The group confirmed this in a trading and business update released on Friday in which it advised shareholders it expected to report an improvement of at least 20percent in earnings a share and headline earnings a share for the six months to December, compared to the previous corresponding period.
Henry Laas, the group chief executive of M&R, told Business Report last week they believed they would close an acquisition in the US, but stressed it was not a material and probably a $20million (R241.45m) to $30m transaction. He said it was not of sufficient scale to have a material impact on M&R’s earnings stream in the short term, but would be a good deal for the group and strategically it was the right thing to do.
“It gets us into the US market, it gives us the capability that we need in that market, but it's not going to hit the bottom line immediately,” he said.
Laas said M&R’s oil and gas business had the benefit of the investment in the liquefied natural gas for the past decade in Australia, but there was not much happening in that market now, because the big projects had been built and commissioned. He said the US was the market where they saw the best potential for project opportunities for its oil and gas business.
But Laas said they needed to buy a business in the US that they could leverage and grow to establish themselves in that market.
“We have got small engineering companies there, which bring us good market intelligence, but you need to be in the point where you are implementing and constructing the project, which is where the big revenue is,” he said.
The group’s trading update said the oil and gas platform was expected to maintain its financial performance in line with the previous reporting period.
It expected improved trading conditions in the medium term when investment by global energy producers was expected to return, supported by increasing demand from China and Japan.
“While project opportunity in the primary oil and gas markets is limited, projects are being pursued in the complementary and growing infrastructure sector in Australia,” it said.
M&R said the underground mining platform was expected to report an increase in earnings in the six months to December as it continued to deliver strong results across all three main geographic regions, Australasia, Africa and the Americas.
“Based on market research guidance, the group expects a sustained improvement in commodity prices and subsequent increase in capital spending by mining companies."
M&R shares closed 2.54percent lower on the JSE on Friday at R11.50.