in road construction, road surfacing and asphalt manufacturing.

 

Monday, 10 November 2008 02:00

Raubex interim earnings up 80.5%

South African road construction group Raubex Group on Monday reported 80.5% rise to 144.6 cents in headline earnings per share for the interim period ended August compared with the same time a year ago.

An interim dividend of 30 cents was declared.

Francois DiedrechsenRevenue swelled 131.7% to R2.23 billion, operating profit jumped 108.1% to R398 million and order book grew 113% to R4.9 billion.

Francois Diedrechsen, Financial and Commercial Director of Raubex Group, said the performance was in-line with our expectations.

"During the period we also successfully bedded down a number of acquisitions, the financial effects of which are included in this set of results," he said.

He added that the acquisitions were value-enhancing and performing well.

"Importantly, the depth and breadth of skills and capacity that they've brought to the Group positioned us well to continue taking full advantage of the spend driven by the government and private sector," said Diedrechsen.

Looking ahead, the group expects to deliver a strong performance in the second half as road upgrades gather momentum in the lead up the 2010 Fifa World Cup.

"With the Gauteng Freeway Improvement Project now underway, we expect the South African National Roads Agency Limited (SANRAL) to be announcing a number of reasonably sized contracts to be released for tender in the coming months," Raubex said.

SANRAL remains Raubex largest client, accounting for some 40% of its revenues.

 

Monday, 19 May 2008 02:00

Raubex declares 40c dividend

Raubex (RBX) reported a 116.2% rise in headline earnings per share rise to 116.2 cents for the year ended February.

Francois DiedrechsenA final dividend of 40 cents was declared, compared with no dividend a year ago.

Revenue rose 79.4% to R2.14 billion, operating profit was up 121.7% to R431.3 million and cash flow from operations was up 125.7% to R448.8 million.

The group’s order book increased to R2.7 billion from R1.6 billion a year ago.

Industry players, including Raubex, are now seeing the results of the government’s infrastructure investments filter through to the order book, it said.

"The performance over the past year is in line with expectations and underpinned by an improved operating margin and a healthy order book across all divisions," said Francois Diedrechsen, Financial and Commercial Director of Raubex Group.

He added that over the period, the group acquired a number of value-enhancing businesses fitting across all the three divisions.

Raubex made seven acquisitions during the period under review.

"The acquisitive growth was balanced by continued organic growth derived from improved operational efficiencies and skills development," he said.

Looking ahead, Diedrechsen said the group would continue to focus on integrating the strategic acquisitions while ensuring that the group’s entrepreneurial spirit remained intact.

"We are now positioned as a significantly larger business with increased capacity and geographic reach to take full advantage of the opportunities offered by an overall increase in demand for our services around the country. We look forward to another strong performance in the coming year," he said.

 

Friday, 07 December 2007 02:00

Moving and shaking

Super-bullish conditions in infrastructure are supporting consolidation and organic growth in the sector, and it seems there are still attractive returns to be had.

Construction IndustryRoads & civils specialist Raubex, which listed in March this year, has made its largest move to date, gobbling up peer company B&E in a R514 million deal that will allow the company to bulk up capacity.

Aneshrin Pillay, an analyst with Afri-focus Securities, says the deal is substantial: "It's in line with their strategy to enhance their materials business and it looks to be earnings-enhancing and margin-enhancing."

B&E will slot in nicely with Raubex's aggregates and crushing operation, Raumix. The market appears to like the deal, with the share moving at least 4% on the announcement.

However, says Pillay, a deal this size does eat into the company's cash resources, and this is compounded by the fact that it has already shelled out about R160 million on capital equipment.

The transaction will be funded through a combination of shares and cash, which will see B&E receive about 9m shares (worth about R295m) and R218m in cash.

Rowan Goeller, an analyst with Macquarie First South Securities, says the transaction grows the company's fleet and skills base, and will allow it to take on more work, since one of Raubex's strengths is to "move their plant around and do crushing work for the other contracts they have".

Goeller says B&E is being bought at a historic price:earnings ratio of about 10, based on the past six months' financial performance.

According to I-Net Bridge, Raubex is trading at almost three times the p:e of B&E. The only concern raised over the deal is the dilution to shareholders, but if the deal delivers more profitable growth, shareholders aren't likely to notice.

Another company that has been moving to strengthen its market position is construction company Sanyati. It continues to expand beyond its roots in KwaZulu Natal, and with its R220 million acquisition of the Meyker Group it is now active in seven of the nine provinces.

In the six months to end-August, Sanyati acquired construction and civils companies Ruthcon and GEM. Before that it bought Hibiscus Asphalt and Mega Pile.

The group will be paying for the Meyker transaction in tranches over the next four years. The transaction is being funded through cash and shares (about 44 million will be issued).

Sanyati CEO Rick Jackson says it's likely the group will make one more large transaction so as to meet its 2012 revenue target of R2,7 billion.

Another company making moves is Protech Khuthele, which this week announced the acquisition of two ready-mix operations for R79 million.

Protech is primarily a fast-track bulk earthworks company, but chief financial officer Nellis Wolmarans says it also does some civils work.

This requires a fair amount of concrete and readymix, which the company has had to rely on suppliers for.

"In the past we have called readymix suppliers and they don't arrive the next day or the day after. Even if we place huge orders we can end up waiting for weeks, which holds us up," says Wolmarans.

He says Protech has in the past moved to make itself more efficient by diversifying its business. "We started our geotechnical laboratory for the same reason, because the labs we were using weren't keeping pace with us."

The company will also be able to diversify the service offering on contracts, as it will now have the plant and skills to take on more civils work, such as culverts and drains.

Protech CEO Gerald Chapman says the six plants the business is acquiring will boost earnings, which "should be handsomely compounded in the months and years ahead, given especially the construction industry's rapid growth".

In related news, M&R said shareholders could look forward to earnings per share that would be between 40% and 50% higher for the six months to end-December and the year to end-June 2008, than in the previous comparable periods.

Proceeds from disposals of noncore assets are likely to lift these respective performances by as much as 110%.

M&R also said it had secured a seven-year, R7 billion contract for Eskom's first new coal-fired power station, Medupi, involving steel fabrication, erection and mechanical installation.

Goeller says it is likely that construction companies will continue to deliver outstanding performances "for a while yet", as government's spending was only beginning to have an impact now.

He also says all the indications are that the private sector is starting to make available the infrastructure spending that had previously been put on hold.

 

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