ELB gets lift on Sasol Mining deal

INDUSTRIAL and mining solutions provider ELB Group yesterday saw its share price climb its highest in a month.

This was after it announced a large deal with Sasol Mining to build a colliery material handling system worth about R870m.

The company’s share jumped as much as 6% to an intraday high of R22, before settling back to close 3,61% higher at R21,50.

ELB has been punted by analysts, including Simon Brown, as a share which should see strong returns over the next few years. The company is trying to involve itself in the government’s large infrastructure spend. Mr Brown yesterday said he was impressed with ELB’s strong cash position.

He said the Sasol deal would add 30% to ELB’s revenue over the three years and that he was pleased with the company which was a “niche focused player”, hence his decision to hold it.

ELB has reported a growing operating profit thanks to rising cash flows over the past two years. This put the company in the position to embark on the colliery deal with Sasol Mining.

“This is not our biggest project but it is a large one which we are excited about. We will be involved with various engineering aspects of the colliery’s handling system,” ELB Engineering CE Stephen Meijers said.

ELB is more than a century old. It began as a family-controlled business, known for decades as Edward L Bateman.

Its project management arm was sold to an international consortium in 2002.

The company’s market capitalisation is about R728m, suggesting that the R870m deal with Sasol Mining is significant.

The company posted an 8,3% rise in turnover for the six months to December, reflecting improved activity across its full range of products and services.