M&R’s shares leap 20% after expressing optimism about 2021
The group says while the last six months of 2020 should be difficult due to Covid-19, it has a strong order book
The share price of engineering group and mining contractor Murray & Roberts was on track for its best day in over two years on Monday, according to Infront data, after it said its healthy order book meant it was optimistic about the first six months of 2021.
The group said in a trading update that headline earnings per share (HEPS) for its year to end-June were to fall more than a fifth, but that its order book at the end of March stood at R51.5bn, from R50.8bn at the end of December.
In afternoon trade on Monday, Murray & Roberts’s share price had jumped 21.07% to R4.54, putting it on track for its best one-day performance in over three years.
The group’s share price has fallen by two-thirds over the past 12 months, compared to a 7.92% fall in the JSE all share over the same time period. Murray & Roberts said on Monday it had potential contracts worth R721.1bn, from R667.7bn at the end of December.
“The group has several tenders under adjudication and believes clients will go ahead with the award of many, if not most of these projects,” it said.
Some awards may be delayed, as clients are considering the effects of Covid-19 on their investment decisions, Murray & Roberts said, adding its “order book is expected to provide a good platform for future performance”.
Murray & Roberts said it had in excess of R1.7bn of cash available at the end of March, and R1.1bn in unutilised credit facilities.
The group said it did not expect to ask lenders for covenant relief, referring to agreements that prevent a company from breaching certain financial metrics that reflect its ability to repay debt.
“There has also been no need to raise further facilities since the outbreak of the Covid-19 pandemic,” Murray & Roberts said.
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