| Wed 25 Aug 2010, 15:51 | | MUR - Murray & Roberts Holdings Limited - Preliminary Report |
|
MUR
MUR
MUR - Murray & Roberts Holdings Limited - Preliminary Report
for the year ended 30 June 2010
Murray & Roberts Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1948/029826/06)
JSE Share code: MUR
ISIN: ZAE000073441
("Murray & Roberts" or "Group")
Preliminary Report for the year ended 30 June 2010
Condensed consolidated statement of financial performance
for the year ended 30 June 2010
Audited Audited
Annual Annual
R millions 30.6.10 30.6.09*
Revenue 31 962 32 684
Earnings before interest, exceptional items, 2 449 3 512
depreciation and amortisation
Depreciation (649) (711)
Amortisation of intangible assets (25) (35)
Earnings before interest and exceptional 1 775 2 766
items
Exceptional items (note 3) 101 8
Earnings before interest and taxation 1 876 2 774
Net interest expense (193) (20)
Earnings before taxation 1 683 2 754
Taxation (470) (612)
Earnings after taxation 1 213 2 142
Income from equity accounted investments 14 2
Earnings from continuing operations 1 227 2 144
Profit from discontinued operations (note 4) 2 194
Earnings for the year 1 229 2 338
Attributable to:
- Owners of the parent 1 098 2 018
- Non-controlling interests 131 320
1 229 2 338
Earnings per share (cents)
- Diluted 371 678
- Basic 373 685
Earnings per share from continuing
operations (cents)
- Diluted 371 646
- Basic 372 653
Total dividend per ordinary share (cents)** 53 218
Operating cash flow per share (cents) 208 470
*Reclassified as a result of discontinued
operations
**Based on year to which dividend relates
SUPPLEMENTARY STATEMENT OF FINANCIAL
PERFORMANCE 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 held (7 658) (7 815)
by The Murray & Roberts Trust
Less: Weighted average number of shares held (676) (676)
by Murray & Roberts Limited
Less: Weighted average number of shares held (28 946) (28 946)
by the Letsema BBBEE trusts
Weighted average number of shares used for 294 613 294 456
basic per share calculation
Add: Dilutive adjustment for share options 1 233 3 257
Weighted average number of shares used for 295 846 297 713
diluted per share calculation
Headline earnings per share (cents) (note
5)
- Diluted 340 675
- Basic 341 683
Headline earnings per share from
continuing operations (cents)
- Diluted 339 644
- Basic 341 651
Condensed consolidated statement of comprehensive income
for the year ended 30 June 2010
Audited Audited
Annual Annual
R millions 30.6.10 30.6.09
Earnings for the year 1 229 2 338
Effects on cash flow hedges (11) 9
Foreign currency translation movements 123 (316)
Taxation related to components of other - (5)
comprehensive income
Total comprehensive income for the year 1 341 2 026
Attributable to:
- Owners of the parent 1 163 1 777
- Non-controlling interests 178 249
1 341 2 026
Condensed consolidated statement of cash flows
for the year ended 30 June 2010
Audited Audited
Annual Annual
R millions 30.6.10 30.6.09
Cash generated by operations before working 2 382 3 928
capital changes
Cash outflow from headlease and other (47) (25)
property activities
Increase in working capital (931) (1 290)
Cash generated from operations 1 404 2 613
Interest and taxation paid (net) (713) (1 054)
Operating cash flow 691 1 559
Dividends paid to owners of the parent (572) (625)
Dividends paid to non-controlling interests (95) (72)
Cash flow from operating activities 24 862
Property, plant and equipment and intangible (943) (2 262)
assets (net)
Acquisition of associates (341) -
Acquisition of non-controlling interests (59) (390)
Business disposals/acquisitions (net) 438 -
Other investments (net) 183 162
Other (net) (14) 5
Cash flow from investing activities (736) (2 485)
Net movement in borrowings 377 663
Treasury share acquisitions/disposals (net) 19 (251)
Cash flow from financing activities 396 412
Net decrease in cash and cash equivalents (316) (1 211)
Net cash and cash equivalents at beginning 2 876 4 278
of year
Effect of foreign exchange rates 6 (191)
Net cash and cash equivalents at end of year 2 566 2 876
Condensed consolidated statement of financial position
at 30 June 2010
Audited Audited
Annual Annual
R millions 30.6.10 30.6.09
ASSETS
Non-current assets 6 165 6 258
Property, plant and equipment 4 233 4 280
Investment property 52 510
Goodwill 554 490
Other intangible assets 72 59
