| Wed 23 Feb 2011, 15:31 | | MUR - Murray & Roberts Holdings Limited - Unaudited interim results for the |
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MUR
MUR
MUR - Murray & Roberts Holdings Limited - Unaudited interim results for the
six months ended 31 December 2010 and withdrawal of cautionary announcement
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")
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2010
AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL PERFORMANCE
FOR THE SIX MONTHS ENDED 31 DECEMBER 2010
Unaudited Unaudited* Audited*
6 months to 6 months to Annual
R millions 31.12.10 31.12.09 30.06.10
Revenue 15,759 15,381 30,473
Earnings before interest,
exceptional items, depreciation
and amortisation 1,029 1,274 2,454
Depreciation (301) (303) (634)
Amortisation of intangible assets (13) (12) (25)
Earnings before interest and
exceptional items 715 959 1,795
Exceptional items (note 2) (795) - 101
(Loss)/earnings before interest
and taxation (80) 959 1,896
Net interest expense (116) (77) (177)
(Loss)/earnings before taxation (196) 882 1,719
Taxation (101) (186) (488)
(Loss)/earnings after taxation (297) 696 1,231
Income from equity accounted
investments 36 3 14
(Loss)/earnings from continuing
operations (261) 699 1,245
Loss from discontinued
operations (note 3) (326) (38) (16)
(Loss)/earnings for the period (587) 661 1,229
Attributable to:
- Owners of the parent (636) 576 1,098
- Non-controlling interests 49 85 131
(587) 661 1,229
(Loss)/earnings per share (cents)
- Diluted (215) 194 371
- Basic (215) 196 373
(Loss)/earnings per share from
continuing operations (cents)
- Diluted (115) 206 376
- Basic (115) 207 378
Earnings per share excluding
exceptional items (cents)
- Diluted 42 194 341
- Basic 42 196 343
Earnings per share from continuing
operations excluding exceptional
items (cents)
- Diluted 142 206 347
- Basic 142 207 348
Total dividend per ordinary
share (cents)** - 52 105
Operating cash flow per share
(cents) (315) (95) 208
*Reclassified as a result of discontinued operations
**Based on period to which dividend relates
SUPPLEMENTARY STATEMENT OF FINANCIAL PERFORMANCE INFORMATION
Unaudited Unaudited Audited
6 months to 6 months to Annual
31.12.10 31.12.09 30.06.10
Reconciliation of weighted average
number of shares in issue (000)
Weighted average number of
ordinary shares in issue 331,893 331,893 331,893
Less: Weighted average number
of shares held by The Murray &
Roberts Trust (6,812) (7,737) (7,658)
Less: Weighted average number
of shares held by Murray &
Roberts Limited (676) (676) (676)
Less: Weighted average number
of shares held by the
Letsema BBBEE trusts (28,946) (28,946) (28,946)
Weighted average number of
shares used for basic per
share calculation 295,459 294,534 294,613
Add: Dilutive adjustment
for share options 780 2 299 1 233
Weighted average number of
shares used for diluted per
share calculation 296,239 296,833 295,846
Headline (loss)/earnings
per share (cents) (note 4)
- Diluted (177) 200 340
- Basic (178) 202 341
Headline (loss)/earnings
per share from continuing
operations (cents) (note 4)
- Diluted (124) 211 345
- Basic (125) 213 347
Headline earnings per share
excluding exceptional items
(cents) (note 4)
- Diluted 80 200 310
- Basic 80 202 311
Headline earnings per share
from continuing operations
excluding exceptional
items (cents) (note 4)
- Diluted 133 211 315
- Basic 133 213 317
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 31 DECEMBER 2010
Unaudited Unaudited Audited
6 months to 6 months to Annual
R millions 31.12.10 31.12.09 30.6.10
(Loss)/earnings for
the period (587) 661 1,229
Effects of cash flow hedges (24) (4) (11)
Foreign currency translation
movements (169) 159 123
Total comprehensive (loss)/
income for the period (780) 816 1,341
Attributable to:
- Owners of the parent (817) 693 1,163
