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| GROUP CHIEF EXECUTIVE REPORT TO SHAREHOLDERS |
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| Murray & Roberts is a great company with the capacity of great and committed leadership and people to engage the demands of our strategic future. We reduced the Group to its basic structure over the past seven years and have built a formidable and new performance platform to engage the future potential of all our markets. |
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| Brian Bruce, group chief executive |
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We have consolidated our position as South Africa's
construction industry leader and entered the JSE Top
40 Index in May 2007, later becoming the largest
company by market capitalisation in our sector. Our
operations extended their presence in all key sectors of
the South African construction economy and we
enhanced our focused activity in selected resource
driven international markets.
We have secured a number of major projects in many
of our operating environments, which bodes well for the
future performance of our Group. There is every
indication that demand for the products and services
that particularly suit the capability of the Group will
remain buoyant for the foreseeable future.
Our Stop.Think safety intervention contributed to a
reduction in our lost time injury frequency rate to our
short term target of 3,0. However, our fatality incidence
has not shown an equivalent improvement which has prompted a more rigorous regime of internal and
independent review to secure our objective of zero
disabling incident in all work sites under our control.
We have continued our program of strategic
intervention into key aspects of our business processes
and systems to build the capacity demanded of the
market growth we believe lies ahead of us for the
foreseeable future.
Our commitment to sustainable earnings growth
and value creation is not negotiable.
Some executives and many people still in the construction industry today, started their
careers during the previous construction growth period in the 1960s and 1970s. I am one
of these and to remember what it was like through that period I have reviewed past annual
reports of the Group from 1967 to 1977.
I have been surprised by how little has changed. Murray & Roberts was formed 40 years
ago in 1967 through the merger of The Roberts Construction Company from Johannesburg
and Cape Town based Murray & Stewart. This significantly enhanced the critical mass of the
Group relative to the market at the time. Then 30 years ago in 1977, the 25 year fixed
investment cycle was almost over and a 25 year period of decline had commenced,
although this was not fully recognised for at least another five years.
Throughout that ten year period, the Murray & Roberts annual reports highlight concerns
with industry leadership and skills capacity relative to future growth prospects; public sector
capacity for its major investment programs; materials cost inflation; and labour relations.
Yet Murray & Roberts in particular and the industry in general consistently rose to the
challenge and delivered significant world class economic infrastructure through this period of
resource and skills deficit. Some international contractors also entered the market, but not
many delivered value to either their shareholders or clients.
Throughout that ten year period, the Murray & Roberts annual reports highlight concerns
with industry leadership and skills capacity relative to future growth prospects; public sector
capacity for its major investment programs; materials cost inflation; and labour relations.
Yet Murray & Roberts in particular and the industry in general consistently rose to the
challenge and delivered significant world class economic infrastructure through this period of
resource and skills deficit. Some international contractors also entered the market, but not
many delivered value to either their shareholders or clients.
It is worthy of noting that following a listings boom through the 1960s, the market peaked in 1968 with
more than 40 construction related companies on the JSE. It is also of interest that university intake in
South African Engineering and Built Environment faculties in 2007 is reported to be of the same quality
and size as the previous peak intake of 1968.
A significant feature of the development of Murray & Roberts over the past few years has been the level
of business disposal and acquisition activity. This has created a focused performance platform for our
engagement of a global economy that relative to our experience of the past two decades, will deliver
significantly enhanced fixed capital formation.
We have disposed of a number of non-strategic businesses for cash of about R2,0 billion at an average
of about 1,33 times NAV and have invested this R2,0 billion in strategic acquisitions at an average of
about 1,67 times NAV. This has resulted in a significantly enhanced performance profile for the Group. |
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View gross fixed capital formation chart  |
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Leadership reports