WBHO keeps positive outlook on SA

Posted On Tuesday, 08 September 2009 02:00 Published by Commercial Property News
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Construction group WBHO says despite the recessionary conditions its South African construction outlook remained positive.

Mike Wylie WHBOBuilding and civil engineering contractor Wilson Bayly Holmes-Ovcon ( WBHO), which yesterday posted a 27%increase in headline earnings per share to 1 605c for the year ended June, said that despite the recessionary conditions its South African construction outlook remained positive.However, the recession was showing in the group’s numbers, with its order book at the start of next year standing at R15,3bn, from R18,3bn a year ago.

Group turnover was 37% higher at R14,8bn, while its operating profit of R1bn was 16% up.

The operating margin slipped slightly, from 8,3% last year to 7,1%, reflecting the tighter conditions in the construction sector both at home and abroad.

But the group declared a final dividend of 200c, resulting in a total dividend for the year of 300c.

WBHO said it was well positioned to participate in the government’s spending on infrastructure and to secure work in the private market.

It said the decrease in funding available to clients and the strong cash position of the group would provide various opportunities to secure additional work in the future. “We continue to explore for opportunities outside the country, particularly in Africa and the United Arab Emirates,” chairman Mike Wylie said.

He warned that the procurement environment had become more difficult. Project finance was under pressure in both the public and private sectors, he said, and margins were tightening.

Nevertheless, he said the group had a “very” strong balance sheet, including R4bn in cash, and great client relations, and was well positioned to tackle the difficult times ahead.

“We are pleased and relieved to find that Australia is managing the financial crisis better than many other western countries and there are also signs that the resources market is improving,” he said.

Last year in July the group increased its holding in CECK, a civil engineering company operating in Perth, Australia, from 40% to 83% at a cost of R38,7m.

The company has since been consolidated as a subsidiary.

The group said profit for the period included in the group results amounted to R14m and goodwill amounted to R27m, which was raised on the transaction.

WBHO’s capital expenditure for the year amounted to R215m, which was 46% of the R466m approved at the beginning of the year and compares with capital expenditure of R439m the year before. The group had approved capital expenditure of R244m for the next financial year, which would be confined mainly to the replacement of plant.

As far as its divisions were concerned, the roads and earthworks division had an exceptional year with a 70% increase in turnover to R4,6bn.

The building and civil engineering division, which was more reliant on the private sector, had been negatively affected by the diminishing pool of development finance and the reduced global demand for commodities and resources. Nevertheless, the division increased its revenue to R10,2bn, with R4,7bn contributed by the Australian operation.

Last modified on Monday, 08 July 2013 19:57

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