Well set for an infrastructure boom

he construction industry in SA has not been an easy place to be since the boom years of the 2010 Soccer World Cup, and the subsequent lack of government focus on infrastructure during SA’s “lost decade”.

A long-term investor in construction stocks from 2011 to date would be considerably poorer, with Murray & Roberts down 75% and Aveng losing most of its value (down some 99%).

WBHO is less scathed but still down 40% over that period, from about R139 to R84 per share. The only saving grace for WBHO shareholders is the approximately R34 a share received in dividends through the period.

The undertakings to boost economic stimulus by President Cyril Ramaphosa’s government and the related prioritisation of public infrastructure spend were finally seen as a sorely needed shot in the arm

Tfor the long-suffering construction industry. These hopes have, of course, been deferred in the short term due to the Covid-19 pandemic.

WBHO was started in 1970 and is now one of Southern Africa’s largest construction companies. The group listed on the JSE in 1994, and entered Australia in 2000 by acquiring 40% of the Australian construction company Probuild Construction. The group also has operations in the UK.

The business is divided into three main operating divisions: building construction; civil engineering; and road and earthworks.

The 2020 financial year was, according to management, the most challenging year in the group’s 50-year history. This was despite steps taken, such as the containment of nonessential expenditure, suspension of bonus payments and the withdrawal of the interim dividend to minimise