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MURRAY & ROBERTS HOLDINGS LIMITED
(Registration number 1948/029826/06
("Murray & Roberts" or "the Group:)
Interim report for the six months to 31 December 2000
SALIENT FEATURE
* Headline earnings per share - 26 cents
* ATTRIBUTABLE Earnings up R78 million
* Turnaround actions are delivering value
* improved quality of operating performance
The unaudited consolidated results for the six months ended 31 December 2000
are set out below:
SUMMARISED CONSOLIDATED INCOME STATEMENT
R millions Unaudited
Unaudited Pro forma Unaudited
Actual 6 months to Actual
6 months to 31.12.99 6 months to
31.12.00 (Note 1) 31.12.99
Revenue 4 477 4 390 6 684
Earnings before finance costs,
exceptional items, depreciation
and amortisation (EBITDA) 188 116 306
Depreciation (110) (110) (186)
Amortisation of goodwill (Note 2) (2) - -
Earnings before finance costs
and exceptional items (EBIT) 76 6 120
Exceptional items 1 (13) (13)
Earnings/(loss) before finance
costs and taxation 77 (7) 107
Net finance costs (17) (34) (48)
Earnings/(loss) before taxation 60 (41) 59
Taxation (6) 18 (13)
Earnings/(loss) after taxation 54 (23) 46
Income from associates 38 37 -
Outside shareholders' interest (1) (1) (33)
Earnings attributable to ordinary
shareholders 91 13 13
Reconciliation of headline earnings
Attributable earnings 91 13 13
Adjust: Exceptional items as above (1) 13 13
Headline earnings 90 26 26
Average number of ordinary
shares in issue ('000) 345 968 345 968 345 968
Earnings per share - total 26c 4c 4c
- headline 26c 8c 8c
Operating cash flow per share 2c (18c) 21c
SUMMARISED CONSOLIDATED CASH FLOW STATEMENT
R millions Unaudited
Unaudited Pro forma Unaudited
Actual 6 months to Actual
6 months to 31.12.99 6 months to
31.12.00 (Note 1) 31.12.99
Cash generated by operations 145 64 249
Interest and taxation paid (25) (33) (65)
Increase in working capital (113) (92) (112)
Operating cash flow 7 (61) 72
Dividends received 15 18 -
Dividends paid - (173) (173)
Cash retained/(utilised) in
operations 22 (216) (101)
Net investment activities (67) (260) (325)
Net cash utilised (45) (476) (426)
Segmental analysis
R millions 6 months to 6 months to 6 months to 6 months to
31.12.00 31.12.00 31.12.99 31.12.99
Revenue EBIT Revenue EBIT
Building and civil
engineering 1 631 30 1 593 28
Industry and mining 601 23 547 22
Engineered products 882 4 906 (24)
Supplies and services 1 356 48 1 340 3
Corporate activity 7 (29) 4 (23)
Murray & Roberts
Limited 4 477 76 4 390 6
Unitrans - - 2 294 114
4 477 76 6 684 120
SUMMARISED CONSOLIDATED BALANCE SHEET
R millions Unaudited Audited
Actual Actual
31.12.00 30.06.00
Assets
Property, plant and equipment 1 295 1 307
Associate company - Unitrans Limited 404 383
Investments 164 171
Current assets 3 529 3 796
Accounts receivable and other 2 639 2 812
Cash 890 984
Total tangible assets 5 392 5 657
Goodwill 18 -
Total assets 5 410 5 657
Equity and liabilities
Permanent capital 1 867 1 725
Ordinary shareholders' funds 1 858 1 717
Outside shareholders' interest 9 8
Non-current liabilities 860 879
Long-term provision 373 367
Long-term loans 370 402
Deferred taxation 117 110
Current liabilities 2 683 3 053
Overdrafts and short-term loans 159 175
Accounts payable and other 2 524 878
Total equity and liabilities 5 410 5 657
Supplementary information
Net asset value per share (cents) 537 496
Net asset value per share including associate
company at market value (cents) 620 606
Capital expenditure 112 363
Summarised statement of changes in equity
R millions Unaudited Unaudited Audited
Actual Actual Actual
31.12.00 31.12.99 30.06.00
Opening balance 1 717 2 410 2 410
Earnings/(loss) attributable
to shareholders 91 13 (571)
Foreign currency translation movement
on investments 50 (9) 42
Realised surplus on investments - - 23
Goodwill amortised as an appropriation - (78) (191)
Change in cost of shares held
by The Murray & Roberts Trust - - 4
1 858 2 336 1 717
Notes:
1. On 30 June 2000, the Group's holding in Unitrans Limited reduced to 43,8%
and Unitrans Limited became an equity accounted associate company from that
date. The pro forma columns in the above tables restate the previously
published results as if Unitrans Limited had been equity accounted in the
comparative period.
