Murray & Roberts sets sights on a new strategic future
27 February 2014
Johannesburg, 27 February 2014 – Murray & Roberts is pleased to announce its interim results for the six months ended 31 December 2013.
For the six months of Financial Year 2014, the Group generated revenue of R19 billion (December 2012: R16,3 billion) and reported attributable profit of R724 million (December 2012: R262 million). This significant growth was primarily recorded in discontinued operations which include profit on disposal of the Group’s construction products businesses. Diluted earnings per share was 175 cents (December 2012: 64 cents per share). Diluted headline earnings per share was 86 cents (December 2012: 69 cents per share) and diluted continuing headline earnings per share was 62 cents (December 2012: 44 cents) representing growth of 41%.The Group’s net cash position was R4,3 billion (2012: R1, 2 billion).
The Group’s order book moderately decreased to R44,9 billion (December 2012; R48,3 billion) which is considered to be a strong position given the continued softness in various of the Group’s markets.
Henry Laas, Group Chief Executive comments: “The Board is pleased with the Group’s improved financial position as reported for the first six months of the year and expects the earnings growth trend to continue in the medium-to long term. We are now in the final year of the three-year Recovery & Growth strategy, which returned the Group to profitability and established a foundation for the Group to grow.”
HEALTH AND SAFETY
The Board deeply regrets the death of two employees (December 2012: 0) who sustained fatal injuries while on duty and extends its heartfelt condolences to the families, friends and colleagues of the deceased. Unfortunately, two further fatal incidents occurred in the first two months of the calendar year.
For the period under review, the Group achieved a lost time injury frequency rate of 0.82 (December 2012: 0.85) which is better than the target of 0.9.
“The occurrence of fatal incidents, despite significant progress achieved in safety improvement programmes, deeply concerns the Board. We will continue to focus on operational discipline and entrenching safety management practices and procedures in order to prevent the occurrence of such tragedies,” comments Laas.
The Board rejects any form of anti-competitive behaviour in the Group. There are five remaining historical incidents of collusive conduct, excluded from the concluded Fast-Track Settlement Process, still to be settled with the Competition Commission.
Six former directors of subsidiary companies were implicated in the Competition Commission’s investigation. These persons are no longer employed by the Group; the last of whom left in 2010. Murray & Roberts has committed to take action against these former executives, which it is in the process of doing.
Current management is not implicated in any anti-competitive practices and has taken decisive steps to ensure that such practices will not be repeated.
GROUP MAJOR CLAIM PROCESSES
- Gautrain Delay & Disruption Claim – This is by far the largest element of the Gautrain claims. The legal process on this multi-billion rand claim is progressing. This is a very complex process and the claim is expected to be settled no sooner than 2016. Any award will attract interest dating from 2009 to the date of award.
- Gautrain Sandton Cavern Claim - The merits of this claim was ruled by the arbitrator in favour of the Bombela Civil Joint Venture in October 2013. The quantum hearing is scheduled for May 2015.
- Gautrain Water Ingress Dispute - In November 2013 an arbitration award was made in the Gautrain water ingress dispute between the Gauteng Province and the Bombela Concession Company. The Tribunal supported Province’s interpretation of the water ingress specification for the amount of ground water contractually allowed to drain through the Gautrain tunnel. A panel of technical experts and design consultants has been appointed to design a technical solution to the water ingress and the Bombela Civil Joint Venture should be in a position towards September 2014 to have a reasonable view of the potential cost and other implications of any remedial works.
Total uncertified revenue, largely represented by the Group’s outstanding major claims on Gautrain Delay & Disruption, GPMOF and Dubai International Airport, reduced to R1,8 billion (June 2013: R2,1 billion).
The Group’s uncertified revenue on the projects mentioned above is considerably lower than the estimated value of its claims.
A NEW STRATEGIC FUTURE
The Group successfully delivered its Recovery Year and has substantially achieved all of the strategic objectives that were set for its two Growth Years. The Group is developing its next strategic phase; A New Strategic Future. “The prime objective of this strategy is to optimise shareholder return by investing in specific growth market sectors and to expand the Group’s business into more profitable segments of the engineering and construction value chain,” concludes Laas.
*Please note that this media statement contains extracts from the full Reviewed Interim Results Announcement for the six months ended 31 December 2013 and should be read in conjunction with the full Reviewed Interim Results Announcement.
For further information contact:
Mr Ed Jardim
Group Communications Executive
Mobile +27 (0) 83 357 6282
Murray & Roberts Client Service
Tel: +27 (0)11 456 1144
Fax: +27 (0)86 637 0113
This media statement includes certain various “forward-looking statements” within the meaning of Section 27A of the US Securities Act 10 1933 and Section 21 E of the Securities Exchange Act of 1934 that reflect the current views or expectations of the Board with respect to future events and financial and operational performance. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements, including, without limitation, those concerning: the Group’s strategy; the economic outlook for the industry; use of the proceeds of the rights offer; and the Group’s liquidity and capital resources and expenditure. These forward-looking statements speak only as of the date of this media statement and are not based on historical facts, but rather reflect the Group’s current expectations concerning future results and events and generally may be identified by the use of forward-looking words or phrases such as “believe”, “expect”, “anticipate”, “intend”, “should”, “planned”, “may”, “potential” or similar words and phrases. The Group undertakes no obligation to update publicly or release any revisions to these forward looking statements to reflect events or circumstances after the date of this media statement or to reflect the occurrence of any unexpected events.
Neither the content of the Group’s website, nor any website accessible by hyperlinks on the Group’s website is incorporated in, or forms part of, this media statement.
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