Settlement deal knocks Raubex
Company was found guilty of collusive behaviour during construction projects for 2010 World Cup, reported a 14% fall in its headline earnings
Construction company Raubex reported a 14% fall in its headline earnings per share in the year to February, due to a voluntary settlement it made with SA’s competition authorities for anticompetitive behaviour.
The Competition Tribunal found industry members guilty of collusive behaviour, mostly during construction projects for the 2010 World Cup.
Raubex allocated R119.9m for the settlement to prevent potential damages claims. Seven big construction companies are part of the R1.5bn settlement.
Mish-al Emeran, an equity analyst at Electus Fund Managers, said investors would have a clearer sense of the prospects of the companies once the settlement payments had worked through the system.
The settlement deal followed a fast-track process launched by the competition authorities in February 2011. The intention is to advance the transformation of the construction sector.
Raubex’s headline earnings per share (HEPS) fell to 201.7c, from 234.4c a year ago. Excluding this settlement cost, HEPS would have been up 14.8% to 269.1c, said CEO Rudolf Fourie.
He said Raubex’s results were strong and that it was well-positioned. "We made a very good decision to separate our businesses into primarily a roads construction and a materials-handling business about five years ago. We also have an infrastructure and a solar business that are gaining traction. Many other construction companies that did not diversify some years ago have run into trouble," said Fourie.
Group revenue rose 13.6% to R9.01bn from R7.93bn earned in the previous financial year. Operating profit fell 6.9% to R661.7m from R710.6m for the comparable period.
Raubex was considering joint ventures deals in Australia and the Middle East, meaning it would invest out of Africa for the first time in its more than 40-year history.