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MUR
MUR
MUR - Murray & Roberts - Preliminary report for the year ended 30 June 2007
Murray & Roberts Holdings Limited
(Registration number: 1948/029826/06)
("Murray & Roberts" or "Group")
Share Code: MUR ISIN code: ZAE000073441
HIGHLIGHTS
OPERATING CASH INFLOW UP 224% TO R1,94 BILLION
FULL YEAR DIVIDEND UP 93% TO 116 CENTS PER SHARE
OPERATING PROFIT UP 100% TO R1,44 BILLION
CONTINUING REVENUES UP 61% TO R17,9 BILLION
HEADLINE EARNINGS UP 77% TO 325 CENTS PER SHARE
ORDER BOOK UP 125% TO R22,5 BILLION
8,0% OPERATING MARGIN, UP 23% FROM 6.5%
20,9% RETURN ON EQUITY, UP 25% FROM 16,7%
Murray & Roberts is a great company with committed leadership and people and we
have built a formidable performance platform to engage the future potential of
all our markets.
We consolidated our position as South Africa`s construction industry leader
during the year and entered the JSE Top 40 Index in May 2007. Our Group extended
its operations in all key sectors of the domestic market and we substantially
enhanced our focused international presence.
We secured a number of major projects in many of our operating environments,
which bodes well for the future performance of our Group. There is every
indication that demand for our products and services will remain buoyant for the
foreseeable future.
Our Stop.Think safety campaign has contributed to a reduction in our lost-time
injury frequency rate to our short term target of 3,0. However, serious
workplace incidents have not shown equivalent improvement which has prompted a
more rigorous regime of internal and independent review to secure our objective
of zero disabling incident.
The consolidation of Concor in the year and Clough from 1 July 2007 has provided
the impetus to treble our core revenues over the three year period 2006 to 2009.
Brian C Bruce
Group Chief Executive
Condensed consolidated income statement
for the year ended 30 June 2007 Restated
Audited Audited
Annual Annual
R millions 30.6.07 30.6.06
Revenue 17 873 11 098
Earnings before interest, exceptional 1 750 923
items, depreciation and amortisation
Depreciation (290) (188)
Amortisation of intangible assets (23) (16)
Earnings before interest and exceptional 1 437 719
items
Exceptional items (147) (78)
Headlease and other property activities1 14 4
(note 3)
Broad-based black economic empowerment - (80)
(BBBEE) expense
Impairment of Clough investment (115) -
Impairment of Borbet loan (48) -
Other 2 (2)
Earnings before interest and taxation2 1 290 641
Net interest income 21 36
Earnings before taxation 1 311 677
Taxation (360) (176)
Earnings after taxation 951 501
Share of (loss)/profit of associates (107) 1
Earnings from continuing operations 844 502
(Loss)/earnings from discontinued (48) 59
operations (note 2)
Earnings for the period 796 561
Attributable to:
Shareholders of the holding company 702 512
Minority shareholders 94 49
796 561
Earnings per share (cents)
- Diluted 235 165
- Basic 239 168
Earnings per share from continuing
operations (cents)
- Diluted 251 146
- Basic 255 150
Total dividend per ordinary share (cents)* 116 60
Operating cash flow per share (cents) 583 180
1 The headlease and other property
activities include the following:
Rental income 164 144
Interest expense (39) (49)
2 Includes interest expense of R39 million
(2006: R49 million)
in respect of the headlease and other
property activities
* Based on year to which dividend relates
SUPPLEMENTARY INCOME STATEMENT INFORMATION
Reconciliation of weighted average number
of shares in issue (000)
Weighted average number of ordinary shares 331 893 331 893
in issue
Less: weighted average number of shares (8 335) (12 139)
held by The Murray & Roberts Trust
Less: weighted average number of shares (676) -
held by Murray & Roberts Limited
Less: weighted average number of shares (28 953) (14 917)
held by the Letsema BBBEE trusts
Weighted average number of shares used for 293 929 304 837
