CAPE TOWN - Wilson Bayly Holmes-Ovcon (WBHO) lifted headline earnings a share by 183percent to 411cents after a solid performance in its Africa and UK operations in the six months to December 31, but tempered by further losses in Australia.
Group revenue was up 14percent to R23billion. Reflecting a turnaround compared with the same time last year, earnings per share increased by 208percent to 412c per share. An interim dividend of 80c per share was declared, compared with zero dividend for the same period, a year before.
The share price closed 4.03percent lower at R99.49 on the JSE yesterday.
Cash balances of R5.1bn were greater than those of R4.3bn at December 31, 2018, due to strong cash generation in the African and UK operations.
Cash balances had, however, decreased by R823million since June 30, due to the usual early settlement of subcontractors in Australia, ahead of the holiday season.
The group said the local construction industry had recently seen more work from state-owned organisations such as Airports Company South Africa (Acsa), South African National Roads Agency (Sanral), Eskom and Transnet.
Although the group was completing the Western Road Upgrade project in Australia, a A$20m (R203.55m) provision was set aside for further anticipated losses from the project.
The building and civil engineering business reported a slide in operating profit to R152m from R163m. The roads and earthworks operations’ operating profit declined to R136m from R167m.
Australian activities reduced losses to R174m, compared with a R445m loss the previous period. The UK business increased profitability to R149m.
The total order book stood at R42.4bn, a 10 percent decline from R47.3bn on June 30.
The roads and earthworks division order book declined 11percent, mostly in South Africa.
A more selective bidding strategy in Australia was reflected in the lower order book levels, as the business aimed to procure projects at acceptable margins and levels of risk.
In rand terms, the UK order book had decreased by 19 percent.
The building market in Gauteng remained distressed with fewer available large-scale projects.
The recently awarded Thlabane Mall, alongside ongoing construction on projects forming part of the rejuvenation of Johannesburg CBD, completion of the Deloitte head office and Pretoria Head and Neck Hospital, and progress on a large logistics warehouse for DSV were some of the major projects supporting activity in the region over the second half of the financial year.
South African subsidiary Edwin Construction faced difficult conditions. Roadwork projects from provincial government remained limited, however with Sanral and Acsa resuming spending, the business had focused its attention on certain of these projects.