Weak conditions dent M&R earnings

Weak trading conditions and low energy prices have put a dent in Murray & Roberts’ earnings, with the group warning that its diluted headline and diluted earnings per share would have fallen significantly in the year to June.

The group’s earnings have also been under pressure from delays in four building projects in the Middle East, scheduled to be completed in the 2018 financial year. The firm took a strategic decision to exit the civil engineering and building market and to sell its infrastructure and building businesses.

As this sale excluded the building business in the Middle East, the board of directors decided to close this business.

In terms of International Financial Reporting Standards rules, the business in the Middle East is to be abandoned and is not yet a discontinued operation. Therefore, the financial results would be reported as continuing operations for the year to June.

“As the business in the Middle East recorded a substantial loss of about R570m for the year under review, group revenue, earnings before interest and tax, and headline earnings per share and earnings per share for 2017 will be reported as ‘including and excluding’ the Middle East,” Murray & Roberts said.

“This is to enable a clear understanding of the negative impact of the Middle East business on the continuing operations’ earnings profile,” Murray & Roberts said.

Including the Middle Eastern business, the group’s diluted headline earnings per share would have fallen 57%-63% to 66c-76c. Diluted basic earnings per share would have fallen 63%-68% to 69c-79c.

Excluding the Middle Eastern business, diluted headline earnings per share would have grown between 5% and 10% to between 206c and 216c. Diluted earnings per share would have fallen between 6% and 11%, or between 219c and 209c.