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MUR - Murray & Roberts - Preliminary report for the year ended 30 June 2007

Release Date: 29/08/2007 17:30
Code(s): MUR
Wrap Text

MUR - Murray & Roberts - Preliminary report for the year ended 30 June 2007 Murray & Roberts Holdings Limited (Registration number: 1948/029826/06) ("Murray & Roberts" or "Group") Share Code: MUR ISIN code: ZAE000073441 HIGHLIGHTS OPERATING CASH INFLOW UP 224% TO R1,94 BILLION FULL YEAR DIVIDEND UP 93% TO 116 CENTS PER SHARE OPERATING PROFIT UP 100% TO R1,44 BILLION CONTINUING REVENUES UP 61% TO R17,9 BILLION HEADLINE EARNINGS UP 77% TO 325 CENTS PER SHARE ORDER BOOK UP 125% TO R22,5 BILLION 8,0% OPERATING MARGIN, UP 23% FROM 6.5% 20,9% RETURN ON EQUITY, UP 25% FROM 16,7% Murray & Roberts is a great company with committed leadership and people and we have built a formidable performance platform to engage the future potential of all our markets. We consolidated our position as South Africa`s construction industry leader during the year and entered the JSE Top 40 Index in May 2007. Our Group extended its operations in all key sectors of the domestic market and we substantially enhanced our focused international presence. We secured a number of major projects in many of our operating environments, which bodes well for the future performance of our Group. There is every indication that demand for our products and services will remain buoyant for the foreseeable future. Our Stop.Think safety campaign has contributed to a reduction in our lost-time injury frequency rate to our short term target of 3,0. However, serious workplace incidents have not shown equivalent improvement which has prompted a more rigorous regime of internal and independent review to secure our objective of zero disabling incident. The consolidation of Concor in the year and Clough from 1 July 2007 has provided the impetus to treble our core revenues over the three year period 2006 to 2009. Brian C Bruce Group Chief Executive Condensed consolidated income statement for the year ended 30 June 2007 Restated Audited Audited Annual Annual R millions 30.6.07 30.6.06 Revenue 17 873 11 098 Earnings before interest, exceptional 1 750 923 items, depreciation and amortisation Depreciation (290) (188) Amortisation of intangible assets (23) (16) Earnings before interest and exceptional 1 437 719 items Exceptional items (147) (78) Headlease and other property activities1 14 4 (note 3) Broad-based black economic empowerment - (80) (BBBEE) expense Impairment of Clough investment (115) - Impairment of Borbet loan (48) - Other 2 (2) Earnings before interest and taxation2 1 290 641 Net interest income 21 36 Earnings before taxation 1 311 677 Taxation (360) (176) Earnings after taxation 951 501 Share of (loss)/profit of associates (107) 1 Earnings from continuing operations 844 502 (Loss)/earnings from discontinued (48) 59 operations (note 2) Earnings for the period 796 561 Attributable to: Shareholders of the holding company 702 512 Minority shareholders 94 49 796 561
Earnings per share (cents) - Diluted 235 165 - Basic 239 168 Earnings per share from continuing operations (cents) - Diluted 251 146 - Basic 255 150 Total dividend per ordinary share (cents)* 116 60 Operating cash flow per share (cents) 583 180 1 The headlease and other property activities include the following: Rental income 164 144 Interest expense (39) (49) 2 Includes interest expense of R39 million (2006: R49 million) in respect of the headlease and other property activities * Based on year to which dividend relates SUPPLEMENTARY INCOME STATEMENT INFORMATION Reconciliation of weighted average number of shares in issue (000) Weighted average number of ordinary shares 331 893 331 893 in issue Less: weighted average number of shares (8 335) (12 139) held by The Murray & Roberts Trust Less: weighted average number of shares (676) - held by Murray & Roberts Limited Less: weighted average number of shares (28 953) (14 917) held by the Letsema BBBEE trusts Weighted average number of shares used for 293 929 304 837 basic per share figures Add: dilutive adjustment for share options 4 326 5 081 Weighted average number of shares used for 298 255 309 918 diluted per share figures Reconciliation of headline earnings Earnings attributable to shareholders of 702 512 the holding company Non-headline exceptional items 180 2 Loss/(profit) on disposal of discontinued 61 (16) operations Taxation on above adjustments 25 4 Headline earnings 968 502 Headline earnings per share (cents) - Diluted 325 162 - Basic 329 165 Reconciliation of headline earnings excl BBBEE expense Headline earnings as above 968 502 BBBEE expense - 87 Taxation effect on BBBEE expense - (20) Headline earnings excluding BBBEE expense 968 569 Headline earnings per share excluding BBBEE expense (cents) - Diluted 325 184 - Basic 329 187 Segmental analysis EBIT before exceptional Exceptional R millions Revenue items items 30.6.07 Construction & engineering 11 822 756 (128) Construction materials & 4 727 763 - services Fabrication & manufacture 1 324 83 - Corporate - (165) (19) Continuing operations 17 873 1 437 (147) Discontinued operations 715 26 (61) (note 2) 18 588 1 463 (208) 30.6.06 (Restated) Construction & engineering 6 966 324 (60) Construction materials & 3 205 479 (15) services Fabrication & manufacture 927 63 (4) Corporate - (147) 1 Continuing operations 11 098 719 (78) Discontinued operations 868 82 9 (note 2) 11 966 801 (69) Note: With the disposal of Foundries, the Steel Fabrication business previously reported under Construction Materials & Services have been included in the Fabrication & Manufacture cluster with the prior year comparatives being restated. Condensed consolidated balance sheet as at 30 June 2007 Restated Audited Audited Annual Annual R millions 30.6.07 30.6.06 ASSETS Non-current assets 4 175 3 589 Property, plant and equipment 2 011 1 714 Investment property 526 278 Goodwill 206 147 Other intangible assets 74 68 Deferred taxation assets 15 52 Associate companies 885 877 Other investments 440 435 Other non-current receivables 18 18 Current assets 8 836 6 796 Accounts receivable and other 2 625 2 110 Net amounts due from contract customers 3 402 2 878 Bank balances and cash 2 809 1 808 TOTAL ASSETS 13 011 10 385 EQUITY AND LIABILITIES Total equity 3 815 3 194 Attributable to equity holders of the 3 637 3 086 holding company Minority shareholders` interest 178 108 Non-current liabilities 1 103 1 027 Long-term provisions 64 22 Obligations under finance headleases* 78 155 Other long-term liabilities* 617 517 Other non-current liabilities 67 36 Deferred taxation liabilities 277 297 Current liabilities 8 093 6 164 Accounts payable and other 7 423 5 509 Bank overdrafts* 181 166 Short-term loans* 489 489 TOTAL EQUITY AND LIABILITIES 13 011 10 385 * Interest-bearing borrowings SUPPLEMENTARY BALANCE SHEET INFORMATION (R millions) Net asset value per share (cents) 1 279 1 031 Commitments Capital expenditure - spent 1 008 294 - authorised but unspent 1 537 862 Operating lease commitments 460 136 Contingent liabilities 88 131 Financial institution guarantees 4 359 1 945 Condensed consolidated cash flow statement for the year ended 30 June 2007 Restated Audited Audited Annual Annual R millions 30.6.07 30.6.06 Cash generated by operations before 1 691 1 063 working capital changes Cash outflow from exceptional items - (70) relating to BBBEE Cash outflow from headlease and other (115) (82) property activities Decrease/(increase) in working capital 637 (195) Cash generated by operations 2 213 716 Interest and taxation (278) (118) Operating cash flow 1 935 598 Dividends paid to shareholders of the (249) (154) holding company Dividends paid to minority shareholders (31) (29) Cash flow from operating activities 1 655 415 Cash flow from investing activities (851) (356) Property, plant and equipment and (968) (307) intangible assets (net) Business acquisitions /disposals(net) 93 (126) Other investments (net) 10 73 Other (net) 14 4 Cash flow from financing activities 181 (183) Net movement in borrowings 159 228 Treasury share disposal/(acquisition) 22 (411) Net decrease/(increase) in cash and cash 985 (124) equivalents Net cash and cash equivalents at beginning 1 642 1 733 of period Effect of foreign exchange rates 1 33 Net cash and cash equivalents at end of 2 628 1 642 period Condensed statement of changes in equity Other Hedging and
for the year ended 30 June 2007 Issued capital translation R millions capital reserves reserves Balances at 30 June 2005 1 425 33 17 Earnings attributable to shareholders of the holding company Recognition of financial instruments on acquisition of businesses Deferred taxation recognised directly in equity Earnings attributable to minority shareholders Purchase of minorities Other movements in minority interest Movement in share-based payment 24 reserve Foreign currency translation 83 movement on investments Movement in treasury shares (411) Dividend declared and paid Balances at 30 June 2006 1 014 57 100 Earnings attributable to shareholders of the holding company Movement in treasury shares 22 Recognition of hedging instrument (5) on financial instruments Earnings attributable to minority shareholders Other movements in minority interest Movement in share-based payment 20 reserve Foreign currency translation 61 movement on investments Dividend declared and paid Balances at 30 June 2007 1 036 77 156
