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MUR
MUR
MUR - Murray & Roberts Holdings Limited - Preliminary report for the year ended
30 June 2008
Murray & Roberts Holdings Limited
(Registration number: 1948/029826/06)
("Murray & Roberts" or "Group")
Share Code: MUR ISIN code: ZAE000073441
PRELIMINARY REPORT
for the year ended 30 June 2008
Highlights
Order book up by 144% to R55 billion
Attributable earnings up by 144% to R1,7 billion
Headline earnings up by 69% to 550 cents per share
Operating profit up by 63% to R2,4 billion
Revenue up by 57% to R27,9 billion
Operating cash inflow up by 61% to R3,1 billion
Final dividend up by 68% to 119 cents per share
8,6% Operating margin up from 8,2%
40,3% Return on Average Equity up from 20,9%
Condensed consolidated income statement
for the year ended 30 June 2008
Audited Audited
Annual Annual
R millions 30.6.08 30.6.07
Revenue 27 896 17 815
Earnings before interest, exceptional 3 051 1 778
items, depreciation and amortisation
Depreciation (615) (287)
Amortisation of intangible assets (39) (23)
Earnings before interest and exceptional 2 397 1 468
items
Exceptional items (note 7) 145 (168)
Earnings before interest and taxation 2 542 1 300
Net interest income/(expense) 16 (16)
Earnings before taxation 2 558 1 284
Taxation (529) (352)
Earnings after taxation 2 029 932
Profit/(loss) from associates 11 (107)
Earnings from continuing operations 2 040 825
Profit/(loss) from discontinued operations 24 (29)
(note 3)
Earnings for the period 2 064 796
Attributable to:
Shareholders of the holding company 1 714 702
Minority shareholders 350 94
2 064 796
Earnings per share (cents)
- Diluted 565 235
- Basic 577 239
Earnings per share from continuing
operations (cents)
- Diluted 557 245
- Basic 569 249
Total dividend per ordinary share (cents)* 196 116
Operating cash flow per share (cents) 939 583
* 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 (5 333) (8 335)
held by The Murray & Roberts Trust
Less: weighted average number of shares (676) (676)
held by Murray & Roberts Limited
Less: weighted average number of shares (28 946) (28 953)
held by the Letsema BBBEE trusts
Weighted average number of shares used for 296 938 293 929
basic per share figures
Add: dilutive adjustment for share options 6 370 4 326
Weighted average number of shares used for 303 308 298 255
diluted per share figures
Headline earnings per share (cents)
- Diluted 550 325
- Basic 562 329
Segmental analysis
R millions Revenue Earnings Exceptional
before items
interest
and
exceptional
items
30.6.08
Construction & Engineering 20 363 1 452 203
Construction Materials & 5 838 901 33
Services
Fabrication & Manufacture 1 582 177 -
Corporate & Properties 113 (133) (91)
Continuing operations 27 896 2 397 145
Discontinued operations (note 3) 279 34 -
28 175 2 431 145
30.6.07
Construction & Engineering 11 821 756 (128)
Construction Materials & 4 508 735 -
Services
Fabrication & Manufacture 1 323 83 -
Corporate & Properties 163 (106) (40)
Continuing operations 17 815 1 468 (168)
Discontinued operations (note 3) 937 54 (61)
18 752 1 522 (229)
Condensed consolidated balance sheet
as at 30 June 2008
Audited Audited
Annual Annual
R millions 30.6.08 30.6.07
ASSETS
Non-current assets 5 533 4 175
Property, plant and equipment 3 694 2 011
Investment property 482 526
Goodwill 488 206
Other intangible assets 90 74
Deferred taxation assets 208 15
Associate companies 13 885
Other investments 518 440
Other non-current receivables 40 18
Current assets 15 861 8 813
Accounts receivable and other 4 710 2 602
Net amounts due from contract customers 6 462 3 402
Cash and cash equivalents 4 689 2 809
Non-current assets held for sale 256 23
TOTAL ASSETS 21 650 13 011
EQUITY AND LIABILITIES
Total equity 5 825 3 815
Attributable to shareholders of the holding 4 864 3 637
company
Minority shareholders` interest 961 178
Non-current liabilities 1 290 1 103
Long-term provisions 102 64
Obligations under finance headleases* 53 78
Other long-term liabilities* 751 617
Other non-current liabilities 178 67
Deferred taxation liabilities 206 277
Current liabilities 14 466 8 093
Accounts payable and other 9 293 5 569
Amounts due to contract customers 3 953 1 854
Bank overdrafts* 411 181
Short-term loans* 809 489
Non-current liabilities held for sale 69 -
TOTAL EQUITY AND LIABILITIES 21 650 13 011
