Basil Read CEO quits after earnings plunge
THE CONTINUING tough operating environment in the construction sector yesterday claimed another casualty, with Basil Read chief executive and executive director Neville Nicolau resigning from his positions with immediate effect.
The listed construction group said yesterday that Nicolau had decided to leave the group for personal reasons.
However, the resignation announcement coincided with Basil Read reporting that it expected a more than 100 percent decrease in earnings a share and headline earnings a share for the six months to June.
Basil Read reported earnings a share of 29.75 cents and headline earnings a share of 48.92c for the six months to June 2016.
The group attributed the loss in earnings to continued weak market conditions for the industry, operational under performance in its roads division together with continued difficulties in the resolution of claims on an unidentified legacy project.
It added that the board had decided to review the business with a view to undertaking significant restructuring of the group to preserve shareholder value and that it had engaged the services of a corporate finance advisory firm to assist the group in this process.
The group said it would provide further guidance once more certainty was obtained.
Most of the major listed construction companies reported poor financial results in recent times because of a tough trading environment typified by intense competition and a scarcity of major contracts.
This turmoil in the construction sector has contributed towards the decision by listed construction and engineering group Murray & Roberts last year to sell its South African infrastructure and building platform to the wholly black-owned Southern Palace Group for R314 million and listed Group Five announcing in February that chief executive Eric Vemer would be leaving the company within the next few weeks.
Basil Read has been in discussions since July last year about the potential private placement of shares that it said would result in the group becoming a black owned company. Its shares dropped 5.42 percent on the JSE yesterday to close at R1.57.