Deferred taxation assets 343 305
Investment in associate companies 376 12
Other investments 216 483
Other non-current receivables 319 119
Current assets 14 339 15 422
Accounts and other receivables 2 207 2 690
Inventories 1 707 2 169
Amounts due from contract customers 6 614 5 900
Cash and cash equivalents** 3 811 4 663
Assets classified as held-for-sale 1 448 1 813
TOTAL ASSETS 21 952 23 493
EQUITY AND LIABILITIES
Total equity 7 177 6 634
Attributable to owners of the parent 6 203 5 581
Non-controlling interests 974 1 053
Non-current liabilities 2 383 1 447
Long-term provisions 84 78
Obligations under finance headleases* - 14
Long-term liabilities* 1 529 770
Other non-current liabilities 390 313
Deferred taxation liabilities 380 272
Current liabilities 12 142 14 370
Accounts and other payables 7 024 8 075
Amounts due to contract customers 3 273 3 601
Bank overdrafts* 1 245 1 787
Short-term loans* 600 907
Liabilities directly associated with assets 250 1 042
classified as held-for-sale
TOTAL EQUITY AND LIABILITIES 21 952 23 493
*Interest-bearing borrowings
**Includes restricted cash of R1 333 million
(2009: R1 766 million)
SUPPLEMENTARY INFORMATION (R millions)
Net asset value per share (cents) 1 869 1 682
Commitments
Capital expenditure
- Spent 1 093 2 368
- Authorised but unspent 955 1 529
Operating lease commitments 2 146 2 328
Contingent liabilities 345 261
Financial institution guarantees 9 693 9 806
Condensed consolidated segmental analysis
for the year ended 30 June 2010
Audited Audited
Annual Annual
R millions 30.6.10 30.6.09
Revenue*
Gautrain 1 242 2 627
Construction SADC 6 749 6 487
Engineering SADC 1 884 2 692
Construction Products SADC 7 053 6 167
Middle East 2 882 3 558
Cementation Group 5 345 5 962
Clough 5 753 4 185
Corporate and Investments 1 054 1 006
Continuing operations 31 962 32 684
Discontinued operations 545 2 684
32 507 35 368
*Revenue is disclosed net of inter-segmental
revenue. Inter-segmental revenue for the
Group is R729 million (2009: R962 million).
Earnings before interest and exceptional
items (EBIT)
Gautrain (619) 9
Construction SADC 582 515
Engineering SADC 112 447
Construction Products SADC 611 675
Middle East 300 350
Cementation Group 447 428
Clough 394 342
Corporate and Investments (52) -
Continuing operations 1 775 2 766
Discontinued operations 5 219
1 780 2 985
Segment assets
Gautrain 512 496
Construction SADC 2 939 2 294
Engineering SADC 1 010 1 167
Construction Products SADC 3 562 3 750
Middle East 3 133 2 521
Cementation Group 2 042 1 775
Clough 2 667 4 294
Corporate and Investments 1 821 2 228
17 686 18 525
Reconciliation of segment assets
Total assets 21 952 23 493
Deferred taxation assets (343) (305)
Current taxation receivable (112) -
Cash and cash equivalents (3 811) (4 663)
17 686 18 525
Notes
1. Basis of preparation
The preliminary report has been prepared in accordance with
the framework concepts and the measurement and recognition
requirements of International Financial Reporting Standards
(IFRS), the AC 500 standards as issued by the Accounting
Practices Board or its successor, Schedule 4 of the
Companies Act, No. 61 of 1973 (as amended) and comply with
the disclosure requirements of IAS 34: Interim Financial
Reporting. The condensed consolidated financial statements
have been prepared under the historical cost convention,
except for the revaluation of certain investments and
investment property.
The accounting policies used in the preparation of these
results are in accordance with IFRS and consistent in all
material respects with those used in the audited annual
financial statements for the year ended 30 June 2009, except
for the following:
IAS 23 (Amendment), Borrowing Costs (effective for
accounting periods beginning on or after 1 January 2009):
Borrowing costs that are directly attributable to the
acquisition, construction or production of a qualifying
asset in terms of IAS 23 form part of the cost of the asset
and should be capitalised. In prior financial periods
borrowing costs were expensed when incurred. This change in
accounting policy has no impact on prior financial periods
as the amendment is applied prospectively.
IAS 1, as revised in 2007, has introduced terminology
changes (including revised titles for the financial
statements) and changes in the format and content of the
financial statements.
