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‘It’s not all doom and gloom in our space’ – WBHO boss

22nd March 2024

By: Irma Venter

Creamer Media Senior Deputy Editor

     

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With a total pipeline of work of R240-billion, up from R211-billion in June, Wilson Bayly Holmes-Ovcon’s (WBHO’s) short- to medium-term future “should be okay”, says CEO Wolfgang Neff.

“It’s not all doom and gloom in our space. I think it looks pretty good. Our earnings are at their best levels in over a decade. I think we are in a really, really good space at the moment.”

Speaking during an online briefing on the company’s financial results for the six months ended December 31, Neff noted that the term ‘project pipeline’ referred to available projects the construction group would most likely bid on, and which were likely to start on site in the next 24 months.

It also served as a barometer on the work available in the construction space.

Within WBHO’s Roads and Earthworks division, the project pipeline was R91-billion, with 80% of the work in the public space.

“There is a substantial increase in the potential work out there,” said Neff.

There was especially upside in the road construction and water infrastructure spaces, with a decline, however, in mining infrastructure work as mining companies faced declining commodity prices.

Within the company’s Building and Civil Engineering division, the project pipeline was at R107-billion, with increased opportunities in warehousing, data centres, hotels and healthcare, and energy.

Again, mining infrastructure was the one sector facing a decline in activity, said Neff.

The other negative on the board was the UK, where the pipeline had also shrunk.

In terms of work already secured, Neff said WBHO had managed to sustain its order book of secured work at the record levels notched up in June last year.

The order book at the close of December last year reached R32.3-billion, said a “really pleased” Neff.

Further to these numbers, there was a good chance of a further R13-billion of work to be awarded in the Roads and Earthworks division by June, and R6-billion in the Building and Civil Engineering division, on tenders already submitted.

The UK market, however, looked set to “remain subdued until the second half of 2025”, noted Neff.

“I think that jurisdiction will start recovering once we see a recovery in interest rates.”

WBHO in March reported a 29% jump in revenue for the six months under review, to R13.3-billion, with operating profit within continuing operations up 32%, to R636-million.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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