- Non-controlling interests 37 123 178
(780) 816 1,341
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 31 DECEMBER 2010
Unaudited Unaudited Audited
6 months to 6 months to Annual
R millions 31.12.10 31.12.09 30.06.10
Balance at beginning of
the period 7,177 6,634 6,634
Total comprehensive (loss)/
income for the period (780) 816 1,341
Purchase/(disposal) of
non-controlling interests (net) - (129) (158)
Recognition of financial
instrument on acquisition of business - (42) (55)
(Disposal)/acquisition of business - (13) 7
Net movement in non-controlling
interest loans (13) - (1)
Movement in treasury shares 11 14 19
Movement in share-based
payment reserve 26 19 57
Other movements in
non-controlling interests - (27) -
Dividends declared and paid (206) (478) (667)
6,215 6,794 7,177
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 31 DECEMBER 2010
Unaudited Unaudited Audited
6 months to 6 months to Annual
R millions 31.12.10 31.12.09 30.6.10
Assets
Non-current assets 6,171 6,243 6,165
Property, plant and equipment 3,936 4,456 4,233
Investment property 71 511 52
Goodwill 549 554 554
Other intangible assets 61 59 72
Investment in associate companies 509 34 376
Other investments 243 168 216
Other non-current receivables 802 461 662
Current assets 13,670 14,967 14,339
Inventories 1,380 2,441 1,707
Accounts and other receivables 3,027 3,335 2,207
Amounts due from contract customers 6,031 4,937 6,614
Cash and cash equivalents* 3,232 4,254 3,811
Assets classified as held-for-sale 1,442 397 1,448
TOTAL ASSETS 21,283 21,607 21,952
EQUITY AND LIABILITIES
Total equity 6,215 6,794 7,177
Attributable to owners of the parent 5,267 5,856 6,203
Non-controlling interests 948 938 974
Non-current liabilities 2,646 1,758 2,383
Long-term liabilities** 2,050 1,403 1,529
Obligations under finance
headleases** - 8 -
Long-term provisions 79 53 84
Other non-current liabilities 517 294 770
Current liabilities 12,199 13,055 12,142
Amounts due to contract customers 4,775 4,253 3,273
Accounts and other payables 5,231 6,044 7,024
Short-term loans** 625 859 600
Bank overdrafts** 1,568 1,899 1,245
Liabilities directly
associated with assets
classified as held-for-sale 223 - 250
TOTAL EQUITY AND LIABILITIES 21,283 21,607 21,952
* Includes restricted cash of R652 million (2009: R854 million and June
2010: R1,333 million)
** Interest-bearing borrowings
SUPPLEMENTARY INFORMATION
Unaudited Unaudited Audited
6 months to 6 months to Annual
R millions 31.12.10 31.12.09 30.6.10
Net asset value per share (cents) 1,587 1,764 1,869
Commitments
Capital expenditure
- Spent 422 592 1,093
- Authorised but unspent 619 720 955
Operating lease commitments 2,148 2,230 2,146
Contingent liabilities 555 391 345
Financial institution guarantees 9,260 9,037 9,693
CONDENSED CONSOLIDATED SEGMENTAL ANALYSIS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2010
Unaudited Unaudited* Audited*
6 months to 6 months to Annual
R millions 31.12.10 31.12.09 30.6.10
Revenue**
Construction SADC 3,238 4,522 7,991
Engineering 1,838 1,080 1,884
Construction Products 2,731 3,148 6,999
Middle East 1,273 1,379 2,882
Cementation Group 3,524 2,470 5,345
Clough 3,021 2,635 5,081
Corporate and Investments 134 147 291
Continuing operations 15,759 15,381 30,473
Discontinued operations 570 643 2,034
16,329 16,024 32,507
Earnings before interest
and exceptional items (EBIT)
Construction SADC 98 3 (37)
Engineering 38 62 112
Construction Products 122 268 617
Middle East 69 184 300
Cementation Group 290 217 447
Clough 128 259 414
Corporate and Investments (30) (34) (58)
Continuing operations 715 959 1,795
Discontinued operations (401) (41) (15)
314 918 1,780
* Reclassified as a result of discontinued operations
** Revenue is disclosed net of inter-segmental revenue. Inter-segmental
revenue for the Group is R227 million (2009: R378 million and June 2010: R729
million).
