PRETORIA – Raubex, the listed road construction and rehabilitation-focused company, plans to reposition itself into a fully-fledged construction group to take advantage of the gap created by the financial difficulties being experienced by former construction sector heavyweights.
Rudolf Fourie, the chief executive of Raubex, said yesterday that the idea was for infrastructure to become a third of the company’s business and he believed they would achieve that within a year or two.
Road construction and rehabilitation currently accounts for between 25 and 30 percent of Raubex’s business; construction materials, with much of these materials going into roads, about 50 percent; and the remainder infrastructure.
Fourie confirmed yesterday that Raubex had not been awarded a single contract by the SA National Roads Agency (Sanral) in the six months to August. “The idea is also to lessen our exposure to one major client, like Sanral, because we are uncertain of what the future holds for us in that space,” he said.
Raubex Renovo, a new business focused on renovating commercial buildings, has become increasingly important to the group and its order book accounted for almost 32 percent of Raubex’s infrastructure division at year-end in February.
Fourie said earlier this year that there were extensive opportunities in this area, particularly as a lot of companies in South Africa in this space “fell by the wayside”. Clients were looking for listed companies to bid on projects and had remarked that only WBHO was left.
Raubex said on Wednesday it expected its earnings a share and headline earnings a share for the six months to August to be between 70 and 80 percent lower than in the prior period. This translates to earnings a share of between 26.8 cents and 40.2c in the six months to August, compared to 134c in the prior period and headline earnings a share of between 26.2c and 39.3c compared to 131.1c previously.
Raubex attributed this significant decline in earnings to continued weak conditions in the South African construction industry, particularly in the road construction sector.