IFRS 8 is a disclosure standard and requires operating
segments to be identified on the basis of internal reports
about components of the Group that are regularly reviewed by
the chief operating decision maker in order to allocate
resources to the segments and to assess their performance.
Following the adoption, the identification of the Group`s
reportable segments has changed. The prior year operating
segments have been reclassified accordingly.
The auditors, Deloitte & Touche, have issued their opinion
on the Group`s financial statements for the year ended 30
June 2010. The audit was conducted in accordance with
International Standards on Auditing. They have issued an
unmodified audit opinion. These summarised provisional
financial statements have been derived and are consistent in
all material respects with the Group financial statements. A
copy of their audit report is available for inspection at
the company`s registered office. Any reference to future
financial performance included in this announcement has not
been reviewed or reported on by the Group`s auditors.
2. Acquisitions
2.1 Acquisition of subsidiary
On 14 August 2009, Clough Limited (Clough) acquired a 70%
interest in Ocean Flow International LLC (Ocean Flow), a
SURF engineering company based in Houston, USA for
consideration of US$9,1 million. Ocean Flow has contributed
revenue of R73 million and attributable profit of R9 million
to Clough.
R millions 30.6.10
Net asset value acquired 22
Non-controlling interest* (4)
Fair value of net assets acquired 18
Goodwill 52
Purchase consideration 70
Goodwill is attributable to Ocean Flow`s position and
profitability in the subsea engineering and construction
management market, skilled workforce, expertise and
synergies expected to arise from the acquisition and is
accounted for on a provisional basis.
*Non-controlling interest is measured at the proportionate
share of their net identifiable assets.
2.2 Acquisition of associate
On 20 April 2010, Clough Limited (Clough) announced that it
had acquired a 31% interest in Forge Group Limited (Forge)
and subsequently entered into an alliance with Forge for
long-term strategic co-operation that is expected to
generate substantial benefits for both companies. At 30 June
2010 the carrying amount of Clough`s investment in Forge was
A$51,6 million.
3. Exceptional items
R millions 30.6.10 30.6.09
Property fair value adjustments 101 -
Profit on disposal of investments - 20
Loss on disposal of land and buildings - (12)
Exceptional profit 101 8
4. Profit from discontinued operations
A decision was taken to dispose of Johnson Arabia LLC, BRC
Arabia FZC and BRC Arabia LLC. The Group has identified a
buyer for the three businesses and expects the sale to be
completed within the next 12 months. The Group has not
recognised any impairment losses in respect of the
reclassification of assets and liabilities, to assets and
liabilities held-for-sale. The prior year includes financial
information for Petrosea.
R millions 30.6.10 30.6.09
Revenue 545 2 684
Earnings before interest and depreciation 36 314
Depreciation and amortisation (31) (95)
Earnings before interest and taxation 5 219
Net interest expense (3) (37)
Taxation - 12
Profit from discontinued operations 2 194
Non-controlling interests relating to 1 100
discontinued operations
Cash flows from discontinued operations
include the following:
Cash flow from operating activities 72 163
Cash flow from investing activities (40) (363)
Cash flow from financing activities (45) 149
Net decrease in cash and cash equivalents (13) (51)
5. Reconciliation of headline earnings
R millions 30.6.10 30.6.09
Earnings attributable to owners of the parent 1 098 2 018
Property fair value adjustments (101) -
Profit on disposal of subsidiaries (10) -
Profit on disposal of investments - (20)
Loss on disposal of land and buildings - 12
Other 1 -
Non-controlling interest effects on 4 -
adjustments
Taxation effects on adjustments 13 -
Headline earnings 1 005 2 010
6. Post balance sheet event
The Group received Competition Commission approval on 29
July 2010 for the disposal of investment properties. This
had no impact on the financial position of the Group at 30
June 2010.
The directors are not aware of any other matter or
circumstance arising since the end of the financial year,
not otherwise dealt with in the Group annual financial
statements, which significantly affects the financial
position at 30 June 2010 or the results of its operations or
cash flows for the year then ended.