basic per share figures
Add: dilutive adjustment for share options 4 326 5 081
Weighted average number of shares used for 298 255 309 918
diluted per share figures
Reconciliation of headline earnings
Earnings attributable to shareholders of 702 512
the holding company
Non-headline exceptional items 180 2
Loss/(profit) on disposal of discontinued 61 (16)
operations
Taxation on above adjustments 25 4
Headline earnings 968 502
Headline earnings per share (cents)
- Diluted 325 162
- Basic 329 165
Reconciliation of headline earnings excl
BBBEE expense
Headline earnings as above 968 502
BBBEE expense - 87
Taxation effect on BBBEE expense - (20)
Headline earnings excluding BBBEE expense 968 569
Headline earnings per share excluding
BBBEE expense (cents)
- Diluted 325 184
- Basic 329 187
Segmental analysis
EBIT before
exceptional Exceptional
R millions Revenue items items
30.6.07
Construction & engineering 11 822 756 (128)
Construction materials & 4 727 763 -
services
Fabrication & manufacture 1 324 83 -
Corporate - (165) (19)
Continuing operations 17 873 1 437 (147)
Discontinued operations 715 26 (61)
(note 2)
18 588 1 463 (208)
30.6.06 (Restated)
Construction & engineering 6 966 324 (60)
Construction materials & 3 205 479 (15)
services
Fabrication & manufacture 927 63 (4)
Corporate - (147) 1
Continuing operations 11 098 719 (78)
Discontinued operations 868 82 9
(note 2)
11 966 801 (69)
Note: With the disposal of Foundries, the Steel Fabrication business previously
reported under Construction Materials & Services have been included in the
Fabrication & Manufacture cluster with the prior year comparatives being
restated.
Condensed consolidated balance sheet
as at 30 June 2007 Restated
Audited Audited
Annual Annual
R millions 30.6.07 30.6.06
ASSETS
Non-current assets 4 175 3 589
Property, plant and equipment 2 011 1 714
Investment property 526 278
Goodwill 206 147
Other intangible assets 74 68
Deferred taxation assets 15 52
Associate companies 885 877
Other investments 440 435
Other non-current receivables 18 18
Current assets 8 836 6 796
Accounts receivable and other 2 625 2 110
Net amounts due from contract customers 3 402 2 878
Bank balances and cash 2 809 1 808
TOTAL ASSETS 13 011 10 385
EQUITY AND LIABILITIES
Total equity 3 815 3 194
Attributable to equity holders of the 3 637 3 086
holding company
Minority shareholders` interest 178 108
Non-current liabilities 1 103 1 027
Long-term provisions 64 22
Obligations under finance headleases* 78 155
Other long-term liabilities* 617 517
Other non-current liabilities 67 36
Deferred taxation liabilities 277 297
Current liabilities 8 093 6 164
Accounts payable and other 7 423 5 509
Bank overdrafts* 181 166
Short-term loans* 489 489
TOTAL EQUITY AND LIABILITIES 13 011 10 385
* Interest-bearing borrowings
SUPPLEMENTARY BALANCE SHEET INFORMATION
(R millions)
Net asset value per share (cents) 1 279 1 031
Commitments
Capital expenditure
- spent 1 008 294
- authorised but unspent 1 537 862
Operating lease commitments 460 136
Contingent liabilities 88 131
Financial institution guarantees 4 359 1 945
Condensed consolidated cash flow statement
for the year ended 30 June 2007 Restated
Audited Audited
Annual Annual
R millions 30.6.07 30.6.06
Cash generated by operations before 1 691 1 063
working capital changes
Cash outflow from exceptional items - (70)
relating to BBBEE
Cash outflow from headlease and other (115) (82)
property activities
Decrease/(increase) in working capital 637 (195)
Cash generated by operations 2 213 716
Interest and taxation (278) (118)
Operating cash flow 1 935 598
Dividends paid to shareholders of the (249) (154)
holding company
Dividends paid to minority shareholders (31) (29)
Cash flow from operating activities 1 655 415
Cash flow from investing activities (851) (356)
Property, plant and equipment and (968) (307)
intangible assets (net)
Business acquisitions /disposals(net) 93 (126)
Other investments (net) 10 73
