• Operating cash up 131% to R668 million
• Order book up 70% to R8,5 billion
• Operating profit up 29% to R543 million

Murray & Roberts has announced annual financial results for the year to 30 June 2005 ahead of market expectations and with strong growth across all dimensions of its business.

Operating profits for the year increased by 29% to R543 million off a 27% increase in revenues to R10,7 billion. Diluted headline earnings of 140 cents per share were achieved following the disposal of the investment in Unitrans and a significant increase in taxation.

The Group’s operating margin was maintained above 5%, well ahead of the performance of its peers in the engineering and construction industry.

Operating cash flow increased by 131% during the year to R668 million and at year-end the Group held net cash of R1,7 billion on its balance sheet.

Murray & Roberts has maintained its final dividend of 30 cents per share, making the total dividend 45 cents per share for the year.

Commenting on the results, group chief executive Brian Bruce said he was generally pleased with the performance of all sectors of the Group. He had introduced a five-year turnaround strategy Rebuilding Murray & Roberts on his appointment to the position in July 2000.

One of the many challenges Bruce set was that the Group’s non-core investment in transport and motors company Unitrans Limited be converted into proceeds for the acquisition of core strategic investments serving the global construction economy.

“The acquisition of Cementation and a strategic partnership with Clough has established a new global engineering and contracting platform serving key natural resource markets in Southern Africa, Middle East, Southeast Asia and North America,” he said.

Murray & Roberts announced today that subject to approval by regulatory authorities and Clough shareholders, it has reached agreement with Clough and McRae Investments representing the Clough Family, to acquire a further 120 million shares in Clough in a transaction that is currently valued at approximately R300 million. This will take its shareholding in Clough to about 49% over the next two years.

Bruce states “This strengthening of the alliance between Murray & Roberts and Clough will further enhance our joint competitiveness in the natural resources sector and allow both companies to achieve the necessary global scale that is required for our businesses. We have been very encouraged by the progress made by Clough in several areas of its business and this further investment shows that Murray & Roberts is fully supportive of the Clough business model and its platform for sustainable success.”

“We have also enhanced our leading position in the domestic market through our acquisition of new business capacity and our preferred bidder status on the Gautrain Rapid Rail Link project and the Pebble Bed Modular Reaction (PBMR) nuclear power programme.” Bruce said.

The Group’s project order book grew by 70% to R8,5 billion at 30 June 2005, excluding the Gautrain and PBMR projects announced subsequent to year-end. The most significant award in the year was Dubai International Airport, where the Group’s 40% share is worth R2,4 billion over three years.

All sectors of the Group’s operation with the exception of Middle East delivered growth in both revenues and profits. Difficult contracts in Qatar and Egypt and delayed finalisation of completed contract accounts contributed to a loss in the year.

Murray & Roberts has acquired an initial 80% shareholding in Oconbrick (Pty) Limited with effect from 1 July 2005 for a consideration of R96 million. It is planned that this company together with Harvey Roofing will form the core of a Group strategy to serve the developing affordable housing market in South Africa.

The Group announced the sale of Criterion Equipment to J&J Group from 1 September 2005 in an empowerment transaction valued at R75 million.

Black Economic Empowerment

The Group has also announced that it will approach shareholders in general meeting to approve a scheme of arrangement to buy-back 10% of its shares using its own resources to facilitate broad-based black economic empowerment ownership of its equity.

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Prospects

All markets targeted by Murray & Roberts are showing signs of sustainable growth potential. According to Bruce, this indicates that the next few years will be positive for the Group.