Condensed consolidated statement of changes in equity
for the year ended 30 June 2010
Share Other Hedging and
capital capital translation
R millions and premium reserves reserves
Balances at 30 June 2008 968 123 213
Total comprehensive income - - (241)
for the year
Purchase/(disposal) of non- - - -
controlling interests (net)
Net movement in non- - - -
controlling interest loans
Movement in treasury shares (250) - -
Movement in share-based - 38 -
payment reserve
Transfer to non-controlling - (8) (2)
interests
Dividends declared and paid - - -
Balances at 30 June 2009 718 153 (30)
Total comprehensive income - - 65
for the year
Purchase/(disposal) of non- - - -
controlling interests (net)
Recognition of financial - (55) -
instrument on acquisition of
business
Disposal of business - - 7
Net movement in non- - - -
controlling interest loans
Movement in treasury shares 19 - -
Movement in share-based - 57 -
payment reserve
Transfer to non-controlling - 16 2
interests
Dividends declared and paid - - -
Balances at 30 June 2010 737 171 44
Retained Non-
controlling
R millions earnings interests Total
Balances at 30 June 2008 3 560 961 5 825
Total comprehensive income 2 018 249 2 026
for the year
Purchase/(disposal) of non- (213) (137) (350)
controlling interests (net)
Net movement in non- - 42 42
controlling interest loans
Movement in treasury shares - - (250)
Movement in share-based - - 38
payment reserve
Transfer to non-controlling - 10 -
interests
Dividends declared and paid (625) (72) (697)
Balances at 30 June 2009 4 740 1 053 6 634
Total comprehensive income 1 098 178 1 341
for the year
Purchase/(disposal) of non- (15) (143) (158)
controlling interests (net)
Recognition of financial - - (55)
instrument on acquisition of
business
Disposal of business - - 7
Net movement in non- - (1) (1)
controlling interest loans
Movement in treasury shares - - 19
Movement in share-based - - 57
payment reserve
Transfer to non-controlling - (18) -
interests
Dividends declared and paid (572) (95) (667)
Balances at 30 June 2010 5 251 974 7 177
Murray & Roberts ends this first decade of the 21st Century
significantly different and in better condition than through
the 1990`s, perhaps in its 108 year history to date.
However, it is stormy economic times in the world and the
Group is engaged with a number of significant projects that
are experiencing a variety of difficulties associated with
such times.
Brian Bruce, Group Chief Executive
A TURBULENT END TO A DECADE OF GREAT CHANGE
In finalising its Statement of Financial Performance for the
past year, the Group has given careful consideration to all
factors influencing its current and future performance
prospects. This includes its treatment of and response to a
number of challenges associated with its major projects and
ongoing volatility in some of its markets.
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.
The Group recognised a charge of R619 million to the
Statement of Financial Performance in the year, following a
thorough review of the estimated cost to completion of the
infrastructure works for the Gautrain Project, including the
additional cost of delivering Phase 1 in time for the 2010
FIFA World Cup.
This charge includes a best estimate of the remaining cost
to complete the project and takes cognisance of the
potential challenge of reaching settlement on all claims and
variations within a reasonable time, including through
arbitration.
The Statement of Financial Performance recognises a loss in
the Group`s fabrication operations of R86 million, being the
estimated costs of overcoming significant disruption caused
by delayed design and change in scope on the mechanical
works for the Medupi power station project. These costs form
part of a substantial claim.
The Transnet Locomotive Program is progressing to its
revised plan with almost two locomotives a week coming off
the production line at UCW.
A cumulative total revenue of R1,4 billion, being Amounts
Due from Contract Customers, has been recognised in the
Statement of Financial Position at 30 June 2010 (2009: R1,1
billion) as the Group`s share of uncertified revenue in
respect of claims and variation instructions on the Group`s
three major projects. Recognition of these assets is
supported by the Group`s contract partners and by
independent experts and advisors.
Adjudications of these extremely complex legal and financial
claims and variation instructions have yet to be finalised,
and may be subject to arbitration and/or negotiation. This
could result in a materially higher or lower amount being
finally awarded compared to that recognised in the Statement
of Financial Position at 30 June 2010.
Financial Year to 30 June 2010
Revenue at R32,0 billion (2009: R32,7 billion) is 2,2% down
on the previous year for continuing operations, with
Operating Profit down 36% to R1,8 billion (2009: R2,8
billion) at an Operating Margin of 5,6%, which is within the
Group`s strategic range of 5,0% to 7,5%.
The R619 million charge in respect of the infrastructure
joint venture for the Gautrain Project represents the
Group`s share of the increase in estimated cost to
completion of the project in excess of the position
recognised in the previous financial year.
A direct impact of increased working capital funding,
primarily to support both Gautrain and The UCW Partnership,
has seen a significant increase in net finance cost to R193
million (2009: R20 million).
The consequence of these matters is a 50% decline in diluted
headline earnings per share to 340 cents (2009: 675 cents).