Other (net) 14 4
Cash flow from financing activities 181 (183)
Net movement in borrowings 159 228
Treasury share disposal/(acquisition) 22 (411)
Net decrease/(increase) in cash and cash 985 (124)
equivalents
Net cash and cash equivalents at beginning 1 642 1 733
of period
Effect of foreign exchange rates 1 33
Net cash and cash equivalents at end of 2 628 1 642
period
Condensed statement of changes in equity
Other Hedging and
for the year ended 30 June 2007 Issued capital translation
R millions capital reserves reserves
Balances at 30 June 2005 1 425 33 17
Earnings attributable to
shareholders of the holding
company
Recognition of financial
instruments on acquisition of
businesses
Deferred taxation recognised
directly in equity
Earnings attributable to minority
shareholders
Purchase of minorities
Other movements in minority
interest
Movement in share-based payment 24
reserve
Foreign currency translation 83
movement on investments
Movement in treasury shares (411)
Dividend declared and paid
Balances at 30 June 2006 1 014 57 100
Earnings attributable to
shareholders of the holding
company
Movement in treasury shares 22
Recognition of hedging instrument (5)
on financial instruments
Earnings attributable to minority
shareholders
Other movements in minority
interest
Movement in share-based payment 20
reserve
Foreign currency translation 61
movement on investments
Dividend declared and paid
Balances at 30 June 2007 1 036 77 156
for the year ended 30 June 2007 Retained Minority
R millions earnings earnings Total
Balances at 30 June 2005 1 592 97 3 164
Earnings attributable to shareholders 512 512
of the holding company
Recognition of financial instruments on (29) (29)
acquisition of businesses
Deferred taxation recognised directly (1) (1)
in equity
Earnings attributable to minority 49 49
shareholders
Purchase of minorities (5) (14) (19)
Other movements in minority interest 5 5
Movement in share-based payment reserve 24
Foreign currency translation movement 83
on investments
Movement in treasury shares (411)
Dividend declared and paid (154) (29) (183)
Balances at 30 June 2006 1 915 108 3 194
Earnings attributable to shareholders 702 702
of the holding company
Movement in treasury shares 22
Recognition of hedging instrument on (5)
financial instruments
Earnings attributable to minority 94 94
shareholders
Other movements in minority interest 7 7
Movement in share-based payment reserve 20
Foreign currency translation movement 61
on investments
Dividend declared and paid (249) (31) (280)
Balances at 30 June 2007 2 368 178 3 815
Notes:
1. Basis of preparation
This preliminary report has been prepared and presented in accordance with
IAS34: Interim Financial Reporting, the Companies Act, No. 61 of 1973 (as
amended) and is derived from a set of Annual Financial Statements that are in
compliance with International Financial Reporting Standards (IFRS). The
accounting policies used in the preparation of these results are consistent in
all material respects with those used in the annual financial statements for the
year ended 30 June 2006 except for those listed below. The condensed financial
statements have been prepared under the historic cost convention, except for the
revaluation of certain investments and investment property.
There are no standards that are currently in issue but not yet effective which
would result in a change in accounting policy.
The Group`s 2007 annual financial statements were audited by the Group`s
external auditors, Deloitte & Touche, whose unqualified audit opinion is
available for inspection at the company`s registered office.
Change in accounting policy
During the year the company changed its accounting policy for the valuation of
investment property from depreciated historic cost to fair value. Management
judges that this policy provides reliable and more relevant information and is
in accordance with the international trends towards fair value accounting.