* Interest-bearing borrowings
SUPPLEMENTARY BALANCE SHEET INFORMATION
(R millions)
Net asset value per share (cents) 1 466 1 096
Commitments
Capital expenditure
- spent 1 774 1 009
- authorised but unspent 2 779 1 537
Operating lease commitments* 2 528 460
Contingent liabilities 176 88
Financial institution guarantees** 9 827 4 359
* Increase relates to first time consolidation
of Clough Limited
** Increase relates to guarantees given on
Medupi and Kusile projects
Condensed consolidated cash flow statement
for the year ended 30 June 2008
Audited
Audited
Annual Annual
R millions 30.6.08
30.6.07
Cash generated by operations before working 3 221 1 691
capital changes
Cash outflow from headlease and other property (75) (115)
activities
Decrease in working capital 445 637
Cash generated by operations 3 591 2 213
Interest and taxation paid (475) (278)
Operating cash flow 3 116 1 935
Dividends paid to shareholders of the holding (455) (249)
company
Dividends paid to minority shareholders (70) (31)
Cash flow from operating activities 2 591 1 655
Cash flow from investing activities (747) (851)
Property, plant and equipment and intangible (1 666) (968)
assets (net)
Cash flow from consolidation of Clough Limited 590 -
Business disposals/acquisitions (net) 262 93
Other investments (net) 30 10
Other (net) 37 14
Cash flow from financing activities (263) 181
Net movement in borrowings (303) 159
Net movement on issue of shares by subsidiary 108 -
Treasury share acquisitions/disposals (net) (68) 22
Net increase in cash and cash equivalents 1 581 985
Net cash and cash equivalents at beginning of 2 628 1 642
period
Effect of foreign exchange rates 69 1
Net cash and cash equivalents at end of period 4 278 2 628
Condensed consolidated statement of changes in equity
for the year ended 30 June 2008
R millions Issued Other Hedging
capital capital and
reserves translation
reserves
Balances at 30 June 2006 1 014 57 100
Hedging reserves on financial - - (5)
instruments
Other movements in minority - - -
interest
Movement in treasury shares 22 - -
Movement in share-based payment - 20 -
reserve
Foreign currency translation - - 61
movement on investments
Earnings attributable to - - -
shareholders of the holding
company
Earnings attributable to - - -
minority shareholders
Dividend declared and paid - - -
Balances at 30 June 2007 1 036 77 156
Transfer from non-distributable - (2) -
reserves
Hedging reserves on financial - - 5
instruments
Purchase/disposal of minorities - - -
(net)
Other movements in minority - - -
interest
Movement in treasury shares (68) - -
Movement in share-based payment - 48 -
reserve
Foreign currency translation - - 52
movement on investments
Earnings attributable to - - -
shareholders of the holding
company
Earnings attributable to - - -
minority shareholders
Dividend declared and paid - - -
Balances at 30 June 2008 968 123 213
Retained Total
earnings Minority
interest
R millions
Balances at 30 June 2006 1 915 108 3 194
Hedging reserves on financial - - (5)
instruments
Other movements in minority - 7 7
interest
Movement in treasury shares - - 22
Movement in share-based payment - - 20
reserve
Foreign currency translation - - 61
movement on investments
Earnings attributable to 702 - 702
shareholders of the holding
company
Earnings attributable to - 94 94
minority shareholders
Dividend declared and paid (249) (31) (280)
Balances at 30 June 2007 2 368 178 3 815
Transfer from non-distributable 2 - -
reserves
Hedging reserves on financial - - 5
instruments
Purchase/disposal of minorities (69) 394 325
(net)
Other movements in minority - 12 12
interest
Movement in treasury shares - - (68)
Movement in share-based payment - - 48
reserve
Foreign currency translation - 97 149
movement on investments
Earnings attributable to 1 714 - 1 714
shareholders of the holding
company
Earnings attributable to - 350 350
minority shareholders
Dividend declared and paid (455) (70) (525)
Balances at 30 June 2008 3 560 961 5 825
Notes:
1. Basis of preparation
This preliminary report has been prepared and presented in accordance with IAS
34: Interim Financial Reporting, Schedule 4 of 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 prior year. The condensed financial
statements have been prepared under the historic cost convention, except for the
revaluation of certain investments and investment property.