Shareholder funds increased 11% to R6,2 billion (2009: R5,6
billion) giving an Attributable Earnings return of 18,6%
(2009: 38,6%) on average shareholder funds for the year.
This is temporarily below the Group`s target return of 20%.
A number of factors have influenced performance in the
financial year:
- While the Construction Economy conventionally lags general
economic activity, the South African construction industry
has largely been shielded in the year by the intensity of
activity required to deliver necessary infrastructure ahead
of the 2010 FIFA World Cup.
- The Bombela Consortium invested in delivering Phase 1 of
the Gautrain Project between Sandton and OR Tambo Airport
ahead of schedule and in time for this event.
- The Group successfully delivered a number of major world
class projects in the year including Green Point Stadium in
Cape Town and the Sorbonne University in Abu Dhabi.
- The Eskom Power Program has suffered significant start-up
delay and disruption, reducing expected revenues against
costs incurred in the year. A proactive investment by the
Group in response to these challenges will enable the
program to proceed expeditiously as the start-up problems
are systematically resolved by its clients.
- A number of companies have performed well ahead of
expectation in the year while for others, markets have been
negatively impacted by the global financial crisis. Wade
Walker was severely impacted by the loss of a major project.
- Working capital demand increased through the year,
particularly on Gautrain, which was funded through proceeds
on the disposal of non-core assets and short-term borrowing
resulting in a higher interest charge.
The year ahead will undoubtedly present both challenge and
opportunity to the Group and its operations. Amicable
settlement processes are in progress on the Dubai
International Airport Concourse 2 and other final accounts
in Middle East. Final completion of the Gautrain Project is
due within the new financial year and every effort is being
made under leadership of the Group to progress an acceptable
contractual outcome.
It is expected that the Eskom Power Program may advance
beyond its start-up problems in the first half of the year,
offering for the first time the opportunity for
uninterrupted progress of the works. The Transnet Locomotive
Program is in full progress and will be substantially
delivered by the end of the financial year.
The Group invested R1,1 billion (2009: R2,4 billion) in
capital expenditure during the year and ended the year with
a solid balance sheet and cash reserves of about R2,6
billion against various loan arrangements of about R2,1
billion.
Dividend
Attention is drawn to the formal dividend announcement
contained herein. The Directors are confident of the future
prospects for the Group and in terms of the published
Dividend Policy, have declared a final ordinary cash
dividend of 53 cents per share (2009: 133 cents per share).
This includes 21 cents per share (2009: 16 cents per share)
from Clough Limited.
Construction SADC
This cluster has been reorganised into two principal
operations, each comprising a number of subsidiaries
responsible for specific market segments. Concor has a
discipline focus on the civil engineering, roads &
earthworks and opencast mining markets of Southern Africa.
Murray & Roberts Construction has a regional building focus
in Gauteng, Western Cape, Botswana, Namibia and Zimbabwe and
will lead all major construction projects in South and
southern Africa, generally in partnership with Concor.
Consolidated revenues increased 4% to R6,8 billion (2009:
R6,5 billion) with operating profit up 13% to R582 million
(2009: R515 million) at a margin of 8,6% (2009: 7,9%).
Gautrain is tabled separately and the Group`s 67% share of
Medupi Civils is shared equally between Murray & Roberts
Construction and Concor.
*R millions Concor Construction RSA
2010 2009 2010 2009
Revenues* 3 558 3 156 2 612 2 952
Operating Profit* 367 338 140 130
Margin (%) 10,3 10,7 5,4 4,4
Assets* 1 824 1 264 933 868
People 3 852 3 940 3 590 2 390
LTIFR (Fatalities) 1,2 (0) 1,0 (3) 1,2 (2) 1,3 (2)
Order Book* 3 903 3 369 1 303 2 916
*R millions SADC Gautrain
2010 2009 2010 2009
Revenues* 579 379 1 242 2 627
Operating Profit* 75 47 (619) 9
Margin (%) 13 12,4 - -
Assets* 182 162 512 496
People 931 706 853 2 081
LTIFR (Fatalities) 2,6 (0) 4,7 (0) 4,2 (1) 4,0 (0)
Order Book* 1 327 317 833 1 950
Mr Trevor Fowler was appointed executive chairman of the
cluster in the year, succeeding Mr Keith Smith. Mr Cobus
Bester is managing director of Concor.
