Raubex nearly doubles dividend, maintains strong order book
INFRASTRUCTURE development and construction supplier Raubex has nearly doubled its final dividend to 54 cents a share for the full year period to end February, boosted by high government spend in its South African market while the Australian unit also top performed.
Raubex is expecting to finalise the Beitbridge Border development project in Zimbabwe.
This bodes well for its rest of Africa division – where it has operations in Botswana, Mozambique, Zambia and Namibia – which grew revenues by 172 percent to R1.5 billion.
The Australian division contributed about 18 percent to Raubex’s operating profit, with the company saying it “continues to gain market share” in the West Australian region.
The final dividend payout for the year to February has resultantly jumped from 29c a share last year to 54c.
This was after Raubex lifted revenue for the period under review by 40 percent to R11.58bn, driving the operating profit by as much as 159.4 percent to R945.3 million.
This yielded a 263 percent massive growth in headline earnings per share at 297.4c.
The group’s order book, underpinned by the government spending and infrastructure development projects, remains strong at R17.13bn, slightly up on the prior year’s order book position of R17.12bn.
Rudolf Fourie, the chief executive of Raubex Group, said: “The higher level of government spend on infrastructure in South Africa contributed to our growth and is set to sustain our order book going forward.
“We are also expecting the financial close on the renewable energy programme to further add to the positive trend.”
He explained that “continued focus on the highest quality execution resulted in the successful completion of the Beitbridge Border Post project”, where it is “on track to reach completion” in line with expectations.
Raubex has just appointed executives Felicia Msiza and Dirk Lourens as new chief executive and chief operating officer, respectively.
The acquisition of Bauba during the year drove its borrowings by 20.7 percent to nearly R1bn, while inventories are just above R1bn.
The roads and earthworks division is benefiting from major Sanral projects in KwaZuluNatal, where performance has been noted as satisfactory.
The division was also well supported by various concession projects such as N3TC, Bakwena and TRAC throughout South Africa.
The demand for asphalt, a major component in road construction, however, “slowed down in the second half” of the trading year.
Raubex is encouraged, though, by the “increased demand in the volumes-driven bitumen supply” operations.
Its infrastructure development division is anticipating finalisation and financial closure to
the bidding process for the Renewable Energy IPP Risk Mitigation.
“In anticipation of these renewable awards, this division had to incur holding costs to retain capacity and skills for when these projects are awarded. These projects are expected to reach financial close later in 2022,” highlighted the company.
Raubex is deepening its presence in the local housing market as it participates in the Lufhereng Integrated Housing Development in Soweto.
Additionally, the company is sizing up opportunities in student housing.
“A number of student accommodation and other affordable housing projects “are being matured” and are expected to “provide a pipeline of work to be executed” over the medium to long-term outlook.
Raubex’s share price closed 0.49 percent lower at R40.50 on the JSE yesterday.