The Group`s 2008 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.
2. Adoption of new accounting standards
During the current year the Group adopted IFRS 7: Financial Instruments:
Disclosure, which is effective for annual reporting periods beginning on or
after 1 January 2007 and the consequential amendments to IAS 1: Presentation of
Financial Statements. Restatement of comparatives was not required as these
statements deal with disclosure requirements.
3. Profit/(loss) from discontinued operations
Harvey Roofing Products (Proprietary) Limited was disposed effective 31 July
2008, for a consideration of R106 million, and has been accounted for as a
discontinued operation at 30 June 2008. The prior year includes the disposal of
the Group`s Foundries business on 31 March 2007. Earnings from discontinued
operations are analysed as follows:
R millions 30.6.08 30.6.07
Revenue 279 937
Earnings before interest and taxation 34 54
Net interest expense (1) (10)
Taxation (9) (12)
Loss on disposal of business - (61)
Profit/(loss) from discontinued operations 24 (29)
4. Acquisitions
Clough Limited (Clough), which was previously accounted for as an associate, is
consolidated for the first time as the Group acquired control over the company
on 1 July 2007. Clough contributed revenue of R4,9 billion and attributable
profit of R241 million. The impact of consolidating Clough for the first time is
as follows:
R millions 30.6.08 30.6.07
Net assets 3 167 -
Net liabilities (2 788) -
Clough minorities (111) -
Fair value of assets consolidated 268 -
Minority interest on consolidation (135) -
Decrease in investment in associates (623) -
Exchange rate adjustments 194 -
Goodwill recorded on consolidation (296) -
During the year the investment in Clough increased as a result of a further
acquisition by the Group with partial dilution of minorities exercising
convertible options. As a consequence, the shareholding in Clough increased from
49,1% to 55,9%. The impact of this is as follows:
Increase in goodwill taken to distributable 76 -
reserves
Increase in minorities 146 -
The goodwill is attributable to the high profitability of the acquired business.
5. Disposals
Clough Limited disposed of its 50% interest in jointly controlled entity Shedden
UHDE (Proprietary) Limited on 31 December 2007 and wholly owned subsidiary
Clough Engineering & Maintenance (Proprietary) Limited effective 24 January
2008. These disposals where not considered to be discontinued operations. The
prior year includes disposals of the Group`s Foundries business during March
2007. The fair value of assets sold and liabilities released were:
R millions 30.6.08 30.6.07
Total assets 260 550
Total liabilities (115) (155)
Profit/(loss) on disposal 214 (61)
Total proceeds on disposal 359 334
Less: Cash balances in business disposed (99) (1)
260 333
6. Reclassification
During the year the Group reclassified the accounting for its property division
from exceptional items to normal trading activities as a result of settlement of
the headlease structured liability that existed over these properties. The
impact of the property reclassification is as follows:
R millions 30.6.08 30.6.07
Revenue 113 163
Earnings before interest, exceptional items 57 59
and taxation
Exceptional items 2 (21)
Interest expense (16) (38)
7. Exceptional items
R millions 30.6.08 30.6.07
Property fair value adjustment 2 253
Settlement of structured finance liability - (260)
Profit on disposal of subsidiary 214 -
Profit on disposal of land and buildings 43 -
Impairment of investments and goodwill (111) (163)
Other (3) 2
145 (168)
8. Reconciliation of headline earnings
R millions 30.6.08 30.6.07
Earnings attributable to shareholders of 1 714 702
the holding company
Revaluation of investment property (2) (253)
Re-measurement of liability on investment - 272
property
(Profit)/loss on disposal of subsidiary (214) 61
Profit on disposal of land and buildings (43) -
Impairment of investments 101 163
Impairment on goodwill 10 -
Other - (2)
Taxation effect on above adjustments 11 25
Minority interest on above adjustments 92 -
Headline earnings 1 669 968
9. Post balance sheet event
The Federal Court of Australia dismissed Clough`s appeal against an earlier
decision to lift an interim injunction relating to the G1 Development project in
India which prohibited encashment of performance guarantee bonds amounting to
U$21,5 million. Payout of the bond has occurred and Clough maintains its
previous guidance on this matter that no change in accounting position is
required. Clough is committed to continue the pursuit of its rights under the
contract as it continues to seek a negotiated settlement with ONGC.
