Raubex builds in Cameroon
• With lack of infrastructure projects leading road builder shifts its focus
Raubex, traditionally a leading road builder, is constructing a mall and hotel in Cameroon and building houses in SA, while it waits for the South African National Roads Agency and the state to spend more money on infrastructure.
Raubex, traditionally a leading road builder, is constructing a mall and hotel in Cameroon and building houses in SA, while it waits for the South African National Roads Agency (Sanral) and the state to spend more money on infrastructure.
The group has had to reposition its business to stay profitable, with Sanral work dropping as a portion of its order book from 23% to 12% in its 2018 financial year.
“We’ve had to shift our focus while we wait for Sanral and the government to spend more on projects. This is why we are doing more private work, including building and selling houses as well as refurbishing shopping centres. We are operating more in Africa, with new exciting work in Cameroon,” said CEO Rudolf Fourie at the release of financial results for the year to February 2018.
Raubex is constructing Douala Grand Mall and Business Park for multinational group, Actis and Ghana partner, Craft Development. The development will include 18,000m² of retail and leisure stores in Douala, Cameroon. It also has an office and hotel component.
Raubex’s overall revenue fell 5.1% to R8.54bn, but its headline earnings per share rose 13.3%, over the reporting period. Cash from operations decreased 15% to R1.04bn from R1.22bn in the 2017 period, before accounting for finance charges and taxation.
Raubex’s order book sat at R8.19bn at the end of February 2018 compared with R8.03bn at the end of February 2017. A final dividend of 33c per share was declared, meaning the group’s total dividend for the financial year was 78 cents per share.
Delays in government infrastructure projects prompted Raubex to close two of its civil engineering subsidiaries.
Orders from Sanral halved to R962m from R1.81bn, as a result of a lack of tenders being released to the market throughout the second half of the year.
L&R Civils, a company acquired in July 2012 in anticipation of a roll-out of water infrastructure projects in Gauteng, was closed down.
“We thought there would be work to fix pipes and to increase water capacity but the work never came. It is a tragedy that this company had to shut its doors,” said Fourie.
Gerrit Jordaan, an architect and commentator on urban design told Business Day that 36% of water collected in SA each year, was wasted because of bad infrastructure. L&R Civils reported revenue of R36.4m and a net loss after tax of R29.3m, which includes the closure costs of this business,
Raubex also closed Strata Civils, which contributed revenue of R37.2m and suffered a net loss of R17.5m. Construction orders from the provincial government fell 54% and those from municipalities dropped 11%.
Fourie said it was important that SA’s state-owned companies, including Sanral, and local government, started to invest in SA’s deteriorating infrastructure.
“This will not only alleviate the current pressure in the construction sector, which has experienced so many business failures, resulting in severe job losses during the year, but will also better position [SA] for future economic growth.”
Raubex also acquired 70% of the Westforce Construction group, based in Perth, Western Australia, at the beginning of January. International revenue slipped 8.5% to R1.11bn and international operating profit decreased 13.5% to R188.5m.