| Wed 26 Aug 2009, 15:22 | | MUR - Murray & Roberts - Preliminary report for the year ended 30 June 2009 |
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MUR
MUR
MUR - Murray & Roberts - Preliminary report for the year ended 30 June 2009
Murray & Roberts Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1948/029826/06)
Share Code: MUR ISIN: ZAE000073441
("Murray & Roberts" or "Group")
Preliminary report for the year ended 30 June 2009
MURRAY & ROBERTS PROVES ITS RESILIENCE
Reframing for the future
Condensed consolidated income statement
for the year ended 30 June 2009 Audited Audited
Annual Annual
R millions 30.6.09 30.6.08*
Revenue 33 762 26 665
Earnings before interest,
exceptional items,
depreciation and amortisation 3 674 2 849
Depreciation (741) (530)
Amortisation of intangible assets (35) (39)
Earnings before interest and 2 898 2 280
exceptional items
Exceptional items (note 2) 8 145
Earnings before interest and 2 906 2 425
taxation
Net interest (expense)/income (37) 30
Earnings before taxation 2 869 2 455
Taxation (612) (489)
Earnings after taxation 2 257 1 966
Share of profit from associates 2 9
Earnings from continuing operations 2 259 1 975
Profit from discontinued operations 79 89
(note 3)
Earnings for the year 2 338 2 064
Attributable to:
- Shareholders of the holding 2 018 1 714
company
- Minority shareholders 320 350
2 338 2 064
Earnings per share (cents)
- Diluted 678 565
- Basic 685 577
Earnings per share from continuing
operations (cents)
- Diluted 663 547
- Basic 670 559
Total dividend per ordinary share 218 196
(cents)**
Operating cash flow per share 470 939
(cents)
* Reclassified as a result of discontinued operations
** Based on period to which dividend relates
Supplementary income statement
information
Reconciliation of weighted average
number of shares in issue (000)
Weighted average number of 331 893 331 893
ordinary shares in issue
Less: weighted average number of
shares held by The Murray & (7 815) (5 333)
Roberts Trust
Less: weighted average number of
shares held by Murray & Roberts (676) (676)
Limited
Less: weighted average number of
shares held by the Letsema BBBEE (28 946) (28 946)
trusts
Weighted average number of shares
used for basic per share 294 456 296 938
calculation
Add: dilutive adjustment for share 3 257 6 370
options
Weighted average number of shares
used for diluted per share 297 713 303 308
calculation
Headline earnings per share
(cents) (note 4)
- Diluted 675 550
- Basic 683 562
Headline earnings per share from
continuing operations (cents)
- Diluted 660 532
- Basic 668 544
Condensed consolidated segmental analysis for the year ended 30 June 2009
R millions Revenue Earnings
before Exceptional
interest and items
exceptional
items
30.6.09
Construction & 25 138 2 175 -
Engineering
Construction 6 325 711 (12)
Materials & Services
Fabrication & 2 153 180 -
Manufacture
Corporate & 146 (168) 20
Properties
Continuing operations 33 762 2 898 8
Discontinued 1 606 87 -
operations (note 3)
35 368 2 985 8
30.6.08
Construction & 19 132 1 335 203
Engineering
Construction 5 838 901 33
Materials & Services
Fabrication & 1 582 177 -
Manufacture
Corporate & 113 (133) (91)
Properties
Continuing operations 26 665 2 280 145
Discontinued 1 510 151 -
operations (note 3)
28 175 2 431 145
Condensed consolidated balance sheet at 30 June 2009
Audited Audited
Annual Annual
R millions 30.6.09 30.6.08
ASSETS
Non-current assets 6 258 5 533
Property, plant and equipment 4 280 3 694
Investment property 510 482
Goodwill 490 488
Other intangible assets 59 90
Deferred taxation assets 305 208
Investment in associate companies 12 13
Other investments 483 518
Other non-current receivables 119 40
Current assets 15 422 15 861
Accounts and other receivables 2 690 2 856
Inventories 2 169 1 854
Amounts due from contract customers 5 900 6 462
Cash and cash equivalents 4 663 4 689
Assets classified as held-for-sale 1 813 256
TOTAL ASSETS 23 493 21 650
EQUITY AND LIABILITIES
Total equity 6 634 5 825
Attributable to shareholders of the 5 581 4 864
holding company
Minority shareholders` interest 1 053 961
Non-current liabilities 1 447 1 290
Long-term provisions 78 102
Obligations under finance 14 53
headleases*
Long-term liabilities* 770 751
Other non-current liabilities 313 178
Deferred taxation liabilities 272 206
Current liabilities 14 370 14 466