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2010
Unaudited Unaudited Audited
6 months to 6 months to Annual
R millions 31.12.10 31.12.09 30.6.10
Cash (utilised)/generated
by operations before
working capital changes (151) 863 2,382
Cash outflow from headlease
and other property activities (3) (12) (47)
Increase in working capital (644) (740) (931)
Cash (utilised)/generated
by operations (798) 111 1,404
Interest and taxation
paid (net) (248) (427) (713)
Operating cash flow (1,046) (316) 691
Dividends paid to owners
of the parent (154) (396) (572)
Dividends paid to non-
controlling interests (52) (82) (95)
Cash flow from operating
activities (1,252) (794) 24
Property, plant and equipment
and intangible assets (net) (375) (552) (943)
Acquisition of associate companies (7) - (341)
Acquisition of non-
controlling interests - (59) (59)
Business (acquisitions)/
disposals (net) (31) 581 592
Assets classified as
held-for-sale (net) 349 - (154)
Other investments (net) 43 (23) 183
Other (net) 10 1 (14)
Cash flow from investing activities (11) (52) (736)
Net increase in borrowings 527 360 377
Treasury share disposals/
(acquisitions) (net) 11 14 19
Cash flow from financing activities 538 374 396
Net decrease in cash and
cash equivalents (725) (472) (316)
Net cash and cash equivalents
at beginning of period 2,566 2,876 2,876
Effect of foreign exchange rates (177) (49) 6
Net cash and cash equivalents at
end of period 1,664 2,355 2,566
NOTES
1. Basis of preparation
The interim 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 successor, Schedule 4 of the Companies Act,
No. 61 of 1973 (as amended) and complies 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 2010.
This interim report has not been reviewed or audited by the Group`s
auditors.
2. Exceptional items
R millions 31.12.10 31.12.09 30.6.10
Property fair value adjustments - - 101
Impairment of contract current
assets (410) - -
Contract completion expenses (385) - -
Exceptional (loss)/profit (795) - 101
3. Loss from discontinued operations
During the current financial year the Group took a decision to discontinue
with its steel melt shop and reinforcing bar rolling mills. The Group is
also in a process of exiting from its property development activities
undertaken by Clough as well as disposing of its interest in its crane hire
and steel reinforcing bar trading operations in the Middle East.
R millions 31.12.10 31.12.09 30.6.10
Revenue 570 643 2,034
(Loss)/earnings before
interest and depreciation (396) (19) 31
Depreciation (5) (22) (46)
Loss before interest
and taxation (401) (41) (15)
Net interest expense (8) (17) (19)
Taxation 83 20 18
Loss from discontinued
operations (326) (38) (16)
Non-controlling interest
relating to discontinued operations 30 4 2
Cash flows from discontinued
operations include the following:
Cash flow from operating activities (94) 152 199
Cash flow from investing activities (34) (74) (119)
Cash flow from financing activities (34) (164) (292)
Net decrease in cash and cash
equivalents (162) (86) (212)
4. Reconciliation of headline earnings
R millions 31.12.10 31.12.09 30.6.10
(Loss)/earnings attributable to
owners of the parent (636) 576 1,098
Property fair value adjustments - - (101)
Profit on disposal of subsidiaries (16) - (10)
(Profit)/loss on disposal of
property, plant and
equipment (13) 5 (7)
Impairment of property,
plant and equipment 181 13 7
Other - - 1
Non-controlling interest
effects on adjustments (2) - 4
Taxation effects on adjustments (39) - 13
Headline (loss)/earnings (525) 594 1,005
Adjustments for discontinued
operations:
Loss from discontinued operations 326 38 16
Non-controlling interest (30) (4) (2)
Impairment of property, plant
and equipment (181) - -
Other (9) - -
Non-controlling interest
effects on adjustments 8 - -
Taxation effects on adjustments 43 - -
Headline (loss)/earnings from
continuing operations (368) 628 1,019
Note: Headline earnings excluding exceptional items was calculated by
excluding exceptional items expense of R795 million (June 2010: R101 million
income) and tax effect thereon of R34 million (June 2010: R14 million).
