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Murray and Roberts earnings 200c vs 302c

Posted On Thursday, 25 February 2010 02:00 Published by Commercial Property News
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Murray and Roberts has reported headline earnings per share of 200c for the 6 months ended December 31, 2009, from 302c previously.

Brian Bruce Murray and RobertsConstruction group Murray and Roberts on Wednesday reported headline earnings per share of 200 cents for the 6 months ended December 31, 2009, from 302 cents previously.

The group reported diluted earnings per share of 194 cents, from 301 cents earlier.

It brought in revenue of R16 billion, from R17.6 billion previously, while the operating profit for the period was 918 million rand at a margin of 5.7%, including a revenue deferment of R285 million in the period.

Murray & Roberts reported an interim dividend of 52 cents per share, from 85 cents previously.

The group said its order book increased 10% to R44 billion.

It said that in the 5 years between 2004 and 2009, revenue has grown by about 300% and operating profit by almost 600%.

"However, the global economic crisis has taken its toll on the Group, last year on its order book and this year on working capital as well as the financial performance of some operations.

"The Group is well diversified between domestic and international markets, but with an order book that is heavily weighted to domestic major long-term public sector projects," Murray and Roberts said.

It noted that its performance in the current financial year was being impacted by a number of factors outside the control of the Group, including reduced industrial and mining activity; limited private sector commercial investment; delays to the Eskom power program; delay and disruption to the Gautrain Project; trading conditions in the steel reinforcing sector; ongoing strength of the SA rand; and costs of financing increased working capital.

"The directors have considered the potential impact of the above on the performance and prospects of the Group and have decided that to increase the level of uncertified revenues will increase the future risk profile of the balance sheet.

"It has therefore been decided to defer some revenue entitlement in the period under review," The group said.

Murray and Roberts pointed to its order book at R44 billion at 31 December 2009 from a consistent level of about R40 billion between March 31, 2009 and September 30, 2009.

"This is down 27% from the R60 billion recorded at 31 December 2008, as a consequence of the global economic crisis," it said.

The South African construction economy has slowed over the period under review with much of the construction for the 2010 FIFA World Cup reaching conclusion.

There is ongoing activity in the road and transportation construction and power sectors but even here, there have been delays with current contracts, in new contract awards and with
certification of payments.

There is currently very little private sector contribution into the construction economy.
The South African government has reiterated its commitment to the long-term renewal and growth of the nation's infrastructure.

This is of such importance to the future socio-economic development of the country and region that to fund the program, Treasury will increase national debt to 40% of Gross Domestic Product (GDP) and has committed to increase levels of Public Private Partnership in the economy.

Looking ahead Murray and Roberts pointed to a global presence and reputation that enables access to significant opportunity and the leadership, partners, resources and skills needed to meet the challenging delivery expectations of an ever-developing market.

"The group's significant Order Book in South Africa includes a number of long-term major projects that will deliver better value in future years.

"Generally, market conditions are muted and characterised by increased levels of competition," it said.

"The Group is well advanced with the disposal of non-core assets including most of its Properties and Concession assets by way of separate transactions with a combined value of almost R1 billion, and has plans for further disposals during the year ahead.

"This will relieve domestic debt and open the opportunity for the acquisition of new core assets to enhance the Group's strategic business model," it continued.

Murray and Roberts said a key objective for the period ahead was to pursue the resolution of contract and cash entitlements on three major projects:

  • Dubai International Airport - final account;
  • Gautrain Rapid Rail - delay and disruption claims; and
  • Medupi and Kusile Mechanicals - change in scope variations.

However, it said diluted headline earnings per share and diluted earnings per share for the financial year to 30 June 2010 should be between 30% and 40% lower than the previous financial year to 30 June 2009.

The group report four fatalities in its South African operations for the period, the same number as the previous period.

"Two fatalities were fall-from-height on construction sites and two were underground incidents in the mining sector," it said.

"The total number of employees in the Group has remained stable in the 6 months since June 2009.

"There has been a small net increase in South Africa offset by a net decrease in Australia, Canada and Middle East," Murray and Roberts said.

At 4.18pm, Murray and Roberts had shed 35 cents, or 0.88%, to R39.54 on the JSE.

Last modified on Friday, 21 June 2013 20:36

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