Wilson Bayly Holmes-Ovcon increased its order book 19% to R27 billion by the end of the six months to December 31, positioning the construction group well with work for the second half and beyond, the group said yesterday.
Headline earnings per share from total operations of 630 cents for the six months represented a turnaround from the headline loss per share of 1 613c in the 2021 financial year. However, no interim dividend was declared.
The group said yesterday it was looking forward to a “healthy growth phase” based on work on hand and near-term opportunities, and the outlook for the African operations, while the outlook for the UK operations was positive.
“The continuing operations of the group enjoyed a stable six-month period in which the South African operations demonstrated positive growth as a consequence of strong order book levels at 30 June 2022. Operations in the rest of Africa performed satisfactorily, and the businesses in the UK performed in line with expectations amid a difficult trading environment.
“Especially promising has been the growth in the order books of all divisions,” the group said.
Obligations for the exit from Australia on February 22, 2022 had been fulfilled, with no further exposure. The group had operated in Australia for about 20 years.
Revenue from continuing operations increased 15% to R10bn. Earnings a share from total operations of 641c compared with a loss per share of 2 535c in 2021. Group net asset value amounted to R3.3bn from R4.2bn in 2022.
Revenue from the South African building and civil engineering, roads and earthworks, construction materials and property development increased 21.9% to R7.02bn in the six months.
In the Rest of Africa operations, revenue increased 6.9% to R1.08bn, while in the UK revenue increased 0.6% to R2.23bn.
“Global and local inflationary pressures are beginning to stabilise with a corresponding end to the interest rate hiking cycle expected in the second half of 2023. Improved market sentiment in general is translating into consistent new work procurement and a noticeable increase in construction opportunities in several of the group’s key geographies,” the group said.
From an order book perspective, growth of 12% and 76% in the South African and rest of Africa order books, respectively, had positioned the African operations well for the remainder of the 2023 financial year, as well as the 2024 financial year.
The forward-looking pipeline within local building markets was positive in all regions.
In Gauteng, the division had a strong base load of work with opportunities for new phases and additional work on a number of projects.
Other near-term opportunities included new data centres, on which the division’s design and construct team had been awarded contracts to do designs, alongside commercial and residential developments in the sub-R250m market.
The divisional order book in the Western Cape was “robust”. Management expected the completion of several projects over the second half to be sufficiently replaced by potential new project awards across the residential, education and data centre sectors.
In KZN, the division had sufficient work on hand to sustain increased activity over the next 12 months. The industrial building and warehousing sector would likely remain the primary driver of activity, supported by the recent award of a project at the new Brickworks industrial park development.
Although activity in the Eastern Cape had normalised, the pipeline of imminent larger-scale projects had improved. These include a large logistics development in Gqeberha, a retail development in Makhanda (Grahamstown), residential schemes at George and Plettenberg Bay, as well as additional phases on existing projects.
In the rest of Africa, a project in Lesotho would continue into 2025 and additional opportunities were being pursued in Ghana, Kenya, Rwanda and eSwatini.
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