| Fri 19 Aug 2011, 13:28 | | MUR - Murray & Roberts Holdings Limited - Updated trading statement |
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MUR
MUR
MUR - Murray & Roberts Holdings Limited - Updated trading statement
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")
UPDATED TRADING STATEMENT
Shareholders are referred to the trading statement released on SENS on 29
June 2011 whereby the Group advised that it would record a loss and that
diluted headline earnings per share and diluted earnings per share for the
financial year to 30 June 2011 from continuing operations would be lower by
more than 20% relative to the previous comparable period. It was indicated
in that announcement that the Group would provide more specific guidance
once the financial year end review of major projects was complete.
The board of directors of Murray & Roberts ("Board") met on 19 August 2011
to review the financial results for the year to 30 June 2011.
Due to the diversity of operations and markets, the Group has remained
resilient to conditions in its construction markets. Global mining markets
remain buoyant and the Cementation operations performed well in all regions.
Clough Limited produced an improved performance from its ongoing operations
focussed on the Western Australian LNG and minerals markets. Construction
activities in both southern Africa and the Middle East produced reduced
performances due to subdued market conditions, which also negatively
impacted the results from Construction Products. The Engineering business is
primarily focussed on the South African power projects. Following the
resolution of certain past disputes and the agreement of revised contractual
terms, future profitability on the power projects is now probable.
Discontinued operations in steel reinforcing bar manufacture and trading,
Johnson Arabia crane hire and Clough`s marine operations all produced losses
in the year to 30 June 2011. The sale of discontinued operations is well
advanced and management is targeting for the transactions to be concluded by
31 December 2011.
The Board has resolved to account for the following charges and contract
completion costs for the 12 months to 30 June 2011:
1) Ongoing operations - totalling approximately R2,0 billion made up
of:
a) SADC Construction - R1,15 billion:
* Gautrain Civils Joint Venture ("Gautrain") - Impairment of
contract receivables, estimated costs associated with water
ingress rectification work as well as increased costs to
complete the project by January 2012; and
* Provision for potential Competition Commission ("Commission")
penalties for identified possible transgressions by former
subsidiary company executives on contracts following the
filing of the Fast Track application to the Commission on 15
April 2011.
b) Marine Construction - R580 million of estimated costs to
complete the Gorgon Pioneer Materials Offloading Facility
("GPMOF") marine project undertaken by Murray & Roberts in
Australia. Project completion is expected by January 2012;
c) Middle East - R160 million for impairment of contract
receivables in respect of legacy contracts; and
d) Construction Products - R80 million impairment of intangible
assets.
2) Discontinued Operations - R330 million in respect of impairment of
assets held in businesses to be sold or closed, which is in
addition to the trading losses of R380 million.
As a consequence, it is expected the Group will record a diluted headline
loss per share and diluted loss per share of between 380c and 420c from
continuing operations for the financial year to 30 June 2011, compared to
the previous comparable period of diluted headline earnings per share of
314c and diluted earnings per share of 318c.
After accounting for the loss on discontinued operations, it is expected the
Group will record a diluted headline loss per share and diluted loss per
share of between 495c and 535c and between 575c and 615c respectively for
the financial year to 30 June 2011, compared to the previous comparable
period of diluted headline earnings per share of 340c and diluted earnings
per share of 371c.
Notwithstanding the deterioration in earnings in the past financial year,
the Group is well positioned for a return to profitability and growth in
earnings. Excluding the above mentioned charges and trading losses on
discontinued operations, the Group`s earnings before interest and tax
amounted to approximately R1,2 billion. Continued high levels of activity in
the markets of Cementation and Clough is likely to counter the subdued
construction markets in southern Africa and the Middle East. The Group`s
order book at 30 June 2011 was R55 billion.
The Group`s liquidity position improved substantially from the net debt
position reported at 31 December 2010 to a net cash position at 30 June
2011. Whilst future revenue flows are anticipated, funding required to
complete the Gautrain and GPMOF projects over the next six months is likely
to again place the Group in a net debt position by 31 December 2011.
Bombela Concession Company has submitted its Statement of Case in connection
with the Land Deficiencies and related disputes on the Gautrain Rapid Rail
Link project. The Board and management remain committed to the resolution of
all contractual disputes and collection of resultant claims including Dubai
International Airport, GPMOF and Medupi Civils Work.
As previously disclosed to shareholders, adjudication of these extremely
complex legal and financial claims and variation instructions within major
projects have yet to be finalised, and are subject to arbitration and/or
negotiation. Potential exists for a materially higher or lower amount being
finally awarded compared to that recognised in the Statement of Financial
Position at 30 June 2011.
The financial information on which this trading statement is based has not
been reviewed or reported on by the Group`s external auditors. Murray &
Roberts will publish its results for the financial year to 30 June 2011 on
or about Wednesday 31 August 2011.
Bedfordview
19 August 2011
Sponsor: Deutsche Securities (SA) (Pty) Ltd
Date: 19/08/2011 13:28:02 Produced by the JSE SENS Department.
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