COMMENTARY
Withdrawal of Cautionary Announcement
Shareholders are referred to the cautionary announcement released through
SENS on 28 January 2011 and are advised that caution is no longer required to
be exercised when dealing in the Group`s securities.
Revenue Recognition
Murray & Roberts is currently defined in terms of the long duration major
project nature of its order book. These projects are primarily in the South
African public sector. In every such project, Murray & Roberts and its joint
venture partners have experienced significant changes in scope which have
caused delay and disruption.
These significant changes in scope can present complex challenges to both
contractor and client, the inevitable outcome of which is an increase in the
cost of construction. Without pre-funding for these scope increases, working
capital will increase significantly.
Dubai International Airport and Gautrain were the Group`s first major
projects in recent times. Each project is in an arbitration process for the
resolution of outstanding matters of dispute.
The Group has reviewed its statement of financial position against a backdrop
of increased uncertainty in Middle East and a developing trend of delayed
certification on the South African power projects, albeit these projects are
still cash positive. In the context of these challenging times the Group has
taken a R410 million impairment on contracts-in-progress and an exceptional
charge of R385 million of current year expenses against which revenue
recovery is not certain. This represents an exceptional item of R795 million
in the half-year accounts.
Subsequent to the above impairment, uncertified revenues in the statement of
financial position at 31 December 2010 is R1,25 billion (30 June 2010: R1,4
billion) for major projects. Depending on the outcome of various arbitration
proceedings relating to complex claims on major projects, the possibility of
a material recovery exists which the Group at this stage is unable to
confidently quantify.
Performance and Order Book
The Group has recorded an attributable loss of R636 million (2009: R576
million profit) in the six months to 31 December 2010, including exceptional
items of R795 million and a loss on discontinued operations of R326 million
primarily relating to the rationalisation of the Group`s reinforcing steel
operations and operating losses in Johnson Arabia.
For continuing operations, revenue for the six months to 31 December 2010 has
increased by 2,5% to R15,8 billion (2009: R15,4 billion) with operating
profit excluding exceptional items reduced by 25% to R715 million (2009: R959
million) at an operating margin of 4,5% (2009: 6,2%).
Excluding exceptional items, diluted headline earnings per share for
continuing operations is down 37% at 133 cents (2009: 211 cents) and earnings
per share for continuing operations is down 31% at 142 cents (2009: 206
cents).
The Group Order Book at 31 December 2010 was steady at R50 billion with an
embedded margin within the Group`s strategic range of 5,0% to 7,5%. This
compares to R49 billion at 30 September 2010 and R42 billion at 30 June 2010
and bodes well for the future prospects of the Group.
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 R59 billion at 31 December 2010 (30 June 2010:
R68 billion). There were 239 opportunities in the pipeline at the half-year
and the data indicates that more work is entering the market. However, there
are fewer new major projects.
For the period under review:
Construction SADC: Revenues declined 28% to R3,2 billion (2009: R4,5 billion)
with EBIT at R98 million (2009: R3 million after a R220 million revenue
deferment on Gautrain) and a margin of 3,0%. Order Book is R7,6 billion (June
2010: R7,4 billion).