For the first time in more than a quarter century, Gross Fixed Capital Formation
(GFCF) has taken centre stage in defining the future economy of many developing
nations, including South Africa. "The build-out of the developing world, as it
closes the infrastructure gap with the developed world, will probably be the
most important theme in global investments for the coming decade" cites a recent
investment report.*
Murray & Roberts has more than trebled in size over the past three to four
years, having previously divested all its underperforming and non-strategic
businesses and acquired new construction industry capacity in Cementation,
Concor and Clough and more recently, Ocon Brick and Wade Walker.
For South Africa to succeed and provide quality of life for all its people, it
is essential for significant new fixed investment to be made in critical
infrastructure for Transport & Logistics; Power & Energy; Water & Sanitation;
Telecommunications; Health & Education and Accommodation & Facilities.
Murray & Roberts has developed a formidable performance platform and capacity to
embrace the growth challenge offered by investment into these markets and its
growing international operations.
Brian C Bruce - Group Chief Executive
* Analyst Equities Report
Executive Summary
The Directors are pleased to declare a final dividend of 119 cents per share
(2007: 71 cents per share) increasing the total dividend for the full year by
69% to 196 cents per share (2007: 116 cents per share). Attention is drawn to
the formal dividend announcement contained herein.
Operating cash inflow is up 61% at R3,12 billion (2007: R1,94 billion) for the
year with a year-end net cash position of R4,3 billion (2007: R2,6 billion)
after net capital expenditure up 72% at R1,67 billion (2007: R968 million). The
R445 million decrease in working capital (2007: R637 million) reflects improved
payments in Middle East and advance payments on major projects.
Headline earnings of 550 cents per share is up 69% on the previous year at the
top-end of recent guidance offered to the market and ahead of the prospects
statements included in the 2007 Annual Report and 2008 Interim Report. We are
pleased with the turnaround in the fortunes of 56% held subsidiary Clough
Limited (ASX: CLO) from the 38 cents per share loss recorded in the previous
financial year.
Operating profit increased 63% to R2,40 billion (2007: R1,47 billion) on a 57%
increase in revenues to R27,9 billion (2007: R17,8 billion). The operating
margin of 8,6% (2007: 8,2%) is again the highest ever recorded by Murray &
Roberts and has moved well within the revised strategic range of 7,5% to 10,0%
set for the foreseeable future.
Shareholder Funds increased 34% to R4,86 billion (2007: R3,64 billion) and a
return of 40,3% (2007: 20,9%) on average shareholder funds in the year underpins
an increase in the strategic Group target threshold from 20% to 30%.
Operations
Public sector expenditure on infrastructure has emerged strongly through the
year, with a full range of programs now evident in the power, transportation and
water sectors. The general level of investment associated with 2010 Soccer World
Cup preparation has increased, including additional allocations for the various
stadium projects.
Southern Africa regional construction activities recorded revenues up 16% at
R5,8 billion (2007: R5,0 billion) and delivered operating profits of R421
million (2007: R328 million) at a margin of 7,3% (2007: 6,6%). This includes a
positive R86 million contribution arising from a fair value adjustment on
concession investments (2007: R76 million).
Despite the increased interest rate regime and decline in consumer activity,
there is still good activity in the private commercial building sector,
particularly for hotels and high-end residential developments.
Murray & Roberts has secured a lead position in the mechanical and civil works
for the world`s largest thermal power stations currently under construction.
Engineering contracting operations delivered revenues of R1,6 billion (2007:
R794 million) delivering operating profits of R70 million (2007: R46 million) at
a margin of 4,4% (2007: 5,8%) with benefits only expected to flow from the 2009
financial year. Private investment into new industrial capacity has waned
through the year, but has been compensated by increased activity in the power
sector and minerals beneficiation.
Market activity has increased throughout the Gulf, fuelled by the free cash flow
from higher oil revenues into the region. The Group`s primary focus is in the
United Arab Emirates and Bahrain where major project activity continues to
dominate market opportunity.
