Basil moves into the black

Picture: Liza van Deventer.

Picture: Liza van Deventer.

Published Aug 4, 2015

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Johannesburg - Basil Read - the construction company that was involved in a Competition Commission probe over collusion - says it will reverse its interim loss-making position.

The company told shareholders on Tuesday it expects to report a profit of 145.75c on a headline earnings per share basis in the six months to June.

This translates to a gain of 100% from the previous corresponding period. Its shares gained 50c in mid-morning trade to R5.

A year ago, the company posted an operating loss of R295.5 million compared with a gain of R80.2 million in the six months to June 2013.

This came as contractual difficulties resulted in a high proportion of work remaining uncertified. Basil Read’s construction division was negatively affected by loss-making contracts in the roads and civil engineering divisions.

Basil Read, which is about a year into an 18 month turnaround strategy, has been evaluating various businesses and assets in the group to categorise these into core and non-core categories.

At year-end, the company detailed further woes, announcing it had crashed to loss of R820.9 million for the year to December compared with a profit of R281.5m in the previous year.

Key factors that hit the firm’s profits was impairment of goodwill, write down of development land and the costs associated with the 2013 Competition Commission fine of R95 million.

“A challenging construction sector, difficult contractual environment and poor operational performance have contributed to Basil Read reporting poor results for the 2014 financial year. Loss-making contracts across all construction disciplines, coupled with a struggling engineering division, have overshadowed stable performances by the mining and developments divisions,” Basil Read said in a statement at year-end.

JSE rules require companies to alert the bourse as soon as they are aware that results will differ by 20% or more from the previous corresponding period.

Basil Read’s results will be published on 28 August.

IOL

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