for the year ended 30 June 2007 Retained Minority R millions earnings earnings Total Balances at 30 June 2005 1 592 97 3 164 Earnings attributable to shareholders 512 512 of the holding company Recognition of financial instruments on (29) (29) acquisition of businesses Deferred taxation recognised directly (1) (1) in equity Earnings attributable to minority 49 49 shareholders Purchase of minorities (5) (14) (19) Other movements in minority interest 5 5 Movement in share-based payment reserve 24 Foreign currency translation movement 83 on investments Movement in treasury shares (411) Dividend declared and paid (154) (29) (183) Balances at 30 June 2006 1 915 108 3 194 Earnings attributable to shareholders 702 702 of the holding company Movement in treasury shares 22 Recognition of hedging instrument on (5) financial instruments Earnings attributable to minority 94 94 shareholders Other movements in minority interest 7 7 Movement in share-based payment reserve 20 Foreign currency translation movement 61 on investments Dividend declared and paid (249) (31) (280) Balances at 30 June 2007 2 368 178 3 815 Notes: 1. Basis of preparation This preliminary report has been prepared and presented in accordance with IAS34: Interim Financial Reporting, the Companies Act, No. 61 of 1973 (as amended) and is derived from a set of Annual Financial Statements that are in compliance with International Financial Reporting Standards (IFRS). The accounting policies used in the preparation of these results are consistent in all material respects with those used in the annual financial statements for the year ended 30 June 2006 except for those listed below. The condensed financial statements have been prepared under the historic cost convention, except for the revaluation of certain investments and investment property. There are no standards that are currently in issue but not yet effective which would result in a change in accounting policy. The Group`s 2007 annual financial statements were audited by the Group`s external auditors, Deloitte & Touche, whose unqualified audit opinion is available for inspection at the company`s registered office. Change in accounting policy During the year the company changed its accounting policy for the valuation of investment property from depreciated historic cost to fair value. Management judges that this policy provides reliable and more relevant information and is in accordance with the international trends towards fair value accounting. The effect of the change in accounting policy was as follows: R millions 2007 2006 Decrease in depreciation costs - 4,9 Fair value adjustment 253 (4,9) Taxation effect (25) - Net increase in profit 228 - 2. Earnings from discontinued operations On 31 March 2007 the Group disposed of its Foundries business for R333 million. The comparative numbers also include the disposal of Criterion Equipment, a forklift truck distribution business. Restated R millions 30.6.07 30.6.06 Earnings from the discontinued operations are analysed as follows: (Loss)/profit on disposal/closure (61) 16 Earnings after taxation for the period 13 43 (48) 59 Earnings after taxation for the period is analysed as follows: Revenue 715 868 Earnings before interest and depreciation 68 123 Depreciation (42) (41) Earnings before interest, exceptional items 26 82 and taxation Exceptional items - (7) 26 75 Net interest expense (9) (15) Earnings before taxation 17 60 Taxation (4) (17) Earnings after taxation 13 43 Included in the 2007 cash flow statements are the following which relates to the discontinued operation: R millions 2007 2006 Cash flow from operating activities (5) 88 Cash flow from investing activities (24) (65) Cash flow from financing activities (39) 18 Net (decrease)/increase in cash and cash (68) 41 equivalents The fair value of assets sold and liabilities released are: Net assets 555 132 Net liabilities (222) (39) Proceeds received 333 93 Cash balances in business (1) (45) 332 48 3. Headlease and other property activities 14 4 Provision released to income statement - 14 Property fair value adjustment 253 - Settlement of structured finance (261) (4) liability Other property activities 22 (6) 4. Post balance sheet event The Group has reached agreement with Clough Limited ("Clough") and the Clough Family (McRae) on a recapitalisation package, including support for strategic vessel acquisition. Key aspects of the transaction are: - The agreed price for the total transaction is AUD36.8 cents per share. - McRae will sell to Murray & Roberts 3% of issued shares (15.3 million shares). - Murray & Roberts will underwrite a Rights Issue to raise about AUD40 million. - McRae will cede all its Rights Issue rights in the AUD40 million raising to Murray & Roberts and Murray & Roberts will take up its own rights - McRae will sell its convertible notes to Murray & Roberts including the outstanding coupons for AUD10.2 million. The estimated total cash outflow is R290 million. The consequence (where certain transactions are subject to Clough shareholder approval) is that Murray & Roberts reaches more than 60% ownership in Clough within 2 years. The Group will consolidate