Wrap Text
Provisional Report for the year ended 30 June 2014
Murray & Roberts Holdings Limited
(Incorporated in the Republic of South Africa)
Registration number: 1948/029826/06
JSE Share Code: MUR
ADR Code: MURZY
ISIN: ZAE000073441
(“Murray & Roberts” or “Group” or “Company”)
PROVISIONAL REPORT FOR THE YEAR ENDED 30 JUNE 2014
FINANCIAL HIGHLIGHTS
- Revenue up to R36 billion (June 2013: R34,2 billion^)
- Attributable Earnings up to R1,3 billion (June 2013: R1 billion)
- Diluted continuing HEPS of 205 cents (June 2013: 123 cents^)
- Diluted EPS of 305 cents (June 2013: 245 cents)
- Net cash of R1,8 billion (June 2013: R4,3 billion)
- NAV of R13 per share (June 2013: R16 per share)
- Dividend of 50 cents per share (June 2013: Nil cents per share)
SALIENT FEATURES
- Lost time injury frequency rate improved to 0.80 (June 2013: 0.82), but regrettably four fatal incidents
(June 2013: 2) were reported
- Revenue from continuing operations improved to R36 billion (June 2013: R34,2 billion^)
- Attributable earnings improved to R1,3 billion (June 2013: R1 billion)
- Diluted continuing HEPS improved to 205 cents (June 2013: 123 cents^)
- Order book of R40,9 billion (June 2013: R46,1 billion)
- Net cash of R1,8 billion (June 2013: R4,3 billion) after the Clough Limited (“Clough”) minority acquisition
in December 2013 of R4,4 billion
- NAV of R13 per share (June 2013: R16 per share) after the premium (goodwill) of R3,1 billion (R7 per share)
associated with the Clough minority acquisition in December 2013 was written off against equity, as
required in terms of IFRS.
- Resumption of dividend payments
- Successful conclusion of the Recovery & Growth strategy
- Settlement of GPMOF claim and realisation of additional income of R323 million
- Acquisition of Clough minority shares and delisting of Clough
- Sale of Construction Products businesses completed
^ The prior year information has been restated for discontinued operations.
A NEW STRATEGIC FUTURE
Over the last three years, during which it delivered its Recovery & Growth strategy, the Group restored
financial stability and returned to profitability, re-organised and re-energised the businesses and resumed
the dividend payment.
The Group is now proceeding with its longer term plan to build a New Strategic Future. The board of directors
of Murray & Roberts (“Board”) recently approved the New Strategic Future plan, which will be shared with
stakeholders in more detail as the plan unfolds.
By 2020 the Group aims to be a leading international diversified project engineering, procurement and
construction group in selected natural resources market sectors. Specifically, the Group aims to grow in the
oil and gas, mining, energy and industrial markets, where it is able to leverage its current capabilities.
The Group is an international, engineering-led contractor. In repositioning Murray & Roberts and its brand to
more accurately describe the target market sectors in which the Group applies its core capability, the Group
renamed its four operating platforms as follows:
- Oil & Gas (previously Construction Australasia Oil & Gas and Minerals)
- Underground Mining (previously Construction Global Underground Mining)
- Energy & Industrial (previously Engineering Africa)
- Infrastructure & Building (previously Construction Africa and Middle East)
In the financial year ahead, the Group will focus on consolidating the strong base for future growth that has
been established through the successful delivery of its Recovery & Growth strategy.
HEALTH AND SAFETY
In FY2014 the Group’s safety performance improved to a record-low lost time injury frequency rate (“LTIFR”)
of 0.80 (2013: 0.82), by driving the application of its health and safety framework and commitment to zero
harm. Tragically, four fatalities (2013: 2) were recorded in FY2014: two in Infrastructure & Building
platform, one in the Oil & Gas platform and one in the Underground Mining platform. The Board extends its
condolences to the families of the deceased. Fatal workplace incidents are unacceptable and the Group remains
committed to the prevention of all serious safety incidents.
During the year, the Group completed the first phase of its Zero Harm Through Effective Leadership programme,
which emphasises the role of leadership in bringing about sustainable improvements in health and safety while
driving a high-performance culture.
FINANCIAL YEAR TO 30 JUNE 2014
The graph^^ reflects diluted continuing HEPS from FY2010. Prior year earnings and continuing HEPS have been
restated as a result of the classification of the Group’s shareholding in Tolcon as held for sale.
In FY2014 the Group reported revenue of R36 billion (June 2013: R34,2 billion) and attributable earnings of
R1,3 billion (June 2013: R1 billion). Diluted earnings per share was 305 cents (June 2013: 245 cents).
Diluted continuing headline earnings per share was 205 cents (June 2013: 123 cents^), representing growth of
67%, compared to the last year.
At 30 June 2014, the net cash position was R1,8 billion (June 2013: R4,3 billion), after the Group acquired
the minority shareholding in Clough for R4,4 billion in December 2013.
The Group’s order book reduced to R40,9 billion (June 2013: R46,1 billion). The reduction is primarily due to
the run-off in Clough’s order book as the nature of its work is changing from longer term greenfields
liquefied natural gas (“LNG”) projects to shorter term brownfields projects.
OPERATING PERFORMANCE**
Oil & Gas1
Corporate
Construction Commissioning overheads
R millions Engineering & Fabrication Global Marine & Brownfields and Other2 Total
June 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013
Revenue 4 794 4 659 7 096 7 023 2 466 884 2 013 1 103 1 111 1 131 17 480 14 800
Operating
profit/(loss) 698 660 428 411 117 37 215 101 (432) 293 1 026 1 502
Margin (%) 15% 14% 6% 6% 5% 4% 11% 9% (39%) 26% 6% 10%
Order Book 7 971 6 267 1 014 6 758 2 437 3 782 5 292 3 786 - - 16 714 20 593
People 4 918 6 343
Segment assets 3 710 3 478
Segment
liabilities 3 649 4 070
LTIFR
(Fatalities) 0,35(1) 0.2(0)
1 The segmental classification was changed compared to the prior year, as a result the prior year
comparatives have been restated.
2 Operating profit includes R67 million transaction costs relating to the acquisition of the Clough non-
controlling interests as well as R83 million onerous lease costs. Prior year operating profit includes
R681 million profit on sale of Forge Group Limited (“Forge”) disclosed under Corporate overheads and
other.
The Board is pleased with the R4,4 billion acquisition of the minority shareholding in Clough in
December 2013 and the strong financial results delivered in the period under review.
Financial Performance: This platform now comprises the following operations; Clough, e2o and several
strategic joint ventures. Murray & Roberts Marine was incorporated into the Oil & Gas platform effective
1 July 2014.
Clough recorded an excellent financial result. Revenues increased by 18% to R17,5 billion (June 2013:
R14,8 billion) and operating profit reached R1 026 million (June 2013: R1 502 million – which included
R681 million profit on the disposal of Clough’s investment in Forge). The order book decreased to
R16,7 billion (June 2013: R20,6 billion). In Australia, the investment boom in new LNG projects is slowing
down and transitioning to a brownfields operations and maintenance market, creating opportunities for Clough
to secure new contracts for services on the projects it helped build. Consequently, the order book comprises
smaller and shorter term contracts.
Operational Performance: Clough continues to deliver strong operational and financial results. The Clough
AMEC Joint Venture signed a A$20 million Engineering, Procurement and Construction Management contract for
Arrow Energy’s Daandine Expansion Project and was awarded a contