| Mon 27 Aug 2001, 0:00 | | Murray & Roberts Holdings Limited |
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Registration number 1948/029826/06)
("Murray & Roberts" or "the Group")
share code=MUR and ISIN=ZAE000008983
Preliminary report for the year ended 30 June 2001
Highlights
Headline earnings 76 cents per share (+ 111%)
Strong operating cash flow
Repositioned for growth
Rebuilding Murray & Roberts
The Group has continued the implementation of its "change strategy for
sustainable value." Divisional structures have been eliminated, the
corporate office consolidated and a policy of aligning remuneration with
business strategy has been implemented. The executive leadership team has
been significantly strengthened. The results for the year and the
improvement in shareholders' value, are seen as the first performance
benefits of this strategy.
Segmental analysis
Year ended Year ended
30 June 2001 30 June 2000
(R millions) Revenue EBIT Revenue EBIT
Building and civil
engineering 2 990 55 2 989 71
Industry and mining 1 328 73 1 053 49
Engineered products 1 628 35 1 847 (19)
Supplies and services 2 545 120 2 823 43
Corporate 44 (65) 21 (53)
8 535 218 8 733 91
Unitrans - - 4 585 203
8 535 218 13 318 294
Note:
The above segmental analysis reflects the results including certain
divisional overhead costs in the clusters. As part of the Rebuilding Murray
& Roberts strategy, divisional head offices have been disbanded and in
future the corporate overhead will be aggregated and reflected as such in
the segmental analysis. The analysis is restated below to set the base for
future segmental reporting:
Year ended Year ended
30 June 30 June
2001 2000
(R millions) restated restated
Building and civil engineering 84 99
Industry and mining 77 54
Engineered products 42 (8)
Supplies and services 124 51
Corporate (109) (105)
218 91
COMMENTS
PERFORMANCE
The Group has achieved a significantly improved operating performance as
compared to the previous year with headline earnings of 76 cents per share.
All business clusters have reported meaningful EBIT contributions and the
Group's operating cash flow was strongly positive. The results of these
improvements are reflected in a stronger balance sheet and a 20% increase in
the net asset value per share over the year.
The challenging conditions affecting building and civil engineering
activities in southern Africa have coincided with a period of consolidation
in the Group's international markets and this cluster has recorded a lower
EBIT contribution than in the previous year.
The industry and mining cluster has benefited from the inclusion of Booker
Tate for the full year and JCI Projects, the acquisition of which was
finalised during the year.
A major turnaround has been achieved in all of the engineered products
activities. Following the liquidation of the AWI company in Canada, a
disposal process is underway in respect of the Port Elizabeth and UK wheel
manufacturing facilities.
The supplies and services cluster has produced a pleasing turnaround result
with a significant EBIT improvement on lower revenue. This improvement has
been achieved by virtually all of the individual business units in this
cluster.
DISPOSALS
As previously advised to shareholders, the business of Main Pipesystems was
sold with effect from 1 March 2001. A number of non core companies have been
sold or closed during the year. Since the year end, the sale of the Fielders
division of Harvey Roofing Products has been finalised and Woodline Timber
Industries sold, subject to Competition Commission approval.
EXCEPTIONAL ITEMS
The interim report published on 28 February 2001 advised that the property
headlease provision had been increased by R37 million in the first six
months. The Board has considered it prudent to increase this provision by a
further R11 million in the second half. Some progress has been made in
resolving this major issue and certain headleases were settled, facilitated
by the utilisation of the related provisions raised at 30 June 2000.
A net cost of R25 million has been incurred in the year under review due to
business restructuring and includes a further write down of certain under-
performing investments. This has been partially offset by a recovery of R10
million on the provision made at 30 June 2000 against the outstanding debtor
on the sale of Astas.
As advised in the interim report, the Group realised R60 million relating to
an investment, the value of which had previously not been recognised.
NET FINANCE COSTS
Net finance costs reflect a reduction on the prior year due to the strong
operating cash flow and the receipt of disposals proceeds. The net cost is
after the impact of a gain of R15 million on the conversion of the Group's
surplus treasury funds held offshore (2000: R17 million).
INCOME FROM ASSOCIATE
Unitrans has reported a 19% increase in total earnings per share. The
Group's reduced shareholding has resulted in a lower contribution from this
associate.
SHARE REPURCHASE
At a special general meeting held on 29 January 2001, shareholders approved
the specific repurchase of 14 074 921 shares for the sum of R43 210 007, an
effective cost of 307 cents per share. The repurchased shares were delisted
from the JSE Securities Exchange
South Africa and cancelled on 2 February 2001. The number of shares in issue
accordingly reduced to 331 892 619 and the average number of shares in issue
for the year to 30 June 2001 reduced to
340 102 990.
PROSPECTS
The challenge of Rebuilding Murray & Roberts moves into its next phase on a
solid foundation. The Group has moved from a turnaround situation to a
strategic performance model that enables sustainable growth and value
creation. The operational restructure of the Group is in place to achieve
this. In particular, the unitary structure will facilitate greater synergy
among operating entities. In support of the growth targets, your Board
anticipates substantially increased capital expenditure in the year ahead.
No improvement is forecast in the domestic building and civil engineering
markets. The markets for our mining, industrial and manufacturing activities
remain positive. A number of interventions are underway to review systems
and cost structures and the necessary actions to further improve shareholder
value will be implemented.
The Board of Unitrans Limited has published its prospects under separate
notice.
Overall, the Board expects that the Group will achieve further meaningful
growth in earnings per share in the forthcoming year.
DIVIDEND
The Board has determined that no dividend will be paid in respect of the
year ended 30 June 2001. The achievement of the Group's growth and
performance objectives will enable the resumption of dividend payments in
2002.