Clough into its accounts from 1 July 2007. Executive Summary On behalf of the Directors, we are pleased to announce a final dividend of 71 cents per share (2006: 40 cents per share) increasing the total dividend for the full year by 93% to 116 cents per share (2006: 60 cents per share). Attention is drawn to the formal dividend announcement contained herein. Operating cash inflow is up 224% at R1,94 billion (2006: R598 million) for the year with a year-end net cash position of R2,6 billion (2006: R1,6 billion) after net capital expenditure of R1,0 billion (2006: R338 million) and a net inflow of R93 million (2006: R126 million outflow) arising from acquisitions and disposals. The R637 million decrease in working capital (2006: R195 million increase) reflects improved payments in Middle East and advance payments on major projects. Shareholders are reminded that diluted headline earnings per share is compared to 184 cents for the year to 30 June 2006 which excluded an R87 million charge to the income statement (22 cents) relating to the granting of shares to almost 14000 employees in terms of the Group`s Broad Based Black Economic Empowerment (BBBEE) transaction in that year. Headline earnings of 325 cents per share is up 77% on the previous year at the top-end of recent guidance offered to the market and ahead of the prospects statements included in the 2006 Annual Report and 2007 Interim Report. Headline earnings per share has been negatively impacted by 38 cents as a result of the loss recorded by associate company Clough in providing for finalisation of legacy projects secured pre-acquisition to the Group. Operating profit increased 100% to R1,44 billion (2006: R719 million) on a 61% increase in continuing revenues to R17,9 billion (2006: R11,1 billion). The operating margin of 8,0% (2006: 6,5%) is the highest ever recorded by Murray & Roberts and has moved ahead of the strategic range of 5,0% to 7,5% established for Rebuilding Murray & Roberts. During the year the price of the Group`s share on the JSE Limited (JSE) increased 150% from 2540 cents to 6400 cents peaking more than 200% up at 8150 cents in July 2007. The Group entered the JSE Top 40 Index on 7 May 2007 and has subsequently become the largest company by market capitalisation in its sector. Shareholder Funds increased 18% to R3,6 billion and a return of 20,9% (2006: 16,7%) on average shareholder funds in the year exceeds the strategic Group target of 20%, despite the currently underperforming investment in Clough. An amount of R290 million in cash plus balance sheet support has been committed to the recapitalisation of Clough and to increase the Group`s shareholding above 60%. Interest-bearing long term liabilities increased slightly to R695 million (2006: R672 million). These primarily relate to working capital loans into Clough and Cementation Canada and instalment sales agreements in Concor. Market The year under review saw continued growth in levels of activity from all the Group`s regional and sectoral markets. The South African government has targeted Gross Fixed Capital Formation (GFCF) at 25% of Gross Domestic Product (GDP) by 2014 in an economy growing at between 4,5% and 6,0% per annum. Construction Spend, which is nominally targeted at a third of GFCF, this year breached 5% of GDP on its way to an estimated high of about 10% by 2011, which is up from a low of about 2,5% in 2000. This implies a potential nominal market growth in the range 15% to 25% per annum for the foreseeable future. All markets targeted by the Group continue to promise sustainable growth potential and in particular, major project opportunity. There is strong evidence of capacity constraints in the sector resulting in a welcome reduction in the high levels of destructive price competition that had become a worldwide characteristic of the industry through the 1990`s. In South Africa, interest rate increases have started to dampen consumer appetite for credit and the housing sector has felt a lowering in demand growth. Government`s promised investment into primary economic infrastructure has started to deliver the level and nature of major project opportunity specifically attractive to the Group. Global socio-economic growth and development, driven primarily from Asia, continues to place increased demand into the natural resources sector. Indications are that demand growth will continue for the foreseeable future before reaching a new sustainable level. As a consequence, the Group`s resources-driven international markets have remained positive with countries forming the Gulf Cooperative Council in the Middle East continuing to invest the free cash flow benefit of strong oil revenues into the extension of their regional economic infrastructure. The Canadian and Australian mining contracting markets have also continued to offer growth and conditions in