WBHO goes into the black following lower losses in Australian highway project
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Wilson Bayly Holmes-Ovcon (WBHO) returned to profitability in its construction and engineering operations in the year to June 30 following reduced losses in Australia, and a rejuvenated performance from the African business.
The results, released Friday, show that the reduced losses in Australia came after the group had provided for substantial losses in the previous reporting period, to reach the physical completion of the Western Roads Upgrade (WRU) project.
So additional losses in the current period primarily represented the cost of attaining commercial acceptance of the project.
Management said the results were also lifted by a rejuvenated performance from the African operations which had recovered from the impact of Covid-19 in the latter half of the financial year, increasing in both revenue and profitability.
In the UK, both the Byrne Group and Russell’s-WBHO delivered solid results, although activity tapered in the second half.
Group revenue fell 11 percent to R38 billion. Earnings a share rose 163 percent to 594 cents, compared with a loss of 937 cents a share in 2020.
Headline earnings a share increased 167 percent to 620 cents, compared with a loss per share of 923 cents previously.
A final dividend of 205 cents was declared - in 2020 the dividend was passed.
Operating profit of R457 million (2020: loss R585m) arose after accounting for a further A$28m (R322m) loss on the Western Roads Upgrade, and a A$14m (R165m) loss on the 443 Queens Street projects in Australia.
Attributable earnings came to R316m versus a loss of R498m in 2020.
Significant non-recoverable and recurring costs and expenses arose from the Covid-19 pandemic in the previous period, but construction continued mostly uninterrupted through the lockdown periods across all regions.
WBHO Construction acquired a 1.66 percent shareholding in Probuild Construction in Australia through the year from a non-controlling shareholder for AU$1.4m, while WBHO Infrastructure reacquired 1.69 percent from its non-controlling shareholders for AU$676 000.
This increased the group’s interest in Probuild to 89.6 percent from 87.9 percent, and in WBHO Infrastructure to 96.9 percent from 94.8 percent.
The order book in Africa increased 46 percent to R856bn. The increase in the order book in South Africa was up 62 percent to R8.36 percent, while the book for the Rest of Africa operations fell 76 percent to R198m.
Some R5.7bn of the order book was secured in the second half. Building order books had been replenished. A strong base load of work had been secured across all South African regions.
A number of large-scale projects were also supporting order book levels. The civils book had been impacted by suspended projects in Mozambique. In South Africa the industrial and warehousing sector remained a strong source of new work with contribution at 24 percent, but there had also been an Improved contribution from the residential market.
The share price on Friday closed 2.04 percent higher at R120.41 on the JSE.
BUSINESS REPORT ONLINE