Accounts and other payables 8 075 9 293
Amounts due to contract customers 3 601 3 953
Bank overdrafts* 1 787 411
Short-term loans* 907 809
Liabilities directly associated
with a disposal group
held-for-sale 1 042 69
TOTAL EQUITY AND LIABILITIES 23 493 21 650
*Interest-bearing borrowings
Supplementary balance sheet
information
(R millions)
Net asset value per share (cents) 1 682 1 466
Capital expenditure
- Spent 2 368 1 784
- Authorised but unspent 1 529 2 779
Operating lease commitments 2 328 2 528
Contingent liabilities 261 176
Financial institution guarantees 10 105 9 827
Condensed consolidated cash flow statement for the year ended 30 June 2009
Audited Audited
Annual Annual
R millions 30.6.09 30.6.08
Cash generated by operations before 3 928 3 221
working capital changes
Cash outflow from headlease and (25) (75)
other property activities
(Increase)/decrease in working (1 290) 445
capital
Cash generated from operations 2 613 3 591
Interest and taxation paid (net) (1 054) (475)
Operating cash flow 1 559 3 116
Dividends paid to shareholders of (625) (455)
the holding company
Dividends paid to minority (72) (70)
shareholders
Cash flow from operating activities 862 2 591
Property, plant and equipment and (2 262) (1 666)
intangible assets (net)
Cash flow from consolidation of - 590
Clough Limited
Acquisition of minorities (390) -
Business disposals/acquisitions - 262
(net)
Other investments (net) 162 30
Other (net) 5 37
Cash flow from investing activities (2 485) (747)
Net movement in borrowings 663 (303)
Net movement on issue of shares by - 108
subsidiary
Treasury share (251) (68)
acquisitions/disposals (net)
Cash flow from financing activities 412 (263)
Net (decrease)/increase in cash and (1 211) 1 581
cash equivalents
Net cash and cash equivalents at 4 278 2 628
beginning of year
Effect of foreign exchange rates (191) 69
Net cash and cash equivalents at 2 876 4 278
end of year
Condensed consolidated statement of changes in equity for the year ended 30
June 2009
R millions Share Other Hedging
capital capital and
and reserves translation
premium reserves
Balances at 30 June 2007 1 036 77 156
Transfer from non- - (2) -
distributable reserves
Hedging reserves on financial - - 5
instruments
Purchase/disposal of - - -
minorities (net)
Net movement in minority - - -
loans
Movement in treasury shares (68) - -
Movement in share-based - 48 -
payment reserve
Foreign currency translation - - 52
movement on investments
Attributable earnings - - -
Dividend declared and paid - - -
Balances at 30 June 2008 968 123 213
Hedging reserves on financial - - 4
instruments
Purchase/disposal of - - -
minorities (net)
Net movement in minority - - -
loans
Movement in treasury shares (250) - -
Movement in share-based - 38 -
payment reserve
Transfer to minority interest - (8) (2)
Foreign currency translation - - (245)
movement on investments
Attributable earnings - - -
Dividend declared and paid - - -
Balances at 30 June 2009 718 153 (30)
R millions Retained Minority Total
earnings interest
Balances at 30 June 2007 2 368 178 3 815
Transfer from non- 2 - -
distributable reserves
Hedging reserves on - - 5
financial instruments
Purchase/disposal of (69) 394 325
minorities (net)
Net movement in minority - 12 12
loans
Movement in treasury shares - - (68)
Movement in share-based - - 48
payment reserve
Foreign currency - 97 149
translation movement on
investments
Attributable earnings 1 714 350 2 064
Dividend declared and paid (455) (70) (525)
Balances at 30 June 2008 3 560 961 5 825
Hedging reserves on - - 4
financial instruments
Purchase/disposal of (213) (137) (350)
minorities (net)
Net movement in minority - 42 42
loans
Movement in treasury shares - - (250)
Movement in share-based - - 38
payment reserve
Transfer to minority - 10 -
interest
Foreign currency - (71) (316)
translation movement on
investments
Attributable earnings 2 018 320 2 338
Dividend declared and paid (625) (72) (697)
Balances at 30 June 2009 4 740 1 053 6 634
Notes:
1. Basis of preparation
This preliminary report has been prepared and presented in accordance with
IAS34: 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 2009 Annual Financial Statements were audited by the Group`s
external auditors, Deloitte & Touche, whose unmodified audit opinion is
available for inspection at the company`s registered office.