the global oil & gas sector remain buoyant, which bodes well for the future performance of Australian subsidiary Clough. Order Book The Group`s project order book stood at R22,5 billion at 1 July 2007 (2006: R10,0 billion), an increase of 125% in the year and up from R15 billion at half- year. This includes R5,0 billion (AUD810 million) derived through the consolidation of Clough. The order book comprises Construction Middle East at R2,2 billion (R2,3 billion); Construction SADC at R8,5 billion (R3,8 billion); Mining SADC at R3,3 billion (R2,6 billion); Resources Global (including Clough) at R6,6 billion (R0,5 billion); and Engineering Contracting at R1,6 billion (R0,7 billion). The amounts in brackets are the comparative levels at 30 June 2006. The regional order book is SADC 58% (71%); Middle East 13% (23%); Australasia 24% (1%) and North America 5% (5%). During the year the Group became a key participant in some high-profile projects including the R24 billion Gautrain Rapid Rail Link; the R3,0 billion Greenpoint Stadium for the 2010 Soccer World Cup; the R21 billion Coega Aluminium Smelter for Alcan; and secured a partnership with Dubai Holdings owned Sama Dubai for managing the implementation of about R60 billion of its investment program. A number of Group companies have combined their strengths and capabilities and together with international and local partners as appropriate are ready to pursue the significant power station build program developing in Southern Africa. Murray & Roberts is well positioned to play a key role in the long-term implementation of this program, building on the experience of various companies acquired over the past two decades such as Genrec, Gillis Mason and Concor, all of which played a key role in the previous power station build program. Activity levels in the Group`s construction materials and services companies remain high, supporting a positive future outlook for performance delivery. The inclusion of Concor Technicrete has enhanced the Group`s market presence in this sector. Two contracts to build and supply more than 150 locomotives to Spoornet in South Africa will bear fruit in the coming year and there are plans for further upgrade and renewal of the total rolling stock asset in the region. The UCW order book stood at R2,6 billion at year-end. Operations The Group`s Southern Africa regional construction activities including new acquisition Concor recorded revenues up 138% at R5,0 billion (2006: R2,1 billion) and delivered operating profits of R328 million (2006: R35 million) at a margin of 6,6% (2006: 1,7%). This includes a positive R76 million contribution arising from a fair value adjustment on concession investments (2006: R68 million), but excludes recoveries of R26 million from various problem projects reported in the previous financial year. There has been a welcome but still incomplete turnaround in Murray & Roberts Construction under new leadership and Concor delivered a maiden contribution well ahead of expectation. Middle East construction recorded increased revenues of R2,4 billion (2006: R1,6 billion) and delivered an operating profit of R123 million (2006: R77 million) at a margin of 5,1% (2006: 4,8%). The Dubai International Airport project is a significant contributor to this performance, with handover of the facility proceeding to schedule. This complex and demanding project has placed a great deal of strain on our people, partners and cash flow, characterised through information delays, long and arduous working hours and conditions, resource constraints and late payment authorisations. Its success is testimony to the quality of our project leadership and corporate support, both so necessary for major project engagement. Engineering contracting and services operations experienced mixed conditions in the year with revenues of R794 million (2006: R611 million) delivering operating profits of R46 million (2006: R48 million) at a margin of 5,8% (2006: 7,9%). This includes a maiden contribution from Wade Walker in the second half-year. An excellent performance from engineering services was offset by major project and third party capacity related delay costs in the power generation and industrial contracting sector. Mining contracting operations in South Africa, Australia and Canada recorded revenues of R3,6 billion (2006: R2,7 billion) and an operating profit of R233 million (2006: R164 million) at a margin of 6,5% (2006: 6,1%). The South African operation experienced the start of disruptive industrial action in the year, while international mining markets continued to deliver strong growth. The Group`s construction materials and services companies have delivered exemplary performance again this year off improved levels of gross fixed investment in Southern Africa and Middle East. Reinforcing steel construction products and trading