The effect of the change in accounting policy was as follows:
R millions 2007 2006
Decrease in depreciation costs - 4,9
Fair value adjustment 253 (4,9)
Taxation effect (25) -
Net increase in profit 228 -
2. Earnings from discontinued operations
On 31 March 2007 the Group disposed of its
Foundries business for R333 million. The
comparative numbers also include the
disposal of Criterion Equipment, a forklift
truck distribution business.
Restated
R millions 30.6.07 30.6.06
Earnings from the discontinued operations
are analysed
as follows:
(Loss)/profit on disposal/closure (61) 16
Earnings after taxation for the period 13 43
(48) 59
Earnings after taxation for the period is
analysed as follows:
Revenue 715 868
Earnings before interest and depreciation 68 123
Depreciation (42) (41)
Earnings before interest, exceptional items 26 82
and taxation
Exceptional items - (7)
26 75
Net interest expense (9) (15)
Earnings before taxation 17 60
Taxation (4) (17)
Earnings after taxation 13 43
Included in the 2007 cash flow statements
are the following which relates to the
discontinued operation:
R millions 2007 2006
Cash flow from operating activities (5) 88
Cash flow from investing activities (24) (65)
Cash flow from financing activities (39) 18
Net (decrease)/increase in cash and cash (68) 41
equivalents
The fair value of assets sold and
liabilities released are:
Net assets 555 132
Net liabilities (222) (39)
Proceeds received 333 93
Cash balances in business (1) (45)
332 48
3. Headlease and other property activities 14 4
Provision released to income statement - 14
Property fair value adjustment 253 -
Settlement of structured finance (261) (4)
liability
Other property activities 22 (6)
4. Post balance sheet event
The Group has reached agreement with Clough Limited ("Clough") and the Clough
Family (McRae) on a recapitalisation package, including support for strategic
vessel acquisition. Key aspects of the transaction are:
- The agreed price for the total transaction is AUD36.8 cents per share.
- McRae will sell to Murray & Roberts 3% of issued shares (15.3 million
shares).
- Murray & Roberts will underwrite a Rights Issue to raise about AUD40
million.
- McRae will cede all its Rights Issue rights in the AUD40 million raising to
Murray & Roberts and Murray & Roberts will take up its own rights
- McRae will sell its convertible notes to Murray & Roberts including the
outstanding coupons for AUD10.2 million.
The estimated total cash outflow is R290 million.
The consequence (where certain transactions are subject to Clough shareholder
approval) is that Murray & Roberts reaches more than 60% ownership in Clough
within 2 years. The Group will consolidate Clough into its accounts from 1 July
2007.
Executive Summary
On behalf of the Directors, we are pleased to announce a final dividend of 71
cents per share (2006: 40 cents per share) increasing the total dividend for the
full year by 93% to 116 cents per share (2006: 60 cents per share). Attention is
drawn to the formal dividend announcement contained herein.
Operating cash inflow is up 224% at R1,94 billion (2006: R598 million) for the
year with a year-end net cash position of R2,6 billion (2006: R1,6 billion)
after net capital expenditure of R1,0 billion (2006: R338 million) and a net
inflow of R93 million (2006: R126 million outflow) arising from acquisitions and
disposals. The R637 million decrease in working capital (2006: R195 million
increase) reflects improved payments in Middle East and advance payments on
major projects.
Shareholders are reminded that diluted headline earnings per share is compared
to 184 cents for the year to 30 June 2006 which excluded an R87 million charge
to the income statement (22 cents) relating to the granting of shares to almost
14000 employees in terms of the Group`s Broad Based Black Economic Empowerment
(BBBEE) transaction in that year.
Headline earnings of 325 cents per share is up 77% on the previous year at the
top-end of recent guidance offered to the market and ahead of the prospects
statements included in the 2006 Annual Report and 2007 Interim Report. Headline
earnings per share has been negatively impacted by 38 cents as a result of the
loss recorded by associate company Clough in providing for finalisation of
legacy projects secured pre-acquisition to the Group.