2. Exceptional items
R millions 30.6.09 30.6.08
Property fair value adjustment - 2
Profit on disposal of investments 20 214
(Loss)/profit on disposal of land (12) 43
and buildings
Impairment of investments and - (111)
goodwill
Other - (3)
Exceptional profit 8 145
3. Profit from discontinued operations
Clough Limited (Clough), having undertaken a strategic review of its
operations, has confirmed its intent to concentrate activities within the Oil
& Gas market, resulting in the decision to dispose of its 82% holding in PT
Petrosea Tbk and related entities (Petrosea), which is focused on the
Indonesian coal sector. On 26 February 2009, Clough announced that it had
entered into a binding Heads of Agreement to sell its shareholding in Petrosea
to PT Indika Energy Tbk for a cash consideration of US$83.8 million. The sale
of Petrosea was completed subsequent to year end, on 6 July 2009. The results
of Petrosea have been recorded in these financial statements as being a
discontinued operation. Financial information relating to Petrosea for the
year is set out below. The prior year includes financial information for
Petrosea and Harvey Roofing Products (Proprietary) Limited.
R millions 30.6.09 30.6.08
Revenue 1 606 1 510
Earnings before interest and 152 238
depreciation
Depreciation (65) (87)
Earnings before interest and 87 151
taxation
Net interest expense (20) (15)
Taxation 12 (49)
Earnings after taxation 79 87
Share of profit from associates - 2
Profit from discontinued 79 89
operations
Minority interest relating to 34 35
discontinued operations
Cash flows from discontinued
operations include the following:
Cash flow from operating 12 158
activities
Cash flow from investing (346) (67)
activities
Cash flow from financing 147 (65)
activities
Net (decrease)/increase in cash (187) 26
and cash equivalents
4. Reconciliation of headline earnings
R millions 30.6.09 30.6.08
Earnings attributable to 2 018 1 714
shareholders of the holding
company
Revaluation of investment property - (2)
Profit on disposal of investments (20) (214)
Loss/(profit) on disposal of land 12 (43)
and buildings
Impairment of investments - 101
Impairment of goodwill - 10
Taxation effect on above - 11
adjustments
Minority interest on above - 92
adjustments
Headline earnings 2 010 1 669
5. Post balance sheet event
On 6 July 2009, Clough completed the disposal of 82% held Indonesian listed
contract mining subsidiary PT Petrosea Tbk for a cash consideration of US$83.8
million. The financial effects of the transaction have not been brought into
account at 30 June 2009. The results of Petrosea have been recorded as being a
discontinued operation and the assets and liabilities of Petrosea have been
recorded as held-for-sale.
On 17 August 2009, Clough announced that it had acquired 70% of the share
capital of Ocean Flow International LLC (Ocean Flow), with the remaining 30%
to be acquired over the next three years. Ocean Flow is a subsea engineering
and construction management company specialising in deepwater facilities,
headquartered in Houston, USA.
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 materialise, 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, to update or revise any statement, whether as a result of new
information, future events or otherwise. All profit forecasts published in
this report are unaudited. Investors are cautioned not to place undue reliance
on any forward-looking statements contained herein.
"Our commitment to sustainable earnings growth and value creation is non-
negotiable"
Commentary
The global economic crisis has distressed most fixed investment markets over
the past six months and has challenged the Group`s performance in the year.