Engineering SADC
This cluster has been reorganised into two principal sectors
comprising Murray & Roberts Projects for EPC (engineer,
procure and construct) projects in the industrial, mining
and power markets of South Africa, with Murray & Roberts
Marine and Wade Walker separately focused on opportunities
in Rest of Africa, Middle East and Australasia. Genrec will
be incorporated into the Construction Products Cluster from
1 July 2010.
Consolidated revenues decreased 30% to R1,9 billion (2009:
R2,7 billion) with operating profit down to R112 million
(2009: R447 million) at a margin of 5,9% (2009: 16,6%).
*R millions Projects Wade Walker
2010 2009 2010 2009
Revenues* 744 675 313 1 058
Operating Profit* 65 (11) 35 328
Margin (%) 8,7 - 11,2 31,0
Assets* 535 163 142 421
People 1 423 561 464 1 458
LTIFR (Fatalities) 0,4 (0) 1,1 (0) 4,5 (0) 0,0 (0)
Order Book* 10 863 11 151 177 368
*R millions Marine Genrec
2010 2009 2010 2009
Revenues* 351 515 476 444
Operating Profit* 77 97 (65) 33
Margin (%) 21,9 18,8 - 7,4
Assets* 92 146 241 437
People 118 381 1 188 1 111
LTIFR (Fatalities) 1,2 (0) 0,0 (0) 1,5 (0) 10,9
(0)
Order Book* 502 222 4 926 6 742
Performance in the year was severely impacted by start-up
delays to the Eskom Power Program, including significant
disruption to Genrec production, and the loss of a major
project at the start of the year in Wade Walker.
Mr Keith Smith was appointed executive chairman of Murray &
Roberts Projects in January 2010. Mr Malose Chaba is
chairman of Murray & Roberts Marine and Wade Walker.
Construction Products SADC
The six companies forming this cluster 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 14% to R7,1 billion (2009:
R6,2 billion) with operating profit down 10% to R611 million
(2009: R675 million) at a margin of 8,7% (2009: 10,9%).
Hall
*R millions Steel Longmore
2010 2009 2010 2009
Revenues* 2 065 2 550 2 178 1 111
Operating Profit* 1 133 156 133
Margin (%) - 5,2 7,2 12,0
Assets* 1 653 1 669 792 1 040
People 1 713 2 089 787 788
LTIFR (Fatalities) 9,3 (0) 11,1 6,5 (0) 5,0 (1)
(0)
Rocla & Ocon &
*R millions Much Technicrete
2010 2009 2010 2009
Revenues* 2 289 1 916 521 590
Operating Profit* 418 350 36 59
Margin (%) 18,3 18,3 6,9 10,0
Assets* 757 660 360 381
People 1 757 1 755 1 395 1 439
LTIFR (Fatalities) 4,6 (0) 2,2 (0) 3,1 (0) 5,6 (0)
Murray & Roberts Steel experienced a volatile year, with
good volumes but low prices. Hall Longmore overcame its
production challenges and delivered almost the full NMPP
project before year-end. While Rocla experienced a slight
falloff in demand, Much Asphalt made a significant
contribution to the country`s 2010 FIFA World Cup
preparations by supplying its product to the road
construction market virtually 24 hours a day 7 days a week.
The housing and commercial building market remained at a low
ebb during the year.
Dr Orrie Fenn succeeded Mr Andrew Langham as executive
chairman of the cluster during the year and was appointed
chairman of Genrec, which will be incorporated into this
cluster from July 2010. Mr Rob Noonan is managing director
of Murray & Roberts Steel.
Cementation Group
The four constituent companies based in Johannesburg South
Africa, North Bay in Ontario Canada and Kalgoorlie West
Australia are coordinated out of London. The group provides
specialist engineering, construction and operational
services in the underground mining environment worldwide.
Cementation Sudamerica was established in Santiago Chile
during the year and the non-controlling interest in Murray &
Roberts Cementation was acquired.
Consolidated revenues decreased 10% to R5,3 billion (2009:
R6,0 billion) with operating profit up marginally to R447
million (2009: R428 million) at a margin of 8,4% (2009:
7,2%).
