Johannesburg - Basil Read has secured R200 million in debt funding from the Industrial Development Corporation.
The debt funding was secured this month after the end of the group’s interim period to end June. Chief executive Neville Nicolau said yesterday that the debt funding would improve the group’s liquidity position and relieve the liquidity pressures it experienced in the six months to June.
Nicolau said liquidity was tight, particularly in construction, and cash balances reduced to R219.3m in June from R474.7m in December.
“Cash outflows were largely due to working capital changes as advance payments received on the St Helena airport project are unwinding as the contract nears completion. Funding historical losses in the construction division depleted cash resources,” he said.
Nicolau said the overall liquidity of the company would improve further with the positive resolution of legacy claims in the second half of the group’s financial year.
Basil Read highlighted two contingent liabilities in its interim results yesterday. It said the contingent liability related to a possible tax liability in Botswana was unchanged because the Botswana Unified Revenue Services had not yet issued revised assessments.
Basil Read reported a 32 percent rise in diluted headline earnings a share to 48.92c in the six months to June from 37.13c in the previous corresponding period. Revenue fell 12 percent to R2.5bn from R2.85bn. Operating profit dropped 22 percent to R73.45m from R93.68m.
Net cash generated by operations slumped by 70 percent to R101.6m from R337.1m.
Basil Read shares declined 3.33 percent on the JSE yesterday to close at R2.90.