But Murray & Roberts is a resilient organisation and its diverse business
model has given strength to its performance through this period.
The Directors are pleased to report diluted headline earnings of 675 cents per
share, up 23% on the previous year and above the top-end of recent guidance
offered to the market. In a year of two very different halves, revenue growth
in the second half was limited to 12% compared to the previous equivalent
period and down from first half growth of 44% as previously reported.
Revenues for the year increased 27% to R33,8 billion (2008: R26,7 billion)
with an operating profit increase of 27% to R2,9 billion (2008: R2,3 billion).
Despite the fall-off in second half activity, the operating margin for the
year has been maintained at 8,6% (2008: 8,6%).
The year-end net cash position was R2,8 billion (2008: R4,3 billion) after net
capital expenditure up 33% at R2,4 billion (2008: R1,8 billion). Operating
cash inflow for the year is down 50% at R1,6 billion (2008: R3,1 billion)
after a R1,3 billion increase in working capital (2008: R445 million decrease)
essentially to fund inventory in the Fabrication & Manufacture cluster and in
Clough Limited (Clough).
Shareholder Funds increased 15% to R5,6 billion (2008: R4,9 billion) giving a
return of 38,6% (2008: 40,3%) on average shareholder funds for the year.
There is evidence of stabilisation in the Group`s markets. Considering the
short-term demand expectations on the cash resources of the Group, the
Directors have determined a final dividend of 133 cents per share (2008: 119
cents per share). This increases the total dividend for the full year by 11%
to 218 cents per share (2008: 196 cents per share) based on a dividend cover
of 3,0 times diluted headline earnings per share plus 16 cents per share from
Clough. Attention is drawn to the formal dividend announcement contained
herein.
The Group order book at 30 June 2009 remained stable at R40 billion (2008: R55
billion) following termination of R25 billion of order book between November
2008 and March 2009.
The year ahead will almost certainly present further challenges to the Group
and its operations. There is opportunity in the market and order book
development has kept pace with revenue over the final four months of the
financial year. In passing through this year-end, each operation has been
stress-tested in the context of the economic crisis, its impact to date and
its likely influence on performance into the future. This process increased
final quarter volatility, but has delivered a confident overall result for the
year that underpins the future performance potential of the Group.
Strategic Response
Murray & Roberts has a resilient business model, focused on the construction
economy through a number of market and organisational dimensions, which is
sufficiently diverse to support sustainability of performance. Despite the
economic crisis and recession in many of the Group`s markets, most operations
have delivered creditable performances in the 2009 financial year.
Operational leadership teams have been exemplary in their engagement of the
order book termination process and the Group did not suffer any negative
financial consequence as a result. Regrettably, about 7000 jobs have been shed
as projects and opportunities have been terminated or delayed in the period
since November 2008.
In response, the Group will consolidate its operations into six large business
clusters, three of which are focused on the domestic and Southern Africa
Development Community (SADC) market and three focused on global and
international markets. New and experienced executive leadership has been
appointed into the top levels of the organisation to compliment the high level
capacity already in place. The Group`s Leadership Development and Succession
Program is directed at the significant potential within the organisation.
This is Reframing Murray & Roberts which defines the Group`s strategic
response to the economic and market challenges, essentially reframing the
established business model on the principle "same picture but against a
different context, background and surrounding". This follows the success of
Rebuilding Murray & Roberts between 2000 and 2005 and Globalising Murray &
Roberts through 2006 to 2008.
Construction SADC
Five companies engage the large to medium sector building, civil engineering,
industrial and roads & earthworks construction markets of South Africa,
Botswana, Namibia and Zimbabwe and pursue selected project opportunities
elsewhere in SADC.
Consolidated revenues increased 57% to R9,1 billion (2008: R5,8 billion) with
operating profit up 55% to R523 million (2008: R338 million) at a margin of
5,7% (2008: 5,8%).