Operating profit increased 100% to R1,44 billion (2006: R719 million) on a 61%
increase in continuing revenues to R17,9 billion (2006: R11,1 billion). The
operating margin of 8,0% (2006: 6,5%) is the highest ever recorded by Murray &
Roberts and has moved ahead of the strategic range of 5,0% to 7,5% established
for Rebuilding Murray & Roberts.
During the year the price of the Group`s share on the JSE Limited (JSE)
increased 150% from 2540 cents to 6400 cents peaking more than 200% up at 8150
cents in July 2007. The Group entered the JSE Top 40 Index on 7 May 2007 and has
subsequently become the largest company by market capitalisation in its sector.
Shareholder Funds increased 18% to R3,6 billion and a return of 20,9% (2006:
16,7%) on average shareholder funds in the year exceeds the strategic Group
target of 20%, despite the currently underperforming investment in Clough.
An amount of R290 million in cash plus balance sheet support has been committed
to the recapitalisation of Clough and to increase the Group`s shareholding above
60%.
Interest-bearing long term liabilities increased slightly to R695 million (2006:
R672 million). These primarily relate to working capital loans into Clough and
Cementation Canada and instalment sales agreements in Concor.
Market
The year under review saw continued growth in levels of activity from all the
Group`s regional and sectoral markets. The South African government has targeted
Gross Fixed Capital Formation (GFCF) at 25% of Gross Domestic Product (GDP) by
2014 in an economy growing at between 4,5% and 6,0% per annum. Construction
Spend, which is nominally targeted at a third of GFCF, this year breached 5% of
GDP on its way to an estimated high of about 10% by 2011, which is up from a low
of about 2,5% in 2000. This implies a potential nominal market growth in the
range 15% to 25% per annum for the foreseeable future.
All markets targeted by the Group continue to promise sustainable growth
potential and in particular, major project opportunity. There is strong evidence
of capacity constraints in the sector resulting in a welcome reduction in the
high levels of destructive price competition that had become a worldwide
characteristic of the industry through the 1990`s.
In South Africa, interest rate increases have started to dampen consumer
appetite for credit and the housing sector has felt a lowering in demand growth.
Government`s promised investment into primary economic infrastructure has
started to deliver the level and nature of major project opportunity
specifically attractive to the Group.
Global socio-economic growth and development, driven primarily from Asia,
continues to place increased demand into the natural resources sector.
Indications are that demand growth will continue for the foreseeable future
before reaching a new sustainable level.
As a consequence, the Group`s resources-driven international markets have
remained positive with countries forming the Gulf Cooperative Council in the
Middle East continuing to invest the free cash flow benefit of strong oil
revenues into the extension of their regional economic infrastructure. The
Canadian and Australian mining contracting markets have also continued to offer
growth and conditions in the global oil & gas sector remain buoyant, which bodes
well for the future performance of Australian subsidiary Clough.
Order Book
The Group`s project order book stood at R22,5 billion at 1 July 2007 (2006:
R10,0 billion), an increase of 125% in the year and up from R15 billion at half-
year. This includes R5,0 billion (AUD810 million) derived through the
consolidation of Clough.
The order book comprises Construction Middle East at R2,2 billion (R2,3
billion); Construction SADC at R8,5 billion (R3,8 billion); Mining SADC at R3,3
billion (R2,6 billion); Resources Global (including Clough) at R6,6 billion
(R0,5 billion); and Engineering Contracting at R1,6 billion (R0,7 billion). The
amounts in brackets are the comparative levels at 30 June 2006. The regional
order book is SADC 58% (71%); Middle East 13% (23%); Australasia 24% (1%) and
North America 5% (5%).