Cementation Cementation RUC
*R millions Africa Canada Cementation
2010 2009 2010 2009 2010 2009
Revenues* 3 569 3 440 1 372 2 137 404 385
Operating Profit* 270 198 138 199 39 31
Margin (%) 7,6 5,8 10,1 9,3 9,7 8,1
Assets* 1 031 966 738 588 273 221
People 14 498 11 530 1 123 704 189 149
LTIFR (Fatalities) 3,2 (4) 5,2 (3) 1,3 (0) 1,2 (0) 6,0 (0) 2,5 (0)
Order Book* 3 313 2 657 2 944 2 719 733 474
In what has been described as an amazing feat of
engineering, the Group`s Chilean partner Terraservices has
drilled a 690 metre relief hole to the 33 miners trapped
underground for 17 days at the San Jose mine. The Group`s
subsidiary company Terracem will now drill and expand a new
shaft using its specialist drilling equipment over the next
four months, to enable the trapped miners to be brought to
surface.
Murray & Roberts International executive director Mr Peter
Adams is chairman of the four constituent companies from
London together with financial director Mr Richard Pope. Mr
Henry Laas is managing director of Murray & Roberts
Cementation in South Africa and a director of the Australia
and South America companies.
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.
Primarily due to the impact of currency translation,
consolidated revenues decreased 19% to R2,9 billion (2009:
R3,6 billion) with operating profit down 14% to R300 million
(2009: R350 million) at a margin of 10,4% (2009: 9,8%).
The Group secured two contracts in the Kingdom of Saudi
Arabia with partner Saudi Oger in the year and tendered on
the Jeddah Airport Terminal which is still to be awarded.
Order Book in the region grew marginally to R4,4 billion
(2009: R4,2 billion).
Mr Nigel Harvey is managing director of the Group`s Middle
East operation. The resolution of final accounts in Dubai
and Bahrain will continue in the year ahead and the Group
remains confident of its outstanding rights of recovery.
Clough
The company is based in Perth West Australia and has secured
a significant position servicing the Australasian oil & gas
sector, particularly focused on the LNG (liquefied natural
gas) market. During the year the company acquired Houston-
based engineering company Ocean Flow International,
supported the start up of engineering business Peritus
International based in Perth, London and Houston and
acquired a significant non-controlling interest (31%) in ASX
listed mechanical and structural contractor Forge Group,
with which it has established a strategic operating
partnership.
Revenues increased 38% to R5,8 billion (2009: R4,2 billion)
with operating profit up 15% to R394 million (2009: R342
million) at a margin of 6,8% (2009: 8,2%).
The company has its highest order book in five years at R6,7
billion (2009: R2,5 billion).
Mr Mike Harding will retire as chairman of the company at
the upcoming annual general meeting and will be succeeded by
independent director Mr Keith Spence.
Full details on the Clough financial results for the year to
30 June 2010 and its prospects are published on
www.clough.com.au.
Corporate and Investments
Murray & Roberts Properties, Murray & Roberts Concessions,
Toll Road Concessionaires (Tolcon) and Union Carriage &
Wagon (UCW) do not naturally fall within the above clusters
and have been grouped as investments, each being the
responsibility of an appropriate and focused executive team.
Consolidated revenues increased 8% to R1,1 billion (2009:
R1,0 billion) with operating profit, excluding corporate
costs, up marginally to R293 million (2009: R248 million) at
a margin of 27,8% (2009: 24,7%).
BRC Arabia and Johnson Arabia have been classified as
discontinued operations.
The Group reached agreement to dispose of the majority of
its property investments in the year, for a cash
consideration of R610 million at a premium of R94 million to
book value. Competition Commission clearance for the
disposal was received in July 2010.
A fair value adjustment of R139 million (2009: R135 million)
has been recognised in the Statement of Financial
Performance relating to the Group`s concession assets. The
Group disposed of its shareholding in the Bakwena N4
concession during the year for a cash consideration of R253
million.
Health Safety and the Environment
The Group, its directors and management regret the loss of 9
(nine) employees in the year (2009: 9 employees) as a result
of fatal accidents in the workplace. Subsequent to year-end,
there have been a further 7 (seven) fatalities, including
the loss of 5 (five) lives in a fall of ground accident at
the Group`s Marikana underground mining operation.
The Group`s safety challenge persists primarily in South
Africa, although there were two fatalities in Middle East
during the year. A key safety indicator is the lost time
injury frequency rate (LTIFR) per million hours worked,
which continued a four year downward trend, finishing the
year at 2,20 (2009: 2,87) towards the Group threshold target
of 1,0.
Stop.Think has been the primary branding for health and
safety awareness since 2006, and the Group has recently
commissioned DuPont Sustainable Solutions to undertake a
safety diagnostic analysis across all its South African
operations. This will lead to a safety development plan for
each operation based on a number of available tools.
The Group has appointed Mr Thokozani Mdluli as the Group
Chief Safety Executive. He brings extensive experience to
his responsibility of supporting the Group`s leadership in
driving its health and safety practices.
