Strong performance by underground mining bolsters M&R
PRETORIA – A strong performance by the underground mining business of Murray & Roberts (M&R) bolstered the financial results of the listed multinational engineering and construction group in the year to June.
The underground mining platform was the largest contributor to group earnings and increased its order book to R22.1 billion at end-June from R17.5bn in the previous year.
The group's oil and gas platform maintained earnings and secured significant projects in complementary markets in Australia and Mongolia, resulting in an increase in its order book to R6.4bn from R5.2bn. Its total group order book from continuing operations grew by 12 percent to R30.1bn at end-June from R26.9bn.
M&R yesterday reported a 56 percent increase in diluted continuing headline earnings a share to 112 cents in the year to June from 72c in the previous year. Revenue from continuing operations rose by 2 percent to R21.8bn from R21.4bn. Attributable earnings increased by 456 percent to R267m from R48m. The gross annual dividend a share increased by 11 percent to 50c from 45c.
M&R is the target of a hostile takeover bid by German family-owned investment holding firm Aton, which currently owns 44 percent of the group’s shares.
Henry Laas, the group chief executive of M&R, said the group’s strategic direction and portfolio of businesses had made it an attractive investment, but stressed that M&R’s strategic aspirations and Aton’s investment objectives in relation to M&R were not aligned.
“This has resulted in the group’s aspirations, which include making strategic acquisitions and repurchasing its own shares, being impeded. The group remains open to engage with Aton to clarify its intentions with Murray & Roberts and to seek alignment on the group’s strategic direction,” he said.
Laas said the group was confident that its growth plans for the next three-year planning period were achievable. He said all platforms were targeting levels of overhead costs of about 6 percent of revenue.
However, Laas said each of the group’s three business platforms were at different stages in their strategic development and they continued to diversify their specialist service offerings to increase growth and margin opportunity and to mitigate risk across different international regions and phases of the project life-cycle.
- BUSINESS REPORT