Middle East construction recorded revenues of R2,83 billion (2007: R2,38
billion) an increase of 19% and delivered an operating profit of R234 million
(2007: R123 million) at a margin of 8,3% (2007: 5,1%). The Concourse 2 Project
for Dubai International Airport was successfully completed and handed over to
the client in the year.
Global mining contracting operations in South Africa, Australia and Canada
recorded increased revenues of R5,2 billion (2007: R3,6 billion) and an
operating profit of R406 million (2007: R233 million) at a margin of 7,8% (2007:
6,5%). South African mining activity has remained steady 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
41% to R3,1 billion (2007: R2,2 billion) at an operating profit of R286 million
(2007: R168 million).
Concrete and Asphalt infrastructure products increased revenues 20% to R1,49
billion (2007: R1,24 billion) at an operating profit of R328 million (2007: R302
million).
Clay, steel and concrete building products delivered revenues of R632 million
(2007: R634 million) at an operating profit of R100 million (2007: R133
million). This sector has felt the impact on consumer affordability of higher
interest rates.
Specialist services to the construction and infrastructure sector delivered an
operating profit of R186 million (2007: R133 million) on revenues of R587
million (2007: R411 million).
Steel fabrication and manufacturing operations recorded revenues up 23% to R1,6
billion (2007: R1,3 billion) at an operating profit of R177 million (2007: R83
million).
Corporate overheads decreased marginally to R147 million (2007: R152 million) in
the year before a R57 million (2007: R67 million) contribution from Properties
and a charge of R43 million (2007: R21 million) relating to share-based payments
accounted for in terms of IFRS 2. Corporate capacity continues to play an
important role engaging risk mitigation in the Group`s major project and diverse
geographic operations.
Clough Limited
Clough was consolidated into the Group accounts from 1 July 2007 and a new
leadership team was established soon thereafter. With the exception of the G1
project in India where a substantial provision was taken in 2007 against
possible settlement, all other legacy problems have been fully resolved. The
potential of a G1 resolution has increased with Group executives acting as
facilitator between the disputing parties.
The Group held 56% of the shares in Clough at year-end with outstanding
convertible notes that will take the shareholding to about 60% before December
2009.
The Australian Dollar strengthened against the South African Rand through the
year, which contributed to Clough revenues in the Group of R4,9 billion
delivering operating profits of R321 million at a margin of 6,6%.
Full details on the Clough financial results for the year to 30 June 2008 and
its prospects statement are available on www.clough.com.au
Exceptional Items
Clough has disposed of subsidiaries for a capital profit of R214 million.
Various assets in South Africa have been re-valued at a net loss of R112 million
which has been partially offset by a profit of R43 million on property
disposals.
Black Economic Empowerment
The Group continues to build its broad-based black economic empowerment (BBBEE)
and employment equity profiles, with many operations improving their ratings
through the year. Almost a third of domestic operations are managed by
historically disadvantaged executives, supported by a number of other key
empowerment executives.
Total economic value created to date for an estimated 20 000 employees and
community participants in the share-based ownership and trust scheme has
exceeded R2,0 billion.
Skills Training and Development
Increasing demand for construction and engineering services is recognised as a
potential performance risk to the Group when linked to the inherent supply
deficit in industry experience, skills and leadership. The Group undertakes an
extensive range of skills and leadership development initiatives either directly
associated with its major project awards, or specifically geared to its
underlying business requirements. A number of skills enhancement initiatives are
undertaken in industry partnership and in association with South Africa`s
Department of Education.
The Gautrain Rapid Rail Link, Greenpoint Stadium and Medupi Power Station
Projects in South Africa have established skills development programs and are
all under the leadership of world class project management teams.
The Group funded more than 200 bursars at various universities and technikons in
South Africa during the year and outside the major projects approximately 6 000
(20%) employees undertook skills enhancement and training development.
Where necessary, the Group will supplement skills and experience deficits from
international markets, where the Murray & Roberts brand and project portfolio is
a significant attractor.
Acquisitions and Disposals
Murray & Roberts continues to seek acquisition opportunities that will serve to
enhance its existing market presence and critical mass. All existing businesses
are reviewed on a regular basis to ensure they remain aligned to the Group`s
strategic and performance objectives and fall within the general competence of
Group leadership. During the year Clough disposed of its interests in
subsidiaries Sheddon UHDE, CEM and the Clough Molteno JV.
