Raubex wants to add more plants
Order book up 32.5 percent
JSE-listed road construction and rehabilitation firm Raubex is to continue looking for acquisitions in the materials sector both in South Africa and in the African continent.
Rudolf Fourie, the chief executive of Raubex, said yesterday that the company did not have the geographical footprint it would like in South Africa and was quite aggressively looking for quarry and asphalt plants in Cape Town.
“We are looking at quite a few (potential) acquisitions at the moment, all on the materials side, but nothing that we are close to bringing to the table,” he said.
Fourie said the group had acquired a 74 percent stake in the BelaBela quarry in Botswana last month which would give the group a platform for expansion into the Botswana market, and it was considering establishing a concrete batching and plant in Botswana.
He said Raubex had a very small exposure to the Botswana market through Tosas, its manufacturer and distributor of value added bituminous products for road construction, and to date had not done any construction work in that country.
“With this acquisition (BelaBela), we will hopefully get access to this market. It’s a logical expansion for Raubex because Botswana is a stable country with a stable currency and we would like to work there.
“The opportunities in Botswana are limited but it’s attractive because it’s a restricted market,” he said.
Fourie stressed the expansion into the continent was driven by high margins and it wanted double digit margins on projects in the continent because of the risk.
“We are not getting that margin in South Africa, where the construction margin is
asphalt closer to 5 percent,” he said.
The group order book grew by 32.5 percent in the year to February to R8.68 billion from R6.55bn in the previous year, with 25.4 percent of the order book now representing contracts in the African continent.
Fourie said the South African and continental order books complemented one another and the current percentage split between the two was ideal for the group.
Raubex yesterday reported an 11.8 percent growth in headline earnings a share to 209.1c in the year to February from 187.1c in the previous year.
Revenue rose by 14.5 percent to R7.25bn from R6.33bn.
Operating profit increased by 15.2 percent to R622.2 million from R539.9m and the group operating margin improved marginally to 8.6 percent from 8.5 percent.
growth in earnings per share to 209.1c reported.
A final dividend of 36c a share was declared, boosting the dividend for the full year to 71c a share, 9 percent higher than the previous year.
Fourie said Raubex had delivered strong financial results in a tough environment supported by a great performance by the materials division, which now constituted more than 50 percent of group’s earnings.
“The recent acquisitions have been successfully integrated and are contributing positively. The group’s order book is at an all-time high and the international projects secured in Zambia allow us to be more selective in the work that we tender for in South Africa,” he said.
Fourie said Raubex was awarded two big Greenfield road projects worth a total of R1.2bn in the north eastern part of Zambia involving the construction of 200km of “through the bush”.
“We prefer Greenfields projects because that strength,” he said.
Shares in Raubex closed up 0.52 percent to R21.30 at the JSE yesterday.
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