During the year the Group became a key participant in some high-profile projects
including the R24 billion Gautrain Rapid Rail Link; the R3,0 billion Greenpoint
Stadium for the 2010 Soccer World Cup; the R21 billion Coega Aluminium Smelter
for Alcan; and secured a partnership with Dubai Holdings owned Sama Dubai for
managing the implementation of about R60 billion of its investment program.
A number of Group companies have combined their strengths and capabilities and
together with international and local partners as appropriate are ready to
pursue the significant power station build program developing in Southern
Africa. Murray & Roberts is well positioned to play a key role in the long-term
implementation of this program, building on the experience of various companies
acquired over the past two decades such as Genrec, Gillis Mason and Concor, all
of which played a key role in the previous power station build program.
Activity levels in the Group`s construction materials and services companies
remain high, supporting a positive future outlook for performance delivery. The
inclusion of Concor Technicrete has enhanced the Group`s market presence in this
sector.
Two contracts to build and supply more than 150 locomotives to Spoornet in South
Africa will bear fruit in the coming year and there are plans for further
upgrade and renewal of the total rolling stock asset in the region. The UCW
order book stood at R2,6 billion at year-end.
Operations
The Group`s Southern Africa regional construction activities including new
acquisition Concor recorded revenues up 138% at R5,0 billion (2006: R2,1
billion) and delivered operating profits of R328 million (2006: R35 million) at
a margin of 6,6% (2006: 1,7%). This includes a positive R76 million contribution
arising from a fair value adjustment on concession investments (2006: R68
million), but excludes recoveries of R26 million from various problem projects
reported in the previous financial year.
There has been a welcome but still incomplete turnaround in Murray & Roberts
Construction under new leadership and Concor delivered a maiden contribution
well ahead of expectation.
Middle East construction recorded increased revenues of R2,4 billion (2006: R1,6
billion) and delivered an operating profit of R123 million (2006: R77 million)
at a margin of 5,1% (2006: 4,8%). The Dubai International Airport project is a
significant contributor to this performance, with handover of the facility
proceeding to schedule. This complex and demanding project has placed a great
deal of strain on our people, partners and cash flow, characterised through
information delays, long and arduous working hours and conditions, resource
constraints and late payment authorisations. Its success is testimony to the
quality of our project leadership and corporate support, both so necessary for
major project engagement.
Engineering contracting and services operations experienced mixed conditions in
the year with revenues of R794 million (2006: R611 million) delivering operating
profits of R46 million (2006: R48 million) at a margin of 5,8% (2006: 7,9%).
This includes a maiden contribution from Wade Walker in the second half-year. An
excellent performance from engineering services was offset by major project and
third party capacity related delay costs in the power generation and industrial
contracting sector.
Mining contracting operations in South Africa, Australia and Canada recorded
revenues of R3,6 billion (2006: R2,7 billion) and an operating profit of R233
million (2006: R164 million) at a margin of 6,5% (2006: 6,1%). The South African
operation experienced the start of disruptive industrial action in the year,
while international mining markets continued to deliver strong growth.
The Group`s construction materials and services companies have delivered
exemplary performance again this year off improved levels of gross fixed
investment in Southern Africa and Middle East.
Reinforcing steel construction products and trading services increased revenues
33% to R2,2 billion (2006: R1,7 billion) at an operating profit of R168 million
(2006: R127 million).
Concrete and Asphalt infrastructure products increased revenues 27% to R1,24
billion (2006: R980 million) at an operating profit of R302 million (2006: R218
million).
Clay, steel and concrete building products delivered revenues of R856 million
(2006: R325 million) at an operating profit of R160 million (2006: R63 million).
This includes a maiden contribution from Concor Technicrete.
Specialist services to the construction and infrastructure sector delivered an
operating profit of R133 million (2006: R71 million) on revenues of R411 million
(2006: R235 million). This includes an increasing exposure to the strong Middle
East market.
