News
Murray & Roberts Announces Steady Half Year Earnings
24 February 2016
Johannesburg, 24 February 2016 – Murray & Roberts today announced its interim results for the six months ended 31 December 2015.
SALIENT FEATURES
- Lost time injury frequency rate of 0.78 (December 2014: 0.77). Regrettably two fatal incidents (December 2014: 2) were reported.
- Revenue from continuing operations of R15,3 billion (December 2014: R15,9 billion).
- Diluted continuing HEPS increased by 10% to 87 cents (December 2014: 79 cents).
- Attributable earnings increased by 5% to R376 million (December 2014: R359 million).
- Net cash increased by 12% to R988 million (December 2014: R884 million).
- NAV increased by 14% to R16 per share (December 2014: R14 per share).
- Strong financial performance and order book growth from the Underground Mining platform.
- Order book increased by 7% to R40,5 billion (December 2014: R37,8 billion), driven primarily by the Underground Mining platform.
FINANCIAL RESULTS
Henry Laas, Group Chief Executive comments, “Murray & Roberts is largely exposed to the global natural resources sector and is navigating its way through very difficult times and challenging trading conditions. Against the background of a subdued global economy, persistent weak demand for commodities and resulting prices and low investment in fixed capital formation in South Africa, the Group has increased its earnings and is constantly reviewing and adjusting its cost structures according to market requirements.”
The Group recorded revenue of R15,3 billion (December 2014: R15,9 billion) and attributable earnings of R376 million (December 2014: R359 million). Diluted continuing headline earnings per share (“HEPS”) increased by 10% to 87 cents (December 2014: 79 cents).
The net cash position at 31 December 2015 increased by 12% to R988 million (December 2014: R884 million). Working capital in the current market is a challenge due to slower payment by clients across all four business platforms. Efficient cash flow management and cost saving initiatives remain a specific focus for the Group.
The Group is pleased to report that its order book increased to R40,5 billion (December 2014: R37,8 billion), primarily as a result of order book growth in the Underground Mining platform. The embedded order book margin is at the lower end of the Group’s target margin range of 5% to 7%.
Capital expenditure for the period was lower at R190 million (December 2014: R209 million), of which R104 million (December 2014: R158 million) was for expansion and R86 million (December 2014: R51 million) for replacement.
HEALTH AND SAFETY
“The safety of its employees is of specific importance to the Group. Safe work outcomes are not only a moral obligation, but positions the Group as a contractor of choice,” continues Laas.
The board of directors of Murray & Roberts (“Board”) deeply regrets the death of two (December 2014: 2) employees who sustained fatal injuries whilst on duty.
The Group has started the implementation of a Major Accident Prevention programme in order to mitigate fatal risks in its operations. The Major Accident Prevention programme has achieved excellent results within Clough to date and will be rolled-out to the rest of the Group under Clough’s stewardship.
DIVIDEND DECLARATION
As communicated at the release of the Group’s full year results on 26 August 2015, the Board considered and approved a new dividend policy. In terms of this policy, the Board will consider paying an annual dividend of between three and four times earnings cover.
PROSPECTS STATEMENT
“Despite the FY2016 H1 improvement on the prior comparable period, considering the weak global economy and ongoing difficult trading conditions, the Group expects a decline in operational earnings for FY2016 when compared to FY2015. Historically, the second half of the year yielded a better result than the first half, but it is unlikely to be the case in the current financial year. The Group is continuing to implement its New Strategic Future plan. The natural resource market sectors are cyclical and implementation of this plan will position the Group well for the upturn,” concludes Laas.
