WBHO set for a 150% loss
Wilson Bayly Holmes Ovcon (WBHO) has received an unsolicited, non-binding and conditional bid from a major international construction and civil services company to acquire the JSE-listed construction group’s 88% interest in Probuild, its Australian building business.
The offer, if successful, could possibly lead to WBHO exiting the Australian market.
WBHO indicated earlier this year that its future strategy for Australia is being reviewed.
This announcement coincided with WBHO’s trading update on Wednesday, wherein it advises shareholders that it expects to report a loss in the year to endJune, with earnings per share and headline earnings per share both seen at least 150% lower than the prior year.
Earnings per share is expected to be 1 409 cents lower than the 939 cents in the year to June 2019 and headline earnings a share 1 398 cents lower than the 932 cents reported.
The operating profit of WBHO’s building and civil engineering business is expected to be at least 50% lower than the previous year, its roads and earthworks business at least 40% down, its Australian business at least 200% worse and its construction material business to incur an operating loss. The operating profit of its UK business is expected to be at least 5% higher.
With governments around the world having announced widespread measures to contain the spread of the Covid-19 pandemic, and due to the group’s geographic diversity, these measures have affected operations within each country to varying degrees and severity at different times, WBHO said.
The group expects to announce its latest annual financial results on 1 September. WBHO company secretary Shereen Vally-Kara confirmed on Wednesday the unsolicited offer is for Probuild only and does not include the group’s Australian infrastructure business.
WBHO entered the Australian market in 2001 after acquiring an initial 40% interest in Probuild Constructions, which it subsequently increased to 88%, with WBHO Infrastructure formed following the consolidation of WBHO Civil and Probuild Civil.
WBHO said on Wednesday the operating loss in Australia will be at least 200% worse than the comparative period, because of Covid-19 and further material provisions for the costs to complete these two projects.