Stefanutti climbs as building unit does about-turn
THE SHARES of listed Stefanutti Stocks rocketed by almost 16 percent yesterday after the company reported a significant turnaround in its building business.
Shares climbed 15.81 percent to R7.40, which was the stock’s highest level since December 11.
The group’s building business, which achieved an operating profit of R5 million in the year to February compared with the R151m operating loss the previous year.
Willie Meyburgh, the chief executive of Stefanutti Stocks, said it had achieved the main target of the first phase of the recovery plan embarked on by the group last year, although the building business had only achieved a 0.5 percent operating margin.
He said the target in the current financial year was to improve the operating margin, so that it was more in line with the normal building industry operating margin of 1.5 percent to 3 percent, and to also get all the group businesses operating at full potential.
Growth
Stefanutti Stocks reported a 73 percent growth in diluted headline earnings a share from continuing operations to 133.2c in the year to February from the restated 77.1c in the previous year.
Contract revenue from continuing operations increased by 15 percent to R10.6 billion from R9.2bn.
Operating profit rose by 50 percent to R335m from R223m and the operating margin from continuing operations improved to 3.2 percent from 2.4 percent.
Meyburgh said the group had brought stability to the previously distressed divisions and believed that its current business units were better positioned to provide continuing future growth, as well as an improved financial performance. No dividend was declared. The group’s current order book declined slightly to R12.4bn from R12.8bn.
Meyburgh said the short- and medium-term prospects in southern Africa, especially in the transport infrastructure and oil and gas markets, looked promising and it was pleased with the status of the group’s non-South African order book of R4.2bn.
He said the group was con- In another development, Stefanutti Stocks is still facing collusive tendering charges related to 2010 Fifa World Cup stadiums despite the Competition Commission previously indicating that it had incorrectly implicated the listed construction company.
The commission in November reported that it had referred the case against five companies to the tribunal.
The implicated companies are Wilson Bayly HolmesOvcon Construction, Group Five Construction, Murray & Roberts (M&R), Stefanutti Stocks and Basil Read.
However, the commission said in June 2013 that it had incorrectly implicated Stefanutti Stocks in Aveng’s settlement agreement in respect of the alleged contravention related to the stadium meetings and apologised for the error.
Further evidence
Meyburgh confirmed yesterday that it had drawn this to the attention of the commission, which had claimed it had further evidence implicating Stefanutti Stocks.
M&R was granted leniency in terms of the commission’s corporate leniency policy in this case because it was the first to disclose the specific contravention of the Competition Act to the commission.
The four other firms did not settle this case in terms of the construction fast-track settlement process.