R millions* Construction Concor
2009 2008 2009 2008
Revenues* 5 579 3 363 3 156 2 118
Operating Profit* 142 73 338 204
Margin 2,5% 2,2% 10,7% 9,6%
People 4 471 6 156 3 940 4 013
LTIFR (Fatalities) 2,7(2) 4,4(7) 1,0(3) 0,7(0)
Order Book* 4 900 8 600 3 400 3 300
R millions* Botswana & Namibia Zimbabwe**
2009 2008 2009
Revenues* 379 337 114
Operating Profit* 43 61 11
Margin 11,3% 18,1% 9,6%
People 706 705 1 263
LTIFR (Fatalities) 4,7(0) 3,5(0) 0,5(0)
Order Book* 300 400 100
** Murray & Roberts Zimbabwe is a 49% held associate and these figures are for
information purposes only.
Murray & Roberts Construction includes the Group`s share of the Gautrain
Project against which no operating profit has been recognised in the financial
year (refer to Major Projects below), and Green Point Stadium. The Group`s 67%
share of Medupi Civils is shared equally between Concor and Murray & Roberts
Construction.
Mr Trevor Fowler, a civil engineer with extensive professional experience
earned in the USA and Canada, has been appointed to succeed Mr Keith Smith as
executive chairman of the cluster. He joins the Group in September 2009 from
his previous role as chief operating officer in the Presidency.
Engineering SADC
Five companies engage large scale EPCM (engineer, procure and construction
manage) and EPC (engineer, procure and construct) projects in the industrial,
mining, power and marine infrastructure markets. Apart from Marine which has
an Africa, Middle East and Asia focus, the primary market is South Africa and
Rest of Africa.
Consolidated revenues increased 41% to R2,7 billion (2008: R1,9 billion) with
operating profit up significantly to R446 million (2008: R87 million) at a
margin of 16,5% (2008: 4,5%).
R millions* MRES & MEI Genrec
2009 2008 2009 2008
Revenues* 684 1 047 444 318
Operating Profit* (12) (25) 33 17
Margin (1,8%) (2,4%) 7,4% 5,3%
People 391 953 1 281 544
LTIFR (Fatalities) 1,4(0) 1,1(1) 10,9(0) 4,8(0)
Order Book* 8 700 9 800 9 200 4 500
R millions* Wade Walker Marine
2009 2008 2009 2008
Revenues* 1 058 254 515 303
Operating Profit* 328 63 97 32
Margin 31,0% 24,8% 18,8% 10,6%
People 1 458 1 556 381 359
LTIFR (Fatalities) 0(0) 0(0) 0(0) 2,6(0)
Order Book* 400 600 200 700
Murray & Roberts MEI and Murray & Roberts Engineering Solutions (MRES) are
being merged to form a larger scale EPC contractor to serve the industrial,
power and resource beneficiation markets of SADC. The results include the
early stages of Medupi and Kusile Boiler projects. The 20% minority in Wade
Walker was acquired effective 28 February 2009 and the company benefited from
various minerals processing projects in the Rest of Africa.
Construction Products SADC
Six companies manufacture and supply value-added construction products to the
infrastructure and building markets of South Africa and the rest of SADC.
Principal raw material inputs are steel, cement, aggregate, bitumen and clay.
Consolidated revenues increased 10% to R6,6 billion (2008: R6,0 billion) with
operating profit 24% down to R621 million (2008: R821 million) at a margin of
9,4% (2008: 13,6%).
R millions* Steel Hall Longmore
2009 2008 2009 2008
Revenues* 2 960 3 128 1 111 782
Operating Profit* 78 286 133 107
Margin 2,6% 9,1% 12,0% 13,7%
People 2 089 1 897 788 470
LTIFR (Fatalities) 11,1(0) 8,9(0) 5,0(1) 5,7(0)
R millions* Rocla & Much Ocon & Technicrete
2009 2008 2009 2008
Revenues* 1 916 1 491 590 632
Operating Profit* 351 328 59 100
Margin 18,3% 22,0% 10,0% 15,8%
People 1 755 1 708 1 439 2 004
LTIFR (Fatalities) 10,6(0) 16,3(0) 5,6(0) 6,3(0)
Murray & Roberts Steel experienced high levels of volume and price volatility
in the year and a R200 million stock impairment was recognised. Hall Longmore
had difficulty with the performance of the specialist coating plant as part of
its R200 million production upgrade. There was lower demand from the
residential and commercial building sector and a decision has been taken to
bring the Ocon and Technicrete businesses closer together.
