| 27-08-2001 |
| Murray & Roberts results for the year to 30 June 2001 |
Murray & Roberts has confirmed its turnaround by delivering excellent results for the year to 30 June 2001, with headline earnings up 111% to 76 cents per share. No dividend will be paid for the year under review. However, achievement of the Group's growth and performance objectives will enable the resumption of dividend payments in 2002. Commenting on the results, Chief Executive Brian Bruce said: "Murray & Roberts is undergoing fundamental strategic transformation. The 2001 results and the growth in shareholder value represent the first performance benefits of the Rebuilding Murray & Roberts strategy - a change strategy for sustainable value." "During the year under review, divisional structures were eliminated, the corporate office was consolidated, the executive leadership team was significantly strengthened and a policy of aligning remuneration with business strategy was implemented." Attributable earnings increased from a loss of R571 million in the previous year to a profit of R252 million. All business clusters reported solid earnings before finance costs and tax (EBIT) contributions and the Group's operating cash flow increased from R79 million last year to R558 million. The results of these improvements are reflected in a stronger balance sheet and a 20% increase in net asset value per share. The challenging conditions affecting building and civil engineering activities in southern Africa coincided with a period of consolidation in the Group's international markets and this cluster recorded a lower EBIT contribution than in the previous year. The industry and mining cluster benefited from the inclusion of Booker Tate for the full year and JCI Projects, the acquisitions of which were finalised during the year. A major turnaround was achieved in all of the engineered products activities. Following the liquidation of the AWI company in Canada, a process is underway to dispose of the Port Elizabeth and UK wheel manufacturing facilities. The supplies and services cluster produced a pleasing turnaround result with a significant EBIT improvement on lower revenue. This improvement was achieved by virtually all of the individual business units in this cluster. "Our challenge moves into its next phase on a solid foundation. The Group has moved from a turnaround situation to a strategic performance model that enables sustainable growth and value creation," Bruce said. "The operational structure is in place to achieve this. In particular, the unitary structure will facilitate greater synergy among operating entities. In support of growth targets, our Board anticipates a substantial increase in capital expenditure for the year ahead," he said. Disposals Main Pipesystems was sold with effect from 1 March 2001. A number of non-core companies were sold or closed during the year. Since the year end, the sale of the Fielders division of Harvey Roofing Products has been finalised and Woodline Timber Industries has been sold, subject to Competition Commission approval. Exceptional Items The property headlease provision was increased by R37 million in the first six months and by a further R11 million in the second half. Some progress was made in resolving this major issue and certain headleases were settled, facilitated by the use of the related provisions raised at 30 June 2000. A net cost of R25 million was incurred in the year under review due to business restructuring, including a further write down of certain under-performing investments. This was partially offset by a recovery of R10 million on the provision made at 30 June 2000 against the outstanding debtor on the sale of Astas. As announced in the interim report on 28 February 2001, the Group realised R60 million relating to an investment, the value of which had not previously been recognised. Income from Associate Unitrans reported a 19% increase in total earnings per share. Murray & Roberts' reduced shareholding in Unitrans resulted in a lower contribution from this associate. Share Repurchase In January 2001, shareholders approved the repurchase of Prospects No improvement is forecast in the domestic building and civil engineering markets. The markets for our mining, industrial and manufacturing activities remain positive. A number of interventions are underway to review systems and cost structures and the necessary actions to further improve shareholder value will be implemented. Overall, the Board expects that the Group will achieve further meaningful growth in earnings per share in the forthcoming year.
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