services increased revenues 33% to R2,2 billion (2006: R1,7 billion) at an operating profit of R168 million (2006: R127 million). Concrete and Asphalt infrastructure products increased revenues 27% to R1,24 billion (2006: R980 million) at an operating profit of R302 million (2006: R218 million). Clay, steel and concrete building products delivered revenues of R856 million (2006: R325 million) at an operating profit of R160 million (2006: R63 million). This includes a maiden contribution from Concor Technicrete. Specialist services to the construction and infrastructure sector delivered an operating profit of R133 million (2006: R71 million) on revenues of R411 million (2006: R235 million). This includes an increasing exposure to the strong Middle East market. Following disposal of the Group`s foundry businesses in the year, the operations of Genrec, Hall Longmore and UCW have been incorporated into a steel fabrication segment, which recorded increased revenues 43% up to R1,3 billion (2006: R927 million) at an operating profit of R83 million (2006: R63 million). Corporate overheads increased marginally to R144 million (2006: R140 million) in the year, excluding a charge of R21 million (2006: R7 million) relating to share-based payments accounted for in terms of IFRS 2. Corporate capacity plays an increasing and important role engaging risk mitigation in the Group`s major project and diverse geographic operations. Clough Limited Murray & Roberts has recorded an associate loss of R114 million from its 49,1% investment in Australia-based Clough Limited. This arises from a provision of AUD131 million raised by Clough against the future completion of the G1 project in India and final settlement of the BassGas dispute in Australia. This provision has contributed to an attributable loss in the company of AUD105,3 million (2006: AUD15,1 million loss). Excluding the provision, ongoing operations in Clough delivered an attributable profit of AUD25,4 million on turnover of AUD761 million in the year. The Group reviewed its investment in Clough following three years of losses including the significant provision this year. An impairment has been taken as an exceptional item that appropriately reduces the Group`s holding cost in the company. Murray & Roberts will consolidate Clough into its accounts from 1 July 2007 and has undertaken to underwrite a recapitalisation and support package for the company. Subject to Clough shareholder approval, the Group will consequently hold above 60% of the shares in Clough at an average price of AUD0,46 cents per share. The Clough Board is being restructured under the independent chairman; a new managing director with global oil & gas engineering and contracting experience has been appointed; and the Group`s Australian chief executive resumes his role as a non-executive director of the company. Full details on the Clough financial results for the year to 30 June 2007 and its prospects statement are available on www.clough.com.au Exceptional Items A loss of R103,4 million arose from the final disposal of the Group`s automotive interests and a balance sheet impairment of R115 million was taken against the Group`s investment in Clough. Potential liabilities associated with the Group`s property headlease structures have been resolved. The cost of the settlement was offset by a fair value adjustment on property assets. Black Economic Empowerment The Group has continued to build its broad-based black economic empowerment (BBBEE) capability, with formal measures and regular reporting in place to ensure appropriate focus. An independent audit of the Group`s BBBEE status was conducted in the year, confirming an effective empowerment ownership of 25,83%. Total economic value created for an estimated 20000 employees and community participants in the share-based ownership and trust scheme has exceeded R1,5 billion in just 18 months. Acquisitions and Disposals The capitalisation of Clough in December 2006 required an investment of AUD23,2 million, and the Group increased its shareholding by 3,0% to 49,1% at a cost of AUD6,3 million. An 80% stake in specialist contractor Wade Walker was acquired effective January 2007 for the sum of R68 million. The company is performing ahead of expectation and contributes to the Group`s engineering capability in the mining, industrial and power sector. The remaining 50% held by the Group in Borbet Africa was sold in the first half- year, followed by the disposal of the foundries businesses, which had been part of the Group for 25 years. Murray & Roberts continues to seek acquisition opportunities that will serve to enhance its existing market presence. All existing businesses are reviewed on a regular basis to ensure they are either aligned to the Group`s strategic and performance objectives, or that they fall within the general competence of Group