Picture: Sunday Times
Picture: Sunday Times

Construction group WBHO generated more revenue in Australia in the six months to December, where international investors are launching new projects, unlike in SA, CEO Louwtjie Nel said on Tuesday.

WBHO grew revenue 17.3% to R18.1bn during the period, boosted by revenue from its Australian division which increased 28.7% to R11bn.

“The contribution to group revenue from Australia has increased from 56% to 61%, with SA and the rest of Africa contributing 31% and 8% respectively, compared with 38% and 6% in the comparative period,” Nel said in the results statement.

WBHO and its competitors, Aveng and Murray & Roberts were drawing most of their revenue from work in Australia. Nel said he was hoping private and international money would soon enter the local market.

This would help SA’s construction sector in the short to medium term, while, in the long term, the sector needed increased spending by the government. When the country’s state-owned enterprises (SOEs) begin to function better, WBHO and other construction groups would benefit tremendously, Nel said.

WBHO managed to maintain its dividend payment of 150c in the six months to December.

Its operating profit climbed 8.1% to R510m from R471m.

WBHO has also expanded into the UK, but this has not yielded any profits so far. It owns 40% of Byrne Group, which earned R1.1bn revenue for the period under review, but made an operating loss of R68m.

WBHO’s headline earnings per share from continuing operations increased 82.6% to 727c from 398c in the 2016 period.

The company declared a dividend of 150c for the reporting period compared with 150c a year before.

“We have had a fairly flat year in terms of operating profit, but I think our fortunes and those of the sector in general are beginning to pick up.

“We are probably at the bottom of the curve, of what has been a prolonged difficult period for construction in SA. But we are beginning to climb out of it and should be able to maintain a similar dividend for 12 to 18 months,” Nel said.

He said he was optimistic that President Cyril Ramaphosa’s new Cabinet would get infrastructure and SOE project spending back on track, but that this would only happen gradually given how many obligations the government had to deal with as it implemented its new leadership.

WBHO’s share price closed 1% higher on Tuesday at R172.75, with 141,389 shares traded.