Henry Laas. Picture:  SUNDAY TIMES
Henry Laas. Picture: SUNDAY TIMES

Murray & Roberts CEO Henry Laas said he was confident that the company had pulled through the worst in underground mining and that it was coming through in oil and gas after reporting an 8% rise in diluted headline earnings per share for the year ended-June.

That result excluded a R570m loss from its Middle East business, which it is hoping to shut completely by the end of March 2018 as part of a wide-ranging restructuring. This has seen it sell its Infrastructure and Building businesses to focus on underground mining, oil and gas and power and water.

Laas was adamant Murray & Roberts was on the cusp of a "new growth period". The group declared a dividend of 45c a share as cash, net of debt, held at R1.8bn. The firm’s cash strength was one of the reasons the group had decided to increase its interest in Gautrain operator, the Bombela Concession Company (BCC), to 50%, he said. "The best strategy to earn a return on that cash is to increase our stake in the BCC. It’s a company we know well and it’s giving a great return at this stage."

Murray & Roberts is also pursuing an acquisition in the gas sector in the US.

Finding new sources of work is tough, though. Revenue for the year fell 15% to R20.8bn and its order book for continuing operations had fallen 6% to R26.9bn.

But, said Laas, new work was "at a better risk profile … tendered at margins that should return about 5%". Part of the order book decline is due to the wind-down of work at Eskom’s Medupi and Kusile power stations, where the company is the main boiler subcontractor.

The firm said the division was committed to securing work to replace the projects, but competition was fierce.

As did competitor Aveng a few years ago, Murray & Roberts is also branching out into the water sector — including municipal and industrial wastewater treatment — and plans to tender for work under Cape Town’s desalination plans.

talevij@businesslive.co.za

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