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Murray & Roberts - Preliminary report for the year ended 30 June 2002
Murray & Roberts Holdings Limited
(Registration number 1948/029826/06)
("Murray & Roberts" or "the Group")
Share code: MUR
ISIN: ZAE00008983
Preliminary report for the year ended 30 June 2002
Highlights
* Earnings doubled
* Strong operating cash flow
* Substantially improved operating margin
* 22% return on shareholders` funds
* Dividend resumed at 35 cents per share
The audited results for the year ended 30 June 2002 are set out below:
Summarised consolidated income statement
Year ended Year ended
(R millions) 30 June 2002 30 June 2001
Revenue 9 027 8 535
Earnings before interest, exceptional 619 454
items, depreciation and amortisation
(EBITDA)
Depreciation (227) (232)
Amortisation of goodwill (6) (4)
Earnings before interest and 386 218
exceptional items (EBIT)
Exceptional items (2) (2)
Earnings before interest and taxation 384 216
Interest 71 (6)
Net interest paid (10) (21)
Currency gain on offshore treasury 81 15
funds
Earnings before taxation 455 210
Taxation (36) (28)
Earnings after taxation 419 182
Income from associate 90 71
Minority shareholders` interest (4) (1)
Earnings attributable to ordinary 505 252
shareholders
Reconciliation of headline earnings
Attributable earnings 505 252
Adjustments:
Exceptional items as above 2 2
Amortisation of goodwill 6 4
Headline earnings 513 258
Average number of ordinary shares in 331 893 340 103
issue (`000)
Earnings per share (cents)
- basic 152 74
- headline 155 76
- basic excluding currency gain on 130 72
offshore treasury funds, amortisation
of goodwill and exceptional items
Dividend per share (cents) 35 -
Operating cash flow per share (cents)* 239 164
* includes currency gain on offshore treasury funds
Summarised consolidated balance sheet
Year ended Year ended
(R millions) 30 June 2002 30 June 2001
ASSETS
Non-current assets 2 007 1 761
Property, plant and equipment 1 339 1 227
Associate company - Unitrans Limited 503 391
Other investments 165 143
Current assets 4 351 3 819
Accounts receivable and other 2 372 2 397
Cash 1 979 1 422
Total tangible assets 6 358 5 580
Goodwill 15 16
TOTAL ASSETS 6 373 5 596
EQUITY AND LIABILITIES
Permanent capital 2 657 1 990
Ordinary shareholders` funds 2 648 1 982
Minority shareholders` interest 9 8
Non-current liabilities 609 700
Long term provision 293 316
Long term loans 263 327
Deferred taxation 53 57
Current liabilities 3 107 2 906
Overdrafts and short term loans 239 233
Accounts payable and other 2 868 2 673
TOTAL EQUITY AND LIABILITIES 6 373 5 596
Net asset value per share (cents) 798 597
SUPPLEMENTARY INFORMATION (Rm)
Capital commitments
Capital expenditure
- spent 456 248
- authorised but unspent 384 517
Operating lease commitments 107 104
Contingent liabilities 11 39
Summarised statement of changes in equity
Year ended Year ended
(R millions) 30 June 2002 30 June 2001
Opening balance 1 982 1 717
Earnings attributable to shareholders 505 252
Foreign currency translation movement 169 57
on investments
Repurchase and cancellation of shares - (43)
Change in cost of shares held by The (8) (1)
Murray & Roberts Trust
2 648 1 982
Summarised consolidated cash flow statement
Year ended Year ended
(R millions) 30 June 2002 30 June 2001
Cash generated by operations before 592 480
working capital changes
Decrease in working capital 135 103
Cash generated by operations 727 583
Interest and taxation 66 (25)
Operating cash flow* 793 558
Dividends paid to minority shareholders (3) -
Cash retained in operations 790 558
Net investment activities (247) (59)
Net funds flow 543 499
* includes currency gain on offshore treasury funds
Segmental analysis
Year ended Year ended
(R millions) 30 June 2002 30 June 2001
REVENUE
Building and civil engineering 3 076 2 990
Industry and mining 1 736 1 328
Engineered products 1 299 1 068
Supplies and services 2 417 2 085
Corporate 60 44
Ongoing operations 8 588 7 515
Discontinued operations 439 1 020
Revenue as reported 9 027 8 535
EBIT
Building and civil engineering 117 85
Industry and mining 101 77
Engineered products 78 42
Supplies and services 169 101
Corporate (91) (109)
Ongoing operations 374 196
Discontinued operations 12 22
EBIT as reported 386 218
Note:
1. The accounting policies and methods of computation for the financial
statements for the year ended 30 June 2002 are in all material respects
consistent with those applied in prior years and are in accordance with South
African Statements of Generally Accepted Accounting Practice.
2. The results have been audited by Deloitte & Touche. Their unqualified audit
opinion is available for inspection at the company`s registered office.
Murray & Roberts - a South African partner of the 2002 World Summit on
Sustainable Development
The Group has exceeded its performance targets for the first two years of
Rebuilding Murray & Roberts. The unitary framework binding all operations to a
common business model is well established, as is the non-negotiable commitment
to sustainable earnings growth and value creation.
Commentary
The directors of Murray & Roberts are pleased to announce attributable earnings
of R505 million for the year ended 30 June 2002 (2001: R252 million) and basic
earnings excluding currency gain on offshore treasury funds, amortisation of
goodwill and exceptional items, of 130 cents per share, an 81% increase on last
year.
All business clusters show increased EBIT contributions and the operating margin
improved to 4,3% (2001: 2,6%).
