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| Executive Summary |
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The directors are pleased to announce half-year results at the top end of recent market
guidance and a 71% increase in the interim ordinary dividend to 77 cents per share for the six
months to 31 December 2007 (2006: 45 cents per share).
Attention is drawn to the formal dividend announcement contained herein.
Fully diluted headline earnings per share increased 60% to 216 cents for the period (2006:
135 cents). The consolidation of Clough from 1 July 2007 plus improved market conditions
and increased performance from all core business segments resulted in a 79% increase in
operating profit (EBIT) to R1,0 billion (2006: R0,56 billion).
Revenue for the period is up 55% to R12,77 billion (2006: R8,21 billion) which includes organic
growth of R2,44 billion (up 30%) and a maiden contribution of R2,12 billion from Clough.
The interim operating margin of 7,9% (2006: 6,9%) continues the performance trend set in the
previous financial year and includes a margin of 6,8% in Clough.
Construction & Engineering revenue including Clough increased 79% to R9,5 billion
2006: R5,3 billion) with EBIT up 133% to R667 million (2006: R286 million), including a fair
value adjustment on concession investments comparable to the prior half-year.
Revenue in Construction Materials & Services increased 12% to R2,5 billion (2006: R2,3 billion)
with EBIT up 24% to R369 million (2006: R298 million). This follows disposal of the Foundries
Group and reallocation of Hall Longmore and Genrec to Fabrication & Manufacture where
revenue is R676 million (2006: R556 million) with EBIT at R44 million (2006: R21 million).
Corporate costs for the half-year are R75 million (2006: R43 million adjusted) including a
charge of R20 million relating to share-based payments accounted for in terms of IFRS 2 and
income on property assets held at Corporate (see note 4).
The effective tax rate reduced to 23% (2006: 28%) with increased profitability in the Group's
zero tax rated markets and an increase in capital profits on disposal of subsidiaries. The tax
charge increased 79% to R249 million (2006: R139 million).
Operating cash inflow improved significantly to R1,56 billion (2006: R485 million) with working
capital inflow at R436 million (2006: R100 million outflow). Subsequent to year end the Group
received its 40% share of a AED300 million payment for on schedule delivery of phase 1 of
the Dubai International Airport project.
Cash in hand increased 152% to R4,4 billion including receipt of advance payments totalling
about R1,9 billion for the capital funding of significant startup expenses on long-term major
projects. Some of this cash is restricted in various joint ventures.
Shareholder funds increased to R3,9 billion at 31 December 2007, representing a net asset
value (NAV) of 1185 cps. The after tax return on average shareholder funds for the period
moved well above the Group hurdle of 20% to 37% (2006: 22,3%). |
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