The 20% minority in Ocon was acquired effective 1 July 2008 and Harvey Roofing
was disposed of effective 31 July 2008.
Dr Orrie Fenn, a civil engineer, will join the Group as Executive Chairman of
the cluster. He joins the Group from PPC where he was chief operating officer.
He succeeds Mr Andrew Langham who will take up the role as financial director
of Murray & Roberts Limited, the Group`s main operating company.
Cementation Group
The three constituent companies are based in Johannesburg South Africa, North
Bay in Ontario Canada and Kalgoorlie West Australia. They are coordinated out
of London and provide specialist engineering, construction and operational
services in the underground environment, to the mining and metals resources
sector worldwide.
Consolidated revenues increased 14% to R6,0 billion (2008: R5,2 billion) with
operating profit 5,4% up to R428 million (2008: R406 million) at a margin of
7,2% (2008: 7,7%).
R millions* Cementation Cementation RUC Cementation
Africa Canada
2009 2008 2009 2008 2009 2008
Revenues* 3 441 2 981 2 137 1 838 385 425
Operating 210 140 187 206 31 60
Profit*
Margin 6,1% 4,7% 8,8% 11,2% 8,1% 14,1%
People 11 530 15 625 704 1 394 149 218
LTIFR 5,2(3) 3,9(7) 1,2(0) 2,7(0) 12,5(0) 7,6(0)
(Fatalities)
Order Book* 2 700 3 200 2 700 2 000 500 600
The mining resources sector worldwide was severely impacted by the global
economic crisis and the Cementation companies had R533 million of work
terminated, as well as about R152 million of probable pipeline. Market
conditions have stabilised as commodity prices recovered off their lows, but
it will be at least 12 months before significant new work materialises. In the
meantime new markets are being engaged in Chile and a number of countries in
Asia and the Rest of Africa.
It is anticipated that the Cementation companies will be consolidated into a
single business by the end of the financial year.
Middle East
The Middle East market is coordinated out of Dubai in the United Arab Emirates
and projects are engaged through separate companies established in each
jurisdiction and in joint venture with appropriate local partners. The primary
market focus is major commercial facilities and selected infrastructure
projects where the Group has a defined competitive advantage.
Consolidated revenues increased 26% to R3,6 billion (2008: R2,8 billion) with
operating profit 49% up to R350 million (2008: R234 million) at a margin of
9,8% (2008: 8,3%).
The Emirate of Dubai and to a lesser extent the Kingdom of Bahrain were
severely impacted by the global economic crisis and R17 billion of work was
terminated. The Group embarked on a strategic move into the Emirate of Abu
Dhabi which is proving to be a more sustainable market.
A partnership has been formed with Saudi Oger specifically to engage selected
major project opportunities in the Kingdom of Saudi Arabia and elsewhere in
the region as appropriate.
Clough
The company is based in Perth West Australia and is generally focused on the
upstream oil & gas sector and strategically focused on the LNG (liquid natural
gas) markets of Australasia and deep water SURF (submarine umbilical and riser
flow) markets within the various oil provinces of the Atlantic Ocean along the
North and South America and Africa coastlines.
Clough consolidated its turnaround and delivered a creditable performance in
the year, including the resolution of legacy matters and disposal of non-core
assets.
Revenues increased 15% to R4,2 billion (2008: R3,6 billion) with operating
profit 67% up to R342 million (2008: R204 million) at a margin of 8,2% (2008:
5,6%).
Indonesian subsidiary PT Petrosea was sold effective 6 July 2009 and is
reflected as a discontinued operation in the income statement and an asset
held-for-sale in the balance sheet. The terms of settlement of the G1 project
dispute in India were settled in the year but no recognition has been taken
pending the outcome of an Indian taxation authority ruling.