Following disposal of the Group`s foundry businesses in the year, the operations
of Genrec, Hall Longmore and UCW have been incorporated into a steel fabrication
segment, which recorded increased revenues 43% up to R1,3 billion (2006: R927
million) at an operating profit of R83 million (2006: R63 million).
Corporate overheads increased marginally to R144 million (2006: R140 million)
in the year, excluding a charge of R21 million (2006: R7 million) relating
to share-based payments accounted for in terms of IFRS 2. Corporate capacity
plays an increasing and important role engaging risk mitigation in the Group`s
major project and diverse geographic operations.
Clough Limited
Murray & Roberts has recorded an associate loss of R114 million from its 49,1%
investment in Australia-based Clough Limited. This arises from a provision of
AUD131 million raised by Clough against the future completion of the G1 project
in India and final settlement of the BassGas dispute in Australia. This
provision has contributed to an attributable loss in the company of AUD105,3
million (2006: AUD15,1 million loss).
Excluding the provision, ongoing operations in Clough delivered an attributable
profit of AUD25,4 million on turnover of AUD761 million in the year.
The Group reviewed its investment in Clough following three years of losses
including the significant provision this year. An impairment has been taken as
an exceptional item that appropriately reduces the Group`s holding cost in the
company.
Murray & Roberts will consolidate Clough into its accounts from 1 July 2007 and
has undertaken to underwrite a recapitalisation and support package for the
company. Subject to Clough shareholder approval, the Group will consequently
hold above 60% of the shares in Clough at an average price of AUD0,46 cents per
share. The Clough Board is being restructured under the independent chairman; a
new managing director with global oil & gas engineering and contracting
experience has been appointed; and the Group`s Australian chief executive
resumes his role as a non-executive director of the company.
Full details on the Clough financial results for the year to 30 June 2007 and
its prospects statement are available on www.clough.com.au
Exceptional Items
A loss of R103,4 million arose from the final disposal of the Group`s automotive
interests and a balance sheet impairment of R115 million was taken against the
Group`s investment in Clough.
Potential liabilities associated with the Group`s property headlease structures
have been resolved. The cost of the settlement was offset by a fair value
adjustment on property assets.
Black Economic Empowerment
The Group has continued to build its broad-based black economic empowerment
(BBBEE) capability, with formal measures and regular reporting in place to
ensure appropriate focus. An independent audit of the Group`s BBBEE status was
conducted in the year, confirming an effective empowerment ownership of 25,83%.
Total economic value created for an estimated 20000 employees and community
participants in the share-based ownership and trust scheme has exceeded R1,5
billion in just 18 months.
Acquisitions and Disposals
The capitalisation of Clough in December 2006 required an investment of AUD23,2
million, and the Group increased its shareholding by 3,0% to 49,1% at a cost of
AUD6,3 million.
An 80% stake in specialist contractor Wade Walker was acquired effective January
2007 for the sum of R68 million. The company is performing ahead of expectation
and contributes to the Group`s engineering capability in the mining, industrial
and power sector.
The remaining 50% held by the Group in Borbet Africa was sold in the first half-
year, followed by the disposal of the foundries businesses, which had been part
of the Group for 25 years.
Murray & Roberts continues to seek acquisition opportunities that will serve to
enhance its existing market presence. All existing businesses are reviewed on a
regular basis to ensure they are either aligned to the Group`s strategic and
performance objectives, or that they fall within the general competence of Group
leadership.
Health Safety and Environment
The declared objective of Group leadership is zero fatalities and disabling
injuries on work sites and facilities under control of the Group. Regrettably,
11 people (2006: 10 people) were fatally injured on Murray & Roberts worksites
in a year where 172 million hours (2006: 116 million hours) were recorded as
worked. Of the fatalities 18% (2006: 50%) were employees of business partners.
