M&R eyes better times
FINANCIAL YEAR: REPORTS GROWTH IN ORDER BOOK TO A RECORD R60.7BN
Revenue from operations grew by 5.3% to R21.9bn from R20.8bn.
JSE-listed multinational engineering and construction company Murray & Roberts (M&R) expects its revenue for the year to June 2022 to “comfortably exceed R30 billion”.
“That will be a 50% improvement on the revenue for the year to June 2021,” said M&R CEO Henry Laas on Thursday.
Laas based this forecast on the 12% growth in the group’s order book to an all-time high of R60.7 billion at end-June 2021 from R54.2 billion in the prior year.
“We are extremely excited about the R60.7 billion order book and more so because of the quality of this order book,” he said.
“It provides us with the opportunity to experience strong revenue growth but also earnings growth in the 2022 financial year.”
Laas said the order book growth will predominantly come from M&R’s two multinational businesses, the energy, resources, and infrastructure (ERI) and mining platforms.
He said the power, industrial and water platform is focused on sub-Saharan Africa and does not have the same opportunities.
“It operates in the local market, predominantly in South Africa, and we haven’t seen investment in the power, industrial and
water sector to the extent that is really necessary for this platform to make a contribution to our results,” he said.
Laas said M&R has an order book of R26.8 billion that is already secured for the financial year to June 2022.
“We should achieve another R6 billion on top of that so we have an expectation that our revenue in the new financial year should exceed R30 billion.
“It is quite exciting to have that level of revenue, and without the burden of the discontinued operations, it really sets us up nicely for the future,” he said.
Project pipeline
Turning to M&R’s project pipeline, Laas said the group has R11.1 billion in near orders, which comprises work that has been secured by the group but has not yet been signed, meaning M&R is not able to take it into the order book yet.
However, Laas said there is a 95% chance of near orders translating into the order book.
He added that M&R has submitted R84 billion in bids for Category 1 tenders (tenders that have already been submitted and are currently under adjudication) and highlighted that R30 billion of the R84 billion Category 1 tenders submitted by M&R are being
negotiated on a sole source basis.
These tenders relate to three projects, one in Zimbabwe and two in Australia, but all three projects are subject to final investment decisions, he said.
“We are confident that some of them will find their way into the order book, if not by December, certainly very early in the second half of the current financial year,” he said.
Results
M&R this week reported strong growth in earnings before interest and tax from continuing operations to R540 million in the year to June 2021 from the loss of R17 million in the prior year.
Revenue from continuing operations grew by 5.3% to R21.9 billion from R20.8 billion.