Full details on the Clough financial results for the year to 30 June 2009 and
its prospects statement are available on www.clough.com.au
Investments
Five companies, Murray & Roberts Concessions, Murray & Roberts Properties,
Toll Road Concessionaires (Tolcon), Johnson Arabia and Union Carriage & Wagon
(UCW) do not naturally fall into the above clusters and have been grouped as
investments, each being the responsibility of an appropriate and focused
executive team.
Consolidated revenues increased 42% to R1,7 billion (2008: R1,2 billion) with
operating profit up 14% to R432 million (2008: R380 million) at a margin of
25,4% (2008: 31,7%).
Major Projects
The scale and duration of major projects secured by the Group over the past
few years presents a number of challenges, not least of which is revenue
recognition, such that neither present nor future shareholders are unduly
prejudiced or advantaged relative to one another.
Involvement in major transport system, power station, locomotive, pipeline,
stadium and Middle East projects makes this a permanent feature of the Group`s
accounts. The Group directors and executives have ensured the right level of
capacity and external advice to manage this feature.
Murray & Roberts has a 25% share in the 20 year concession for the Gautrain
project and in the system operator and has a 45% share in the construction of
infrastructure for the project. The project has suffered delay and disruption
against which claims and variation notices have been submitted but not yet
resolved in terms of the relevant contracts. Gauteng Province has requested a
proposal to accelerate Phase 1 of Gautrain to achieve completion in time for
the 2010 FIFA World Cup.
The Group has a 40% share in the Dubai Concourse 2 project where the final
account settlement has been in progress since hand-over to the client in
October 2008.
The level of revenue recognition on the above projects, which includes a
portion of the claims submitted, is prudent and justifiable in terms of each
contract, given the complexity and magnitude of claims and variation orders
still to be resolved.
Health Safety and the Environment
The Group, its directors and management regret the loss of 9 (nine) employees
in the 2009 financial year (2008: 16 employees and subcontractors) as a result
of fatal accidents in the workplace. Ten months in the 2009 financial year
were fatality free and there is absolute commitment to ensure that the Group
achieves and sustains its target of Zero Fatalities and Disabling Injuries.
Stop.Think is the primary branding for health safety and environment (HSE)
awareness across the Group. A safety lead indicator is the lost time injury
frequency rate (LTIFR) which continued a five year downward trend towards a
Group target of 1,0 and increased marginally to 2,89 for the 12 months to 30
June 2009 (2008: 2,44).
The Group`s safety challenge persists primarily in South Africa, with all
international and Rest of SADC operations showing best-in-class performance
characteristics. The solution to this challenge is not obvious. The forensic
investigation into every fatal and significant accident shows human error in
both system override and awareness behaviour. For this reason the Group has
commenced behaviour correction and awareness training as a sustainable
intervention to complement conventional safety management practice and
procedure.
Black Economic Empowerment
The Group achieved Level 5 status in compliance with the codes of good
practice and legislation concerning broad-based black economic empowerment
(BBBEE) in South Africa. Many operations also improved their ratings through
the year.
Total economic value created to date for an estimated 20 000 employees and
community participants in the Group`s share-based ownership and trust scheme
was reduced to about R1,2 billion (2008: R2,0 billion) primarily due to the
stock market collapse associated with the global economic crisis.
Skills Training and Development
Although the economic slowdown has tempered demand for construction and
engineering services in the short-term, this is seen as temporary and the
Group has continued with its broad range of training and development
interventions and programs. A number of skills enhancement initiatives are
undertaken in industry partnerships and in association with South Africa`s
Department of Education.
The Group funded 193 bursars at various universities and technikons in South
Africa during the 2009 financial year and approximately 10 000 employees
undertook skills enhancement and training development.
Directors and Management
The Group continued to strengthen and diversify its governance and leadership
capacity. Mr Alan Knott-Craig and Adv Mahlape Sello were appointed independent
non-executive directors in November 2008 and February 2009 respectively. This
followed the mandatory retirement of Messrs Boetie van Zyl and Martin Shaw at
the annual general meeting in October 2008, when Mr Keith Smith also retired
as an executive director.
Mr Trevor Fowler and Dr Orrie Fenn will join the Group over the next few
months and will be appointed executive directors from their respective dates
of engagement.