The Competition Commission has approved the disposal transaction of Harvey
Roofing with effect from 31 July 2008.
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. At year-end
the Group directly employed more than 45 000 people with a further 40 000 to 50
000 from business partners contributing to the 216 million hours (2007: 172
million hours) recorded as worked in the year.
Safety statistics are reported in accordance with standard reporting protocol.
Regrettably, 16 people (2007: 11 people) were fatally injured on Group worksites
of which 15 (94%) were in South Africa and 50% (2007: 18%) were employees of
business partners. This excludes the tragic death of 8 employees in the South
Deep Mine accident on 1 May 2008. The formal investigation into this accident is
in progress.
The Group`s Stop.Think safety campaign continues to enhance behavioural
awareness with a Lost Time Injury Frequency Rate (LTIFR) of 2,5 per million
hours worked (2007: 3,0) recorded for the year. The Group LTIFR target of 1,0
demands further management attention to achieve the cultural changes needed to
influence the change in attitude for sustainable HSE success.
The Group has enhanced its mapping of work-related health issues such as
airborne and noise pollution and has modelled the basis of measurement of its
carbon footprint, including energy consumption and gaseous emissions.
Market
South African GFCF exceeded 22% of Gross Domestic Product (GDP) in a year that
experienced a slowing general economy. Construction Spend, nominally targeted at
a third of GFCF, has moved above 6% of GDP. The Group remains of the opinion
that nominal market growth will continue in the range 15% to 25% per annum for
the foreseeable future.
High inflation and interest rate increases dampened South African consumer
appetite for credit through the year with the housing retail sector experiencing
a lowering in demand. However, government investment into primary economic
infrastructure is now delivering the level and nature of major project
opportunity specifically attractive to the Group.
Despite poor economic fundamentals in the US and Europe, socio-economic growth
and development, driven primarily from Asia, continues to place increased demand
into the natural resources sector. Indications are that demand growth, although
cyclical, will continue for the foreseeable future.
This continues to have a major impact on the Group`s international markets,
which now comprise about 40% of total activity, where there is sustainable
growth potential and major project opportunity. There are increased capacity
constraints within the sector globally, which has the effect of driving
construction inflation.
Order Book
The project order book stood at R55 billion at 1 July 2008 (2007: R22,5
billion), an increase of 144% in the year and up 45% on the R38 billion at the
half-year. The order book includes R9,3 billion (A$1,20 billion) in Clough and
R5,7 billion (10,4%) extending beyond June 2011.
The order book comprises Construction Middle East at R11,5 billion (R2,2
billion); Construction SADC at R12,4 billion (R8,5 billion); Mining SADC at R3,2
billion (R3,3 billion); Mining International at R2,7 billion (R1,6 billion);
Clough at R9,3 billion (R5,0 billion); Engineering Contracting at R11,1 billion
(R1,6 billion) and Fabrication & Manufacture at R4,8 billion (R0,3 billion). The
amounts in brackets are the comparative levels at 30 June 2007. The regional
order book is SADC 56% (58%); Middle East 22% (13%); Australasia 18% (24%) and
North America 4% (5%).
The Group secured a significant involvement in South Africa`s power generation
program during the year, including boiler house mechanical works for Medupi and
Kusile Thermal plants, civil works for Medupi and the EPCM contract for the PBMR
Demonstration Plant.
The Group also took a lead role in the submission of a proposal for a
conventional nuclear plant, ensuring the maximum possible localisation and
skills transfer for systems and module fabrication and civil and structural
construction.
Activity levels in the Group`s construction materials and services companies
remain high, supporting a positive future outlook for performance delivery. Not
included in order book is the backlog in UCW relating to the locomotive
contracts for Spoornet and the recently awarded supply of ERW steel pipe to
Transnet for its multi-product pipeline, the latter valued at about R2,0
billion.
Directors and Management
There have been a number of changes in the directorate and executive of the
Group during the second half-year. Mr Sonwabo "Eddie" Funde resigned as an
independent non-executive director on 30 June 2008 following his appointment as
South African Ambassador to Germany. Mr David Barber was appointed independent
non-executive director on 27 June 2008.
Mr Ian Henstock has joined the Group as commercial executive and Mr Andrew
Skudder has been appointed to lead enterprise capability. Both executives have
been appointed to the board of Murray & Roberts Limited.