Engineering: Revenues increased 70% to R1,8 billion (2009: R1,1 billion) with
a decline in EBIT to R38 million (2009: R62 million). No operating profit has
been taken on the Power Program pending resolution of outstanding matters
with the main contractor. Order Book is stable at R17,3 billion (June 2010:
R16,7 billion).
Construction Products: Revenues declined 13% to R2,7 billion (2009: R3,1
billion) with a decline in EBIT to R122 million (2009: R268 million). UCW is
now recorded in this cluster. This decline in performance is largely
attributable to difficult trading conditions in the sector.
Middle East: Revenues declined 8% to R1,3 billion (2009: R1,4 billion) with a
63% decline in EBIT to R69 million (2009: R184 million), which reflects a
conservative view of tighter market conditions in the region. Order Book is
at R3,3 billion (June 2010: R4,4 billion).
Cementation Group: Revenues increased 43% to R3,5 billion (2009: R2,5
billion) with a 34% increase in EBIT to R290 million (2009: R217 million) at
a margin of 8,2%. Order Book increased significantly to R12,9 billion (June
2010: R7,0 billion) primarily in South Africa.
Clough Limited: Revenues increased 15% to R3,0 billion (2009: R2,6 billion)
but a 51% reduction in EBIT to R128 million (2009: R259 million) is primarily
as a result of a soft marine construction market in the half-year. Order Book
increased substantially to R8,7 billion (June 2010: R6,7 billion). Full
details of the Clough financial results for the half-year and its prospects
are published on its website www.clough.com.au.
The current market value of the Group`s investment in Clough is approximately
R3,0 billion, which exceeds the Group`s investment in the company by more
than R1,4 billion.
Corporate & Investments: Revenue of R134 million (2009: R147 million) was
recorded in Tolcon, Concessions and Properties at an EBIT of R101 million
(2009: R91 million). This has been offset by Group corporate costs of R111
million (2009: R110 million) and IFRS 2 share-based expenses amounting to R20
million (2009: R15 million).
Group Cash Position
A slowdown in EBIT generation, funding of working capital on Gautrain and
utilisation of advance payments during the half-year has led to a decrease in
the Group`s cash balances at 31 December 2010. Cash less bank overdraft is
R1,7 billion (R2,6 billion: 30 June 2010) and net debt is R1,0 billion (R437
million net cash: 30 June 2010). In South Africa, net debt is R2,4 billion
(R1,6 billion: 30 June 2010).
The Group`s South African banking headroom at 31 December 2010 is in excess
of R1,0 billion, with operating cash flow expected to be positive and net
debt levels anticipated to remain steady for the remainder of the year.
In South Africa, the Group is geared to a higher level than desirable and is
engaged in a number of strategic initiatives to reduce debt on the South
African statement of financial position, including but not limited to the
disposal of discontinued operations.
Dividend
Taking into consideration the expected timing for resolution of major project
disputes, the Board has not declared an interim dividend for the period under
review. The Board will continue to review the financial position of the Group
and is committed to the continuation of dividend payments as soon as
conditions allow, which include progress with the resolution of major project
disputes. In line with its policy, there is no interim dividend declaration
from Clough.
Gautrain Project
Bombela Concession Company (Pty) Ltd (Bombela) holds the 19,5 year concession
from Gauteng Provincial Government (Gauteng) for the construction and
operation of the Gautrain System (Project). Bombela successfully delivered
Phase 1 of the Project ahead of the 2010 FIFA World Cup and passenger
utilisation continues to exceed expectations.
Murray & Roberts is positive on the future value prospects of the concession
and has committed about R190 million to Bombela`s equity which includes an
increase in its shareholding from 25% to 33% (subject to required approvals).
Murray & Roberts has a 45% share in the underlying infrastructure joint
venture (BCJV), has committed about R2,0 billion of working capital
requirements in BCJV over the past 18 months, and committed a further R150
million in an agreement with its partners to fund the acceleration of Phase 2
construction for completion by the end of the financial year.
