M&R shares continue to rally in heavy trading

MURRAY & Roberts (M&R) shares continued their upward surge on Friday, following unusually high trading volumes in the shares of the listed construction and engineering group the previous day.

M&R’s share rose 2.67 percent to close at R15.40.

It emerged on Friday that the Coronation Group was partly responsible for the unusually high trading volumes on the company’s shares.

Disposed

M&R confirmed that it had received formal notification from Coronation Asset Management and the Coronation Group on behalf of their clients, that it had disposed of all of its shares in M&R.

Ed Jardim, an M&R spokesperson, said Coronation held almost 11.5 percent of M&R issued shares at end-December.

Jardim added that M&R had not received any formal notification from any company or entity about their acquisition of a substantial shareholding in the group.

Market data indicated that about 96 million M&R shares were traded on Thursday, which was equivalent to about 20 percent of the group’s issued ordinary share capital.

The volume weighted average price of the M&R shares traded on Thursday was R14.91, with a high price of R15.

M&R said it noted that these trades were executed at prices well above both the volume weighted average prices of the group’s shares over the 30-day to February 15 of R11.19 and the 60-day period to the same date of R11.38.

Jardim said there seemed to have been some overflow in the high trading volumes to Friday because almost 4 million M&R shares had been traded on the JSE by 3.45pm.

Since January, an estimated 500 000 M&R shares a day had been traded on the JSE, with one or two spikes above 1 million a day apart from late last week, he said.

M&R said it was not aware of anything that could have led to this unusual market activity.

However, a day earlier M&R reported that earnings from continuing operations were dented in the six months to December by a material decline in earnings from the oil and gas sector and the provision of additional costs to close out projects and the business in the Middle East.

The group said it also did not have any material foreign exchange gains in the period.

Lower

M&R expects its diluted headline earnings a share for the six-month period to be between 65 percent and 75 percent lower than the restated 93 cents in the previous corresponding period.

That equates to diluted headline earnings a share for the period of between 23c and 33c.

The group said it also incurred a net present value charge of R170m for its discontinued operations, which was associated with the voluntary rebuild programme agreement entered into by seven listed construction companies with the government.

This item is listed under discontinued operations, because M&R reported in November that it had sold its Southern African infrastructure and building business to a consortium led by the wholly blackowned Southern Palace Group for R314m.

M&R expects to release its interim financial results on Wednesday.