STRATE (Share Transactions Totally Electronic)
The JSE Securities Exchange South Africa has advised that the Company's
shares will be dematerialised on 26 November 2001 with electronic trading
commencing on 18 December 2001 and first electronic settlements on 28
December 2001. Relevant information will be mailed to shareholders in due
course.
On behalf of the Board
Bedfordview
27 August 2001
DC Brink Chairman BC Bruce Chief Executive RW Rees Financial Director
DIRECTORS: DC Brink (Chairman), BC Bruce* (Chief Executive),
BN Bam, AJ de Nysschen*,WP Esterhuyse, SE Funde, KJ Grov *,
PG Joubert, SJ Macozoma, AJ Morgan, RW Rees*, AA Routledge, KE Smith*, JS
Stanbury*, JJM van Zyl,
*Executive SECRETARY: LJ Lindsay
"Our commitment to sustainable earnings growth and value creation is not
negotiable" Brian Bruce
Further information available at www.murrob.com/ annual report online 28
September 2001
The audited consolidated results for the year ended 30 June are as set out
below:
Summarised consolidated income statement
Pro forma
Actual year year ended Actual
ended 30 June 2000 year ended
(R millions) 30 June 2001 (Note 1) 30 June 2000
Revenue 8 535 8 733 13 318
Earnings before finance
costs, exceptional items,
depreciation and
amortisation (EBITDA) 454 329 662
Depreciation (232) (238) (368)
Amortisation of
goodwill (Note 2) (4) - -
Earnings before finance
costs and exceptional
items (EBIT) 218 91 294
Exceptional items (3) (697) (697)
Earnings/(loss) before
finance costs and taxation 215 (606) (403)
Net finance costs (6) (44) (64)
Earnings/(loss)
before taxation 209 (650) (467)
Taxation (27) 7 (39)
Earnings/(loss)
after taxation 182 (643) (506)
Income from associates 71 73 -
Minority
shareholders' interest (1) (1) (65)
Earnings/(loss)
attributable to
ordinary shareholders 252 (571) (571)
Reconciliation of
headline earnings
Attributable earnings 252 (571) (571)
Adjust - Exceptional items 3 697 697
- Amortisation
of goodwill 4 - -
Headline earnings 259 126 126
Average number of
ordinary shares
in issue (`000) 340 103 345 968 345 968
Earnings per share - total 74c (165c) (165c)
- headline 76c 36c 36c
Operating cash flow per share 164c 23c 107c
Summarised consolidated balance sheet
(R millions) 30 June 2001 30 June 2000
ASSETS
Property, plant and equipment 1 227 1 307
Associate company - Unitrans
Limited market value R830 million
(2000: R764 million) 391 383
Investments 143 171
Current assets 3 898 3 796
Accounts receivable and other 2 606 2 812
Cash 1 292 984
Total tangible assets 5 659 5 657
Goodwill 16 -
TOTAL ASSETS 5 675 5 657
EQUITY AND LIABILITIES
Permanent capital 1 990 1 725
Ordinary shareholders' funds 1 982 1 717
Minority interest 8 8
Non-current liabilities 700 819
Long-term provision 316 367
Interest bearing loans 327 402
Deferred taxation 57 50
Current liabilities 2 985 3 113
Overdrafts and short-term loans 103 175
Accounts payable and other 2 882 2 938
TOTAL EQUITY AND LIABILITIES 5 675 5 657
Supplementary information
Number of ordinary shares
in issue ('000) 331 893 345 968
Net asset value per share (cents) 597 496
Net asset value per share including
associate company at market value (cents) 730 606
Consolidated capital expenditure (Rm)
- Spent during year 252 555
- Authorised for following year 475 250
Operating lease commitments 7 20
Summarised consolidated cash flow statement
Pro forma
Actual year year ended Actual
ended 30 June 2000 year ended
(R millions) 30 June 2001 (Note 1) 30 June 2000
Cash generated
by operations 480 84 457
Interest and taxation paid (25) (54) (95)
Decrease/(increase) in
working capital 103 49 8
Operating cash flow 558 79 370
Dividends received 25 25 -
Dividends paid - (173) (180)
Cash retained/(utilised)
in operations 583 (69) 190
Net investment activities (83) (261) (454)
Net cash generated
/(utilised) 500 (330) (264)
Summarised statement of changes in equity
Actual Actual
year ended year ended
(R millions) 30 June 2001 30 June 2000
Opening balance 1 717 2 410
Repurchase and cancellation of shares (43) -
Profit/(loss) attributable to shareholders 252 (571)
Foreign currency translation
movement on investments 57 42
Change in cost of shares held by
The Murray & Roberts Trust (1) 4
Realised surplus on investments - 23
Goodwill amortised as an appropriation (Note 2) - (191)
1 982 1 717
Notes:
1.On 30 June 2000, the Group's holding in Unitrans Limited reduced to 43,8%
and Unitrans Limited became an equity accounted associate company. The pro
forma columns in the above tables restate the previously published results
as if Unitrans Limited had been equity accounted in the comparative period.
2.In prior accounting periods goodwill was amortised as an appropriation of
earnings. Since 1 July 2000, the amortisation of goodwill has been charged
in the income statement in accordance with AC 131. In all other respects the
accounting policies used in the preparation of these results are consistent
with those used in the annual financial statements for the year ended 30
June 2000 and are in accordance with South African Statements of Generally
Accepted Accounting Practice.
The challenges in 2002
Extend the internal transformation challenge
Sustainable growth and shareholder value
Achieve performance targets
Entrench risk management culture
Registered office
Douglas Roberts Centre, Skeen Boulevard, Bedfordview
Transfer secretaries
Mercantile Registrars Limited, 11 Diagonal Street, Johannesburg 2001