The Stop.Think safety campaign has enhanced behavioural awareness across the
Group and the Lost Time Injury Frequency Rate (LTIFR) of 3,0 (2006: 4,6) meets
the Group`s medium-term target. The Group`s long-term LTIFR target of 1,0 will
demand significant management attention to the cultural challenges that
influence the change in attitude needed for sustainable HSE success.
A risk-based HIV/AIDS Policy Framework has been agreed for implementation across
the Group, while work-related health issues such as airborne and noise pollution
have been mapped and are being addressed.
A study into the Group`s carbon footprint has been initiated that will guide new
levels of investment or disinvestment in the context of the global climate
change challenge.
Prospects and Trading Statement
Murray & Roberts believes that profitable opportunity drives capacity and that
industry sector leaders play a key role in this process. The Directors have
approved a number of investment initiatives driven by management that will
enhance Group and industry capacity to meet the complex and growing demands of
the market over the foreseeable future.
Reviewing past Annual Reports of the Group, there seems little that has changed
from the period 40 years ago in 1967 when the critical mass of the Group was
enhanced through the merger of Roberts Construction and Murray & Stewart, and 30
years ago in 1977 when fixed investment in South Africa commenced its 25 year
period of decline. Yet Murray & Roberts in particular and the industry in
general rose to the challenge at the time and delivered significant world class
economic infrastructure through a period of resource and skills deficit.
This was a period when many people still in the industry, started their careers.
But as it was in 1967, critical mass remains an important differentiator for
success in a market where major and complex projects become the order of the
day. Global scale for global projects and investment programs remains a
challenge in our industry sector, where the majority of players are small
relative to risk and impediments to consolidation on a national level are high.
Fully diluted headline earnings per share after consolidation of Clough is
expected to grow between 30% and 40% in the year ahead, supported by ongoing
market related growth.
This Trading Statement has not been audited or reviewed and is provided in terms
of paragraph 3.4(b) of the JSE Listings Requirements.
On behalf of the directors
Roy Andersen Brian Bruce Roger Rees
Chairman of Group Chief Group Financial
the Board Executive Director
Bedfordview
29 August 2007
Notice to Shareholders
Declaration of final ordinary dividend (No. 111)
Notice is hereby given that the final dividend, dividend No. 111 of 71 cents per
share in respect of the financial year ended 30 June 2007 has been declared
payable to shareholders recorded in the register at the close of business on
Friday 19 October 2007.
The salient dates for the final ordinary dividend are as follows:
Last day to trade cum the dividend Friday, 12 October 2007
Shares commence trading ex dividend Monday, 15 October 2007
Record date Friday, 19 October 2007
Payment date Monday, 22 October 2007
Share certificates may not be dematerialised or re-materialised between Monday
15 October 2007 and Friday 19 October 2007, both days inclusive.
On Monday 22 October 2007 the dividend will be electronically transferred to the
bank accounts of all certificated shareholders where this facility is available.
Where electronic fund transfer is not available or desired, cheques will be
dated and posted on 22 October 2007.
Dematerialised shareholder accounts will be credited at their CSDP or broker on
Monday 22 October 2007.
By order of the Board
Y Karodia
Group Secretary
Bedfordview
29 August 2007
Murray & Roberts Holdings Limited Registration No. 1948/029826/06
Directors:
RC Andersen* (Chairman) BC Bruce (Managing & Group Chief Executive) SJ Flanagan
SE Funde* NM Magau* JM McMahon* IN Mkhize* RW Rees1 AA Routledge* MJ Shaw* KE
Smith2 JJM van Zyl* RT Vice*
1 British 2 Irish *Non executive
Secretary:
Y Karodia
Registered office: Registrar:
Douglas Roberts Link Market Services South Africa
Centre, (Pty) Limited
22 Skeen Boulevard, 11 Diagonal Street, Johannesburg
Bedfordview 2001
PO Box 1000
Bedfordview 2008
Date: 29/08/2007 17:30:24 Produced by the JSE SENS Department.
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