There are nine active arbitration proceedings, all of which involve highly
complex legal and commercial argument. The first of these arbitrations has
recently been determined, with important rulings in favour of Bombela and
BCJV in respect of the delay and disruption claim associated with late access
to and procurement of land by Gauteng.
The Group believes in the validity and merits of the BCJV and Bombela claims,
but cannot predict with certainty the timing of the resolution of the
disputes and payment of claims.
Eskom Power Program
Murray & Roberts is involved in five contracts for the construction of
Eskom`s Medupi and Kusile Power Stations. The first three listed below are
directly with Eskom and the latter two are as the main subcontractor to a
consortium of Hitachi Power Africa and Hitachi Power Europe (Hitachi).
- Medupi Civil Works in a 67% joint venture with a contract value of R2,9
billion.
- Medupi Chimneys and Silos in a 40% joint venture with a contract value of
R830 million.
- Kusile Chimney in a 40% joint venture with a contract value of R690
million.
- Medupi Boiler House structural and mechanical works with a contract value
of R6,7 billion.
- Kusile Boiler House structural and mechanical works with a contract value
of R6,5 billion.
Based on the above original contract values, the Group Order Book at 31
December 2010 includes R19 billion of outstanding value on these five
projects.
First access by Murray & Roberts and its partners to both the Medupi and
Kusile projects in respect of these contracts was and remains delayed by
about 12 months. In the case of the Civil Works Contract at Medupi, a 14,5
month extension to the time for completion of the works has been awarded to
date.
Work completed on the Civil Works Contract at Medupi exceeds its original
contract value and scope of works while only 50% complete. The majority of
all work being performed at present relates to variations in scope and
acceleration of the works.
The joint venture continues with the works as required by the contract, but
is utilising its advance payment to fund the uncertified value of scope
increases and acceleration.
Murray & Roberts and Hitachi are engaged in a voluntary mediation process to
attempt resolution of the many issues that have arisen between the parties
concerning the design, fabrication and complexity of structural steelwork for
the Medupi and Kusile Boiler House structures. It is expected that the
parties will be capable of reaching an agreement on a new way forward.
The Boiler House projects remain cash positive for now and Murray & Roberts
believes in the validity and merits of its claims under the various
contracts.
Competition Matters
Murray & Roberts was one of the first construction sector companies to have
engaged proactively with the Competition Commission. A decision and actions
were taken by management in 2000 to end collusive industry practices, which
was followed in 2006 by a further initiative to root out any remaining
collusive practices.
All improper conduct that was identified and which, based on legal advice,
was considered prosecutable in terms of the Competition Act, was proactively
brought to the Commission`s attention. Murray & Roberts has cooperated fully
with the Commission and this has been recognised by the Commission.
Following the recent media statement by the Competition Commission and a
subsequent meeting by management with the Commissioner, Murray & Roberts has
intensified its internal investigations, including forensic interrogation of
its contracting operations, in a further effort to uncover past acts of
collusion. This includes further internal forensic investigation into the
Greenpoint Stadium, the results of which, if warranted, will be provided to
the Commission on completion.
Murray & Roberts will continue to work with the Competition Commission in the
best interests of the Group and to eliminate any possible collusion from the
construction industry.
Discontinued Operations
The Group previously informed shareholders of its intention to close and/or
dispose of underperforming assets. These include Johnson Arabia, BRC Arabia,
all or part of the Group`s reinforcing steel business and outstanding
properties in Clough. These businesses have been reported on and disclosed as
discontinued operations (refer note 3).
Buyers have been identified for all of these assets other than some of the
Clough properties and the Group is in negotiations that should lead to
completion of the disposals within the remainder of the current calendar
year. Other than the Group`s reinforcing steel business, in reclassifying
these assets and liabilities as held-for-sale, the Group has not yet
identified or recognised any potential impairment losses to date or in the
half-year accounts.