Operating cash flow in the year was R793 million (2001: R558 million). Net asset
value per share at 30 June 2002 has increased by 34% to 798 cents.
The Group achieved an important benchmark, originally set for 2003, with a
return in excess of 20% on average ordinary shareholders` funds.
Performance
The building and civil engineering operations in South Africa have been
consolidated into a single business unit, delivering improved performance from a
thin market. International construction activities throughout SADC and in the
Middle East have improved on last year, as have our road building activities off
a low base.
Major industry and mining projects in the SADC region have underpinned another
solid performance. Further consolidation of our engineering-related operations
has created a significant capability for the delivery of integrated design and
build solutions into this market.
The capital expenditure programme supporting the automotive sector is proceeding
well with increased performance levels now evident. Stronger demand for railway
coach refurbishment has boosted this year`s result and the ISO tank container
market stabilised after three years of decline.
Companies consolidated within the supplies and services sector have shown a
further meaningful improvement on last year`s turnaround. Higher levels of
activity in the construction sector have increased demand, with the newly
constituted steel conversion business, asphalt and piping delivering excellent
results.
Problem road contracts in Uganda and Mozambique will have no further impact on
earnings. The Group is pursuing its contractual rights in all instances where
recovery is possible. New leadership teams have been appointed into those
operations that have not met the performance requirements of the Group in the
year.
Corporate costs continue to be reduced as the unitary business model delivers
improved value from the operations.
Translation gains
An exchange gain of R81 million was recorded on the Group`s offshore treasury
funds at 30 June 2002 (2001: R15 million).
The translation of the Group`s investment in foreign operations has increased
shareholders` funds by R169 million which has been taken directly to reserves.
Exceptional items
Provisions totalling R52 million in respect of warranties on disposals of
businesses carried forward from earlier years have been written back in the
current year. In addition, an interim dividend of R9 million was received from
the liquidation of Alloy Wheels International Canada, the carrying cost of which
was previously written off.
The Board has considered it prudent in the circumstances to increase the
property headlease provisions by a total of R58 million in the year.
Income from associate
Unitrans has reported a pleasing 21% increase in attributable earnings for the
year. Full details are available in their preliminary report. Although our
investment is under strategic review, Unitrans remains a solid and performing
investment.
Disposals
The following material disposals were concluded during the year under review:
The sale of Johnson Crane Hire with effect from 1 January 2002
The sale of Alloy Wheels International UK with effect from 30 June 2002
Prospects
A project order book of R5,8 billion was available at 30 June 2002, primarily as
a result of increased levels of activity in Africa and the Middle East.
Prospects for our major project capabilities in South and southern Africa have
improved in line with higher levels of fixed investment. This also offers
increased levels of opportunity to our supplies and services businesses, all of
which hold leading market positions in the region.
Our product order books are at their best levels in many years. The tank
container and railway coach facilities are operating full production lines,
while the engine component and wheel facilities continue to benefit from the
Motor Industry Development Programme.
We engage our markets proactively wherever possible leveraging our unique design
and build capability on a partnership basis, offering best value pricing. This
is a shift from the traditional reactive procurement process based on lowest
priced tender.
Unitrans has reported separately on its prospects and expects that it will
deliver real growth in the year ahead.
Overall, the Group has planned for revenue growth, improved margins and a
material increase in real earnings per share in the year ahead.
Dividend
As forecast in the interim report published on 27 February 2002, the significant
improvement in attributable earnings, supported by a strong cash flow, has
enabled the directors to declare a dividend of 35 cents per share in respect of
the year ended 30 June 2002. Attention is drawn to the formal dividend
announcement below. The Board intends to resume the payment of an interim
dividend in the forthcoming year.
On behalf of the Board
DC Brink, Chairman
BC Bruce, Chief Executive Bedfordview
RW Rees, Financial Director 28 August 2002
NOTICE TO SHAREHOLDERS
Declaration of Final Ordinary Dividend No. 101
Notice is hereby given that dividend No. 101 of 35 cents per share in respect of
the year ended 30 June 2002 has been declared payable to ordinary shareholders
in accordance with the following timetable:
Last day to trade cum the dividend Friday 11 October 2002
Shares commence trading ex the dividend Monday 14 October 2002
Record date Friday 18 October 2002
Payment date Monday 21 October 2002
Shareholders may not dematerialise or rematerialise their holdings of Murray &
Roberts shares between Monday 14 October 2002 and Friday 18 October 2002, both
days inclusive.
On Monday, 21 October 2002, the dividend will be electronically transferred to
the bank accounts of all certificated shareholders where this facility has been
mandated. Where this has not been mandated, cheques dated 21 October 2002 will
be posted on that date. Shareholders who have dematerialised their share
certificates will have their safe custody accounts, which are held in their
CSDP`s or brokers, credited on 21 October 2002.
By order of the Board
L J Lindsay Secretary
Bedfordview
28 August 2002
Directors: DC Brink (Chairman), BC Bruce* (Chief Executive), BN Bam, AJ de
Nysschen*, WP Esterhuyse, SE Funde, PG Joubert, SJ Macozoma, AJ Morgan, RW
Rees*, AA Routledge, KE Smith*, JJM van Zyl. *Executive
Secretary: LJ Lindsay
Registered office Transfer secretaries
Douglas Roberts Centre, Computershare Investor Services Limited
Skeen Boulevard, Bedfordview 11 Diagonal Street, Johannesburg 2001
Additional information available at www.murrob.com/annual report online 30
September 2002
"Our commitment to sustainable earnings growth and value creation is not
negotiable."
Date: 28/08/2002 04:11:30 PM Supplied by www.sharenet.co.za
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