Prospects and Trading Statement
Capital Expenditure in the year increased 70% to R1,7 billion (2007: R1,0
billion) and is set to increase by a further 30% at least in the year ahead.
This level of investment is made possible by the margins and cash flows
available in the current market and ensures the capacity needed for future
growth.
Critical mass is increasingly an important differentiator for success in a
market where major and complex projects often exceed the balance sheet capacity
of construction companies. 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 industry consolidation on
a national level are high.
There is little indication that current levels of activity will be significantly
affected by the turmoil in international financial markets although signs of
increased volatility are evident in some market sectors. Murray & Roberts has
embraced the growth challenge offered by increased investment into its domestic
and international markets and despite the associated risks, maintains its non-
negotiable commitment to sustainable earnings growth and value creation.
Subject to a continuation in current levels of fixed investment activity in the
Group`s markets, diluted headline earnings per share for the year ahead is
expected to grow between 30% and 40% and due to exceptional profit taken in the
2008 financial year, diluted earnings per share is expected to grow between 25%
and 35%.
A Business Update will be presented at the Group`s annual general meeting to be
held on 28 October 2008.
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 the Board Group Chief Executive Group Financial
Director
Bedfordview
27 August 2008
Notice to Shareholders
Declaration of final ordinary dividend (No. 113)
Notice is hereby given that the final dividend, dividend No. 113 of 119 cents
per share (2007: 71 cents per share) in respect of the financial year ended 30
June 2008 has been declared payable to shareholders recorded in the register at
the close of business on Friday 17 October 2008.
The salient dates for the final ordinary dividend are as follows:
Last day to trade cum the dividend Friday 10 October 2008
Shares commence trading ex dividend Monday 13 October 2008
Record date Friday 17 October 2008
Payment date Monday 20 October 2008
Share certificates may not be dematerialised or re-materialised between Monday
13 October 2008 and Friday 17 October 2008, both days inclusive.
On Monday 20 October 2008 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 20 October 2008.
Dematerialised shareholder accounts will be credited at their CSDP or broker on
Monday 20 October 2008.
By order of the Board
Y Karodia
Group Secretary
Bedfordview
27 August 2008
Murray & Roberts Holdings Limited Registration No. 1948/029826/06
Directors:
RC Andersen* (Chairman) BC Bruce (Managing & Chief Executive)
DD Barber* SJ Flanagan NM Magau* JM McMahon* IN Mkhize* RW Rees AA
Routledge* MJ Shaw* SP Sibisi* KE SmithSquared JJM van Zyl* RT Vice*
1 British 2 Irish *Non-executive
Secretary:
Y Karodia
Registered office: Registrar:
Douglas Roberts Centre, Link Market Services South Africa
(Proprietary) Limited
22 Skeen Boulevard, 11 Diagonal Street,
Bedfordview 2007 Johannesburg 2001
PO Box 1000 PO Box 4844
Bedfordview 2008 Johannesburg 2000
"Our commitment to sustainable earnings growth and value creation is not
negotiable"
Disclaimer
We may make statements that are not historical facts and relate to analyses and
other information based on forecasts of future results and estimates of amounts
not yet determinable. These are forward-looking statements as defined in the
U.S. Private Securities Litigation Reform Act of 1995. Words such as "believe",
"anticipate", "expect", "intend", "seek", "will", "plan", "could", "may",
"endeavour" and "project" and similar expressions are intended to identify such
forward-looking statements, but are not the exclusive means of identifying such
statements. By their very nature, forward-looking statements involve inherent
risks and uncertainties, both general and specific, and there are risks that
predictions, forecasts, projections and other forward-looking statements will
not be achieved. If one or more of these risks materialize, or should underlying
assumptions prove incorrect, actual results may be very different from those
anticipated. The factors that could cause our actual results to differ
materially from the plans, objectives, expectations, estimates and intentions
expressed in such forward-looking statements are discussed in each year`s annual
report. Forward-looking statements apply only as of the date on which they are
made, and we do not undertake other than in terms of the Listings Requirements
of the JSE Limited, any obligation to update or revise any of them, whether as a
result of new information, future events or otherwise. All profit forecasts
published in this report are unaudited.
e-mail: clientservice@murrob.com website:www.murrob.com
Date: 27/08/2008 15:29:01 Produced by the JSE SENS Department.
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