Johannesburg - Protech Khuthele has made peace with its broad-based black economic empowerment (BEE) partners after some of them supported the hostile but unsuccessful bid from listed leasing and capital equipment group Eqstra for the remaining shareholding in the listed construction group that Eqstra did not already own.
Antony Page, Protech Khuthele’s chief executive, said yesterday there were certain issues in the Protech Khuthele BEE Trust that last year resulted in Protech’s BEE grading dropping from level 4 to level 6 when the trust was no longer recognised as a BEE vehicle. The Protech Khuthele BEE Trust owns 20.36 percent of the group.
However, Page said Protech had improved its BEE status back to level 4 earlier this year by leveraging the other pillars of broad-based BEE other than ownership, particularly enterprise and skills development, and was now working closely with the trust and trustees to sort out their differences.
“We hope to leverage this to the advantage of all our shareholders. We have covered most of the issues and have a good relationship with existing beneficiaries of the trust and hopefully we will be able to make some announcement about this later in the year,” he said.
Page said the group’s results for the six months to August reflected the substantial progress that had been achieved through the strategic turnaround strategy, which had culminated in the company’s improved profitability from a loss-making position in its 2012 financial year.
He stressed this progress had been made under severe trading conditions, which had been further compounded by a delay in public sector infrastructure roll-out and slow infrastructure project investments in the mining sector.
Protech yesterday reported a 24 percent decline in interim headline earnings a share to 2.8c from 3.7c in the previous corresponding period. Revenue increased by 6 percent to R561.5 million. Earnings for the period declined by 25 percent to R11.2m.
Cash generated by operations slumped to R31.2m from R111.8m, which was attributed to the repayment of advance payments, direct working capital funding of a joint venture in the Democratic Republic of Congo and transaction costs incurred. The shares rose 1.72 percent to 59c yesterday.
Page said Protech continued to make considerable progress in the implementation of its strategic turnaround strategy and had embarked on phase two of the plan, which was designed to embed and build on the foundation established during phase one.
“We are taking quite a strong market-focused approach and are looking at the market ourselves, our clients, various consultants and major players in the construction industry, to enable us to get quality work and grow.
“The change strategy in three of the business units should start delivering measurable and tangible results that should further improve the group’s profitability.” - Business Report