Black Economic Empowerment and Employment Equity
The Group is a Level 4 contributor in compliance with the
codes of good practice and legislation concerning broad-
based black economic empowerment (BBBEE) in South Africa.
It has proved more challenging to meet employment equity
targets. It seems that a challenge exists in the mining,
industrial and construction sectors to create sufficient
critical mass to breach the tipping point in this respect.
The Group continues to strive for a better outcome.
Leadership and Skills Training and Development
Despite the market slowdown in South Africa, the Group has
continued its broad range of training and development
interventions and programs. Skills enhancement initiatives
are regularly undertaken in industry partnerships and in
association with the South African Department of Education.
The Group funded 167 (2009: 193) bursars at various academic
and technology universities in South Africa during the 2010
financial year and approximately 10 000 employees undertook
skills enhancement and training development.
About 150 Group and operations management between the ages
of 35 and 55 participated in a comprehensive personal career
assessment as part of the Group`s ongoing Leadership
Pipeline development and succession initiative. Overall, the
outcome is very positive, with good indicators for the
future leadership potential available to the Group.
Board of Directors and Management
Mr Trevor Fowler and Dr Orrie Fenn joined the Group during
the financial year and were appointed executive directors on
25 September 2009 and 20 November 2009 respectively. Mr
Malose Chaba was appointed as Group Head of Assurance and an
executive director with effect from 1 September 2009.
An independent review of Board effectiveness was conducted
during the second half-year. The review was generally
positive and the recommendations are being followed through
for implementation.
Order Book and Prospects
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 R68 billion at 30 June 2010 (2009: R71 billion).
The Group`s tender success ratio has declined in the year as
market conditions have tightened, with South Africa showing
little sign of recovery after the global financial crisis
and 2010 FIFA World Cup.
Order Book remained steady at about R42 billion (2009: R40
billion) with decidedly more activity in the Group`s
international markets.
The Group expects good growth in the year ahead, coming off
the low base caused by the Gautrain charge to the Statement
of Financial Performance. The level of this growth will
depend on order book development, particularly in South
Africa; settlement of major project final accounts;
reduction of working capital; and progress with the Eskom
Power Program.
The 2010 Annual Report will be published on or about 30
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 of the
Group to be held on Wednesday, 27 October 2010.
On behalf of the directors
Roy Andersen Brian Bruce Roger Rees
Chairman of the Group Chief Group Financial Director
Board Executive
Bedfordview
25 August 2010
NOTICE TO SHAREHOLDERS
Declaration of Final Ordinary Dividend (No. 117)
Notice is hereby given that the final ordinary cash dividend
No. 117 of 53 cents per share (2009: 133 cents per share) in
respect of the financial year ended 30 June 2010 has been
declared payable to shareholders recorded in the register at
the close of business on Friday 15 October 2010.
The salient dates for the final ordinary
cash dividend are as follows:
Last day to trade cum the dividend Friday, 8 October 2010
Shares commence trading ex dividend Monday, 11 October 2010
Record date Friday, 15 October 2010
Payment date Monday, 18 October 2010
Share certificates may not be dematerialised or re-
materialised between Monday, 11 October 2010 and Friday, 15
October 2010, both days inclusive.
On Monday, 18 October 2010 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 Monday 18 October 2010.
Shareholders who hold dematerialised shares will have their
accounts at their CSDP or broker credited on Monday, 18
October 2010.
By order of the Board
Y Karodia
Group Secretary
Bedfordview
25 August 2010
Registered office:
Douglas Roberts Centre
22 Skeen Boulevard
Bedfordview 2007
PO Box 1000
Bedfordview 2008
Registrar:
Link Market Services South Africa (Pty) Limited
11 Diagonal Street
Johannesburg 2001
PO Box 4844
Johannesburg 2000
Murray & Roberts Holdings Limited
Registration No. 1948/029826/06
Directors:
RC Andersen* (Chairman) BC Bruce (Managing & Group Chief
Executive) DD Barber* MP Chaba O Fenn1 TG Fowler ADVC
Knott-Craig* NM Magau* JM McMahon1* IN Mkhize* RW Rees1
AA Routledge* M Sello* SP Sibisi* RT Vice*
1British *Non-executive
Secretary:
Y Karodia
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.
e-mail: clientservice@murrob.com
website:www.murrob.com .mobi site:
http://murrob.mobi
Date: 25/08/2010 15:51:09 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