leadership. Health Safety and Environment The declared objective of Group leadership is zero fatalities and disabling injuries on work sites and facilities under control of the Group. Regrettably, 11 people (2006: 10 people) were fatally injured on Murray & Roberts worksites in a year where 172 million hours (2006: 116 million hours) were recorded as worked. Of the fatalities 18% (2006: 50%) were employees of business partners. The Stop.Think safety campaign has enhanced behavioural awareness across the Group and the Lost Time Injury Frequency Rate (LTIFR) of 3,0 (2006: 4,6) meets the Group`s medium-term target. The Group`s long-term LTIFR target of 1,0 will demand significant management attention to the cultural challenges that influence the change in attitude needed for sustainable HSE success. A risk-based HIV/AIDS Policy Framework has been agreed for implementation across the Group, while work-related health issues such as airborne and noise pollution have been mapped and are being addressed. A study into the Group`s carbon footprint has been initiated that will guide new levels of investment or disinvestment in the context of the global climate change challenge. Prospects and Trading Statement Murray & Roberts believes that profitable opportunity drives capacity and that industry sector leaders play a key role in this process. The Directors have approved a number of investment initiatives driven by management that will enhance Group and industry capacity to meet the complex and growing demands of the market over the foreseeable future. Reviewing past Annual Reports of the Group, there seems little that has changed from the period 40 years ago in 1967 when the critical mass of the Group was enhanced through the merger of Roberts Construction and Murray & Stewart, and 30 years ago in 1977 when fixed investment in South Africa commenced its 25 year period of decline. Yet Murray & Roberts in particular and the industry in general rose to the challenge at the time and delivered significant world class economic infrastructure through a period of resource and skills deficit. This was a period when many people still in the industry, started their careers. But as it was in 1967, critical mass remains an important differentiator for success in a market where major and complex projects become the order of the day. Global scale for global projects and investment programs remains a challenge in our industry sector, where the majority of players are small relative to risk and impediments to consolidation on a national level are high. Fully diluted headline earnings per share after consolidation of Clough is expected to grow between 30% and 40% in the year ahead, supported by ongoing market related growth. This Trading Statement has not been audited or reviewed and is provided in terms of paragraph 3.4(b) of the JSE Listings Requirements. On behalf of the directors Roy Andersen Brian Bruce Roger Rees Chairman of Group Chief Group Financial the Board Executive Director Bedfordview 29 August 2007 Notice to Shareholders Declaration of final ordinary dividend (No. 111) Notice is hereby given that the final dividend, dividend No. 111 of 71 cents per share in respect of the financial year ended 30 June 2007 has been declared payable to shareholders recorded in the register at the close of business on Friday 19 October 2007. The salient dates for the final ordinary dividend are as follows: Last day to trade cum the dividend Friday, 12 October 2007 Shares commence trading ex dividend Monday, 15 October 2007 Record date Friday, 19 October 2007 Payment date Monday, 22 October 2007 Share certificates may not be dematerialised or re-materialised between Monday 15 October 2007 and Friday 19 October 2007, both days inclusive. On Monday 22 October 2007 the dividend will be electronically transferred to the bank accounts of all certificated shareholders where this facility is available. Where electronic fund transfer is not available or desired, cheques will be dated and posted on 22 October 2007. Dematerialised shareholder accounts will be credited at their CSDP or broker on Monday 22 October 2007. By order of the Board Y Karodia Group Secretary Bedfordview 29 August 2007 Murray & Roberts Holdings Limited Registration No. 1948/029826/06 Directors: RC Andersen* (Chairman) BC Bruce (Managing & Group Chief Executive) SJ Flanagan SE Funde* NM Magau* JM McMahon* IN Mkhize* RW Rees1 AA Routledge* MJ Shaw* KE Smith2 JJM van Zyl* RT Vice* 1 British 2 Irish *Non executive Secretary: Y Karodia Registered office: Registrar: Douglas Roberts Link Market Services South Africa Centre, (Pty) Limited 22 Skeen Boulevard, 11 Diagonal Street, Johannesburg Bedfordview 2001 PO Box 1000 Bedfordview 2008 Date: 29/08/2007 17:30:24 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.

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