Wilson Bayly Holmes-Ovcon (WBHO) revealed a record order book as the company earlier this month reported its financial results for the six months ended December 31.
At about R26.5-billion, the order book eclipses the number recorded at the end of June last year by 19%.
CEO Wolfgang Neff says order book growth has been achieved across all divisions and key regions, with an additional R3.6-billion of work secured since December 31 within the Roads and Earthworks division, and R800-million in new building work, as improved market sentiment is translating into a consistent pipeline of new work.
Neff points out that WBHO’s building division is, in fact, nearing capacity.
There are also sizeable contributions within the order book from private renewable-energy projects.
About 66% of the order book is in South Africa, 15% in the rest of Africa and 19% in the UK.
The company has now fully departed Australia, notes Neff.
WBHO exited the Australian market after a costly botched roads contract, among other factors.
The group now has no further exposure Down Under. The total cost to exit Australia was R1.59-billion.
“There is no doubt in my mind that exiting Australia was the correct decision,” says Neff.
“It was necessary to protect the rest of the business, which, over the years, has time and time again proven its consistency and strength, as it stands ready to support the company’s next growth phase, which we think we are going to move into shortly.”
What is also interesting is that WBHO is delivering its current record order book with about 6 500 employees – down from 11 000 prior to the Covid-19 pandemic.
Neff notes that WBHO’s operations were not affected by loadshedding in the six months under review.
He says the group has “for years” been using backup power to run its construction sites.
However, the negative impact of intensifying power cuts on general consumer confidence is “a worry”.
Looking ahead, Neff expects growth to come from South Africa over the next two to three years, with the UK market to also pitch in some positive numbers.
WBHO reported a 15% increase in revenue, to R10-billion, from continuing operations for the six months ended December 31.
Earnings a share from continuing operations reached 829 cents, which is the highest first-half earnings since 2010, says CFO Charles Henwood.
Operating profit was R462-million, up from a restated R420-million.