PRETORIA - Listed construction and engineering group WBHO reports that its entry into the UK market provided the group with an exciting new opportunity.
It said yesterday that the combined order book for UK businesses it had interests in added R11billion to the group’s total order book and now comprised 21percent of its total order book of R53.8bn.
WBHO was prompted by stagnant growth and margin pressure within its African business over a number of years to seek growth opportunities in new markets, to grow shareholder returns and further diversify its earnings platform.
The total order book of the group shows the shift in its businesses from South Africa and the rest of Africa to the UK and Australia.
WBHO entered the UK market in June last year, with the acquisition of a 40percent stake in the Byrne Group for £12million (R229m) and doubled its interest in the company at the end of June this year at no further cost when the original shareholders elected not to recapitalise the business.
It specialises in concrete sub- and superstructure packages, while new-build refurbishment and fit-out projects were delivered through Ellmer Construction.
WBHO expanded its presence in the UK market further post June with the acquisition of 60percent of Manchester-based main contractor Russells Limited for £32.8m and 32percent of residential developer Russell Homes for £3.25m.
WBHO said yesterday that the inclusion of the order book of Russells added R4.6bn for the UK of the R6.44bn at end-June.
This accounted for 13percent of the group’s total order book of R49.16bn at end-June, a 10percent growth on the R45bn in June last year.
The order book of WBHO’s roads and earthworks division decreased by 32percent and its building and civil engineering divisions by 17percent, while its Australian order book rose 3percent.
WBHO’s Australian business accounted for 66percent of the group’s total order book at end-June at R32.56bn. South Africa accounted for 18percent at R8.7bn compared to 26percent in the previous year, and its rest of Africa business 3percent at R1.45bn.
Louwtjie Nel, the chief executive of WBHO, said the general building market in Africa, including South Africa, remained sluggish, with few opportunities and smaller sized projects.
However, Nel said the order intake of the local building division had remained stable through the year and the division was also benefiting from reduced competition on available large-scale projects, resulting in a greater share of a smaller market.
The division had secured projects after year-end to the value of R1.9bn, which would further support activity this year, Nel said.