Raubex expects earnings per share to increase by between 70% and 90%
CAPE TOWN – Raubex appears to be on the mend following last year’s plunge in earnings.
The diversified infrastructure and construction materials supply group said in a trading statement yesterday that it expected earnings per share to rise between 70 and 90 percent in the six months to August 31.
Headline earnings per share (Heps) were expected to be 60 to 80 percent higher, between 60.7 and 67.8 cents per share, compared with the corresponding period last year.
The earnings growth is a turnaround. In the year to February 28, Heps fell 75.1 percent to 57c, and the final dividend was cut to 22c from 33c a share.
During that year, a dearth of infrastructure investment by the government led to a lack of work on road projects, and there was community unrest on some of its sites.
In the first half, the roads and earthworks division continued to experience weak trading.
But right-sizing initiatives in the prior year had curtailed losses, and the division was better positioned to manage the lower volume of work while maintaining sufficient capacity for an expected improvement in the sector.
The materials division experienced a challenging six months, with margin pressure and a decrease in operating profit.
The division was impacted by community unrest, which affected a number of quarry operations; the completion of certain material handling contracts in mining; and the establishment costs and lower initial production volumes achieved on new material handling contracts in the mining sector.
The infrastructure division experienced strong growth in the first half due to its participation in the Renewable Energy Independent Power Producer Procurement Programme where a number of contracts were in progress.
Stable conditions persisted in the affordable housing and commercial building sector.
Opportunities in the construction market that went out to tender included upgrades to the N2 and N3 in KwaZulu-Natal, and upgrades to OR Tambo International Airport and Cape Town International Airport.
Raubex’s share price gained 7.8 percent on the JSE yesterday to close at R20.86.
The share price has been relatively steady over the past year.