Mr Murray Easton joins the Group from the UK in September 2009 as Group Chief
Engineer and leader of the Group nuclear strategy. He will be appointed with
initial executive responsibility for the Fabrication & Manufacture businesses.
Mr Malose Chaba has been appointed to the new role of Group Head of Assurance
and an executive director with effect from 1 September 2009. Mr Chaba meets
all the attributes required of the chief audit executive in terms of the draft
King III and his role will consolidate all aspects of the Group`s risk
management, internal audit, health safety and environment, technical and
project review, and systems compliance.
Mr Andrew Langham is appointed financial director of Murray & Roberts Limited,
the Group`s main operating company, with effect from 1 September 2009.
These appointments enhance both capacity and diversity in the Group leadership
team in preparation for the period ahead.
Prospects
Murray & Roberts is a resilient organisation with a strong and experienced
executive leadership team with deep institutional skills and commitment within
its people. The Group is confident that the current slowdown in fixed capital
formation is temporary and that markets remain on course for a long-term
growth trajectory.
The Project Opportunity Pipeline, which records opportunities of interest to
the Group and that have already been filtered through the Opportunity
Management System, stood at R71 billion at 30 June 2009 (2008: R96 billion). A
total of R56 billion of projects in the pipeline were terminated in the
financial year.
In addition, the Group is preparing itself for a South African nuclear
strategy, to engage proactively in the resolution of South Africa`s human
settlement challenge and seek appropriate opportunities for the development of
economic infrastructure in the Rest of Africa. Further acquisition
opportunities are being considered and the Group`s international operations
have plans to expand their markets in Middle East, South America and Asia.
While the Group does expect growth in the year ahead, if not in all companies
and markets then from the new markets and opportunities it has committed to
engage, volatility of the SA Rand against the US Dollar and other
international currencies may impact the translation of the Group`s 40%
international earnings.
The 2009 Annual Report will be published before end-September and includes
more detailed information covering the performance and operations of the
Group. A business update will be given at the annual general meeting to be
held on Wednesday 21 October 2009. It is expected that more information
concerning prospects in the market and the ongoing impact of the global
economic crisis will be available at that time.
The financial information on which this prospects statement is based has not
been audited or reviewed by the Group`s auditors.
On behalf of the directors
Roy Andersen Brian Bruce Roger Rees
Chairman of the Board Group Chief Executive Group Financial
Director
Bedfordview
26 August 2009
Notice to Shareholders
Declaration of final ordinary dividend (No. 115)
Notice is hereby given that the final ordinary cash dividend No. 115 of 133
cents per share (2008: 119 cents per share) in respect of the financial year
ended 30 June 2009 has been declared payable to shareholders recorded in the
register at the close of business on Friday 16 October 2009.
The salient dates for the final ordinary cash dividend are as follows:
Last day to trade cum the dividend Friday 9 October 2009
Shares commence trading ex dividend Monday 12 October 2009
Record date Friday 16 October 2009
Payment date Monday 19 October 2009
Share certificates may not be dematerialised or re-materialised between Monday
12 October 2009 and Friday 16 October 2009, both days inclusive.
On Monday 19 October 2009 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 19 October 2009.
Shareholders who hold dematerialised shares will have their accounts at their
CSDP or broker credited on Monday 19 October 2009.
By order of the Board
Y Karodia
Group Secretary
Bedfordview
26 August 2009
Murray & Roberts Holdings Limited Registration No. 1948/029826/06
Directors:
RC Andersen* (Chairman) BC Bruce (Managing & Group Chief Executive) DD Barber*
SJ Flanagan ADVC Knott-Craig* NM Magau* JMMcMahon* IN Mkhize* RW Rees1 AA
Routledge* M Sello* SP Sibisi* RT Vice*
1 British *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
e-mail: clientservice@murrob.com
website: www.murrob.com
.mobi site: http://murrob.mobi
Bedfordview
26 August 2009
Sponsor:
Deutsche Securities (SA) (Pty) Ltd
Date: 26/08/2009 15:22:04 Produced by the JSE SENS Department.
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