2. The accounting policies and methods of computation for the financial
statements for the six months to 31 December 2000 are in all material respects
consistent with those applied in the annual financial statements for the year
ended 30 June 2000. An exception is the treatment of the amortisation of
goodwill. In prior accounting periods goodwill was amortised as an
appropriation of earnings. Since 1 July 2000, the amortisation of goodwill has
been charged in the income statement in accordance with AC 131.
3. Consolidated capital expenditure authorised but unspent at 31 December 2000
amounted to R138 million.
COMMENTS
Rebuilding Murray & Roberts
In pursuit of the Board's commitment to this "change strategy for sustainable
value", the period under review has seen good progress made with corporate
office consolidation, aligning remuneration with business strategy and business
restructuring.
The elimination of divisional structures and new executive appointments have
combined to form a unitary Murray &Roberts where the knowledge and experience
of the whole Group can be brought to bear on the creation of sustainable value
and growth.
PERFORMANCE
The improved performance in the period reflects the initial results of this
corporate activity. Operating cash flow has turned positive and all clusters
are now in operating profit. The balance sheet remains strong, showing an
improvement in net asset value over the period.
Activity levels in building and civil engineering have been static, with poor
market conditions in Botswana, KwaZulu-Natal and Eastern Cape. The industrial &
mining cluster has benefited in the period from a first time contribution from
Booker Tate. During the period, the business of JCI Projects was acquired which
will complement the existing activities of EMS and RUC Mining.
The AWI company in Canada was placed in voluntary liquidation on 19 January
2001. This followed a decision by the Group not to support further cash losses
in the business. The cost of this decision is fully covered by the impairment
provision established at 30 June 2000. Ongoing businesses in engineered
products have delivered only marginal profits in the period.
The supplies and services companies have improved their cost-to-market
performance in response to the continuation of depressed conditions in the
domestic economy. A number of non-core companies in this segment have either
been sold in the period or rationalised for sale or closure.
EXCEPTIONAL ITEMS
On review of the calculation of the property headlease provision, the Board has
considered it prudent to increase the existing provision by R37 million.
A cost of R22 million has been incurred in the period due to business
restructuring and includes the write-down of certain under-performing
investments.
During the period, the Group realised R60 million relating to an investment,
the value of which had previously not been recognised.
SHARE REPURCHASE
At a special general meeting held on 29 January 2001, shareholders approved the
specific repurchase of 14 074 921 shares for the sum of R43 210 007, an
effective cost of 307 cents per share. The repurchased shares were delisted
from the JSE Securities Exchange and cancelled on 2 February 2001. The number
of shares in issue accordingly reduced to 331 892 619.
Further cautionary
Shareholders are referred to cautionary announcements dated 21 December 2000
and 31 January 2001 and are advised that the Group is still involved in the
negotiations referred to therein regarding the disposal of a business of one of
its subsidiaries.
BOARD OF DIRECTORS
Late last year, Carlo Di Nicola gave notice that he would take early retirement
on 31 March 2001. He has resigned from the Board with effect from 28 February
2001.
Lionel Bird, who turns 60 in May 2001, has indicated that he will retire from
the Board at its meeting in June 2001. He becomes a non-executive director of
the Board with effect from 28 February 2001.
The Board expresses its appreciation to both these executives for their long
and dedicated service to the Group.
The Board is pleased to announce the appointment, effective 28 February 2001,
of Mr Saki Macozoma as a non executive director and Messrs Keith Smith and John
Stanbury as executive directors.
PROSPECTS
Government has committed to support strategic industrial investment and job
creation, to find a solution for the delivery of infrastructure and services,
to continue with the Motor Industries Development Plan as well as other
investment initiatives, and to accelerate the privatisation of State assets and
services. Murray & Roberts welcomes these programmes. The Group is well
positioned to partner Government in all these sectors and will actively seek
additional opportunities for the creation of value and growth.
The international markets served by the Group remain competitive, but niche
sectors suited to the focused skills and capabilities of Group companies, offer
growth and opportunity.
The Board of Unitrans Limited has published its prospects under separate notice
The Board is confident of a further improvement in earnings for the next
six-month period.
DIVIDEND
The Board has determined that no interim dividend will be paid.
On behalf of the Board
Bedfordview D C Brink Chairman
28 February 2001 B C Bruce Group Chief Executive
R W Rees Group Financial Director
DIRECTORS: B N Bam, L B Bird, D C Brink (Chairman), B C Bruce* (Managing and
Chief Executive Officer), A J de Nysschen*, W P Esterhuyse, S E Funde, K J Grov
*, P G Joubert, SJ Macozoma, A J Morgan, R W Rees*, A A Routledge, R C
Sheppard*, K E Smith*, JS Stanbury*, JJM van Zyl.
*Executive
GROUP SECRETARY: L J Lindsay
INTERNET ADDRESS: www.murrob.com
E-mail ADDRESS: investor@murrob.com
rebuilding Murray & Roberts
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