Murray & Roberts CEO Henry Laas
Photo by: Duane Daws
Construction group Murray & Roberts (M&R) reported a fall in earnings, revenues and orders during the year to June 30, 2015, and warned that earnings would remain under pressure during 2016, owing to a subdued global economy, weak demand for commodities and low fixed capital investment levels in South Africa.
Group revenue fell to R30.6-billion from R36-billion in 2014, while attributable earnings declined to R881-million from R1.26-billion, with profits of R422-million on discontinued operations in 2014 not repeated in 2015.
M&R’s order book declined to R38.3-billion at the end of June, from R40.9-billion a year earlier; a fall that was attributed mainly to a decrease in orders from its oil and gas platform order book. Besides oil and gas, the JSE-listed company has three other business platforms, including underground mining, power and water, and infrastructure and building.
The fall in the order backlog was partly offset by an increase in the orders for the underground mining platform, which was awarded a R4.8-billion Kalagadi Manganese contract and the R3-billion Booysendal project during the year.
In commentary released with the results, CEO Henry Laas said the group expected “a more challenging 2016 financial year”, but said its balance sheet strength would enable M&R to continue with bolt-on acquisitions to grow its capability to provide services in all segments of the project value chain.
The board had also approved a new dividend policy, with payments subject to a yearly review and distributions potentially influenced by global market conditions, merger and acquisition activity and relative balance-sheet strength.
“In terms of this policy the board will consider paying an annual dividend of between three and four times earnings cover,” the company said, while declaring a gross annual dividend of 50c/share for 2015.