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The Group’s Southern Africa regional construction activities including new acquisition Concor
recorded revenues up 138% at R5,0 billion (2006: R2,1 billion) and delivered operating profits
of R328 million
(2006: R35 million) at a margin of 6,6% (2006: 1,7%). This includes a positive
R76 million contribution arising from a fair value adjustment on concession investments
(2006: R68 million), but excludes recoveries of R26 million from various problem projects
reported in the previous financial year.
There has been a welcome but still incomplete turnaround in Murray & Roberts Construction
under new leadership and Concor delivered a maiden contribution well ahead of
expectation.
Middle East construction recorded increased revenues of R2,4 billion (2006: R1,6 billion) and
delivered an operating profit of R123 million (2006: R77 million) at a margin
of 5,1% (2006:
4,8%). The Dubai International Airport project is a significant contributor to this performance,
with handover of the facility proceeding to schedule. This complex and demanding project
has placed a great deal of strain on our people, partners and cash flow, characterised through
information delays, long and arduous working hours and conditions, resource constraints and
late payment authorisations. Its success is testimony to the quality of our project leadership
and corporate support, both so necessary for major project engagement.
Engineering contracting and services operations experienced mixed conditions in the year
with revenues of R794 million (2006: R611 million) delivering operating profits
of R46 million
(2006: R48 million) at a margin of 5,8% (2006: 7,9%). This includes a maiden contribution
from Wade Walker in the second half-year. An excellent performance from engineering
services was offset by major project and third party capacity related delay costs in the power
generation and industrial contracting sector.
Mining contracting operations in South Africa, Australia and Canada recorded revenues of
R3,6 billion (2006: R2,7 billion) and an operating profit of R233 million (2006: R164 million)
at a margin of
6,5% (2006: 6,1%). The South African operation experienced the start of
disruptive industrial action in the year, while international mining markets continued to deliver
strong growth.
The Group’s construction materials and services companies have delivered exemplary
performance again this year off improved levels of gross fixed investment in Southern Africa
and Middle East.
Reinforcing steel construction products and trading services increased revenues
33% to
R2,2 billion (2006: R1,7 billion) at an operating profit of R168 million
(2006: R127 million).
Concrete and Asphalt infrastructure products increased revenues 27% to R1,24 billion
(2006:
R980 million) at an operating profit of R302 million (2006: R218 million).
Clay, steel and concrete building products delivered revenues of R856 million
(2006: R325
million) at an operating profit of R160 million (2006: R63 million). This includes a maiden
contribution from Concor Technicrete.
Specialist services to the construction and infrastructure sector delivered an operating profit
of
R133 million (2006: R71 million) on revenues of R411 million (2006: R235 million). This
includes an increasing exposure to the strong Middle East market.
Following disposal of the Group’s foundry businesses in the year, the operations of Genrec,
Hall Longmore and UCW have been incorporated into a steel fabrication segment, which
recorded increased revenues 43% up to R1,3 billion (2006: R927 million) at an operating
profit of R83 million
(2006: R63 million).
Corporate overheads increased marginally to R144 million (2006: R140 million) in the year,
excluding a charge of R21 million (2006: R7 million) relating to share-based payments
accounted for in terms of IFRS 2. Corporate capacity plays an increasing and important role
engaging risk mitigation in the Group’s major project and diverse geographic operations. |
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