Health Safety and the Environment
The Group, its directors and management regret and are concerned at the loss
of 10 (ten) employees in the period as a result of fatal accidents in the
South African workplace. These incidents have occurred primarily in the
Group`s mining operations, where there has been a further fatality subsequent
to the half-year.
Stop.Think is the primary branding for health and safety awareness in Murray
& Roberts. The Group recently partnered with DuPont Sustainable Solutions in
its South African operations, which is currently busy with a comprehensive
safety diagnostic analysis.
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 half-year at 2,74 towards the Group threshold target of 1,0.
Board of Directors and Management
The Board is well advanced with its Group Leadership Succession Plan and
expects to announce the appointment of a chief executive successor before the
end of the current financial year. The Chief Executive and Financial Director
will continue to lead the Group through to retirement on 30 June 2011 after
eleven years at the helm of Murray & Roberts.
Over this period, Murray & Roberts established itself as South Africa`s
leading construction and engineering group, with a global footprint serving
key natural resources markets. This was during a period defined by global
socio-economic volatility and in South Africa, Government`s infrastructure
investment plan, including for the 2010 FIFA World Cup.
Mr Bill Nairn joined the board as an independent non-executive director on 30
August 2010. He brings extensive local and international experience in the
mining and resources sectors.
Mr Malose Chaba has resigned as a director and executive effective 14
February 2011 after seven years in the Group. The Group wishes him well in
his future endeavours.
Mr Henry Laas has been appointed executive chairman of the Engineering
Cluster where he has assumed the responsibilities of Mr Chaba and Mr Keith
Smith who retires at end-March 2011.
Prospects
The second half of the financial year is projected to show an increase in
revenues in Middle East and Cementation with no growth projected for the
South African Construction and Construction Products clusters and Group
Investments.
The primary opportunity for the Group in the second half-year is to support
the work in BCJV to secure its payment rights on the Gautrain Project. The
Group is hopeful that delays in certification within the Power Program will
reverse. It is unlikely that the final account arbitration on Dubai
International Airport will be completed before year-end.
While there is still weakness and margin pressure in the construction markets
of Middle East and South Africa, the Group expects the Budget to reinforce
Government`s commitment to the acceleration of its infrastructure program.
The Group has invested over some time in the development of its strategy to
re-engage the growing potential of new investment opportunity that will flow
from the development of resources and infrastructure markets in the Rest of
Africa.
The information on which this prospects statement is based has not been
reviewed nor audited by the Group`s external auditors.
On behalf of the directors
Roy Andersen
Chairman of the Board
Brian Bruce
Group Chief Executive
Roger Rees
Group Financial Director
Bedfordview
23 February 2011
Registrar:
Link Market Services South Africa (Pty) Limited
11 Diagonal Street,
Johannesburg 2001
PO Box 4844
Johannesburg 2000
Registered office:
Douglas Roberts Centre,
22 Skeen Boulevard,
Bedfordview 2007
PO Box 1000
Bedfordview 2008
website: www.murrob.com
.mobi site: http://murrob.mobi
e-mail: clientservice@murrob.com
Murray & Roberts Holdings Limited Registration No. 1948/029826/06
Directors:
RC Andersen* (Chairman)
BC Bruce (Managing & Group Chief Executive)
DD Barber*
O Fenn 1
TG Fowler
ADVC Knott-Craig*
NM Magau*
JM McMahon 1*
WA Nairn*
RW Rees 1
AA Routledge*
M Sello*
SP Sibisi*
RT Vice*
1 British
*Non-executive
Secretary:
AR Langham (acting)
Our commitment to sustainable earnings growth and value creation is non-
negotiable.
Bedfordview
23 February 2011
Sponsor: Deutsche securities (SA) Pty Limited
Date: 23/02/2011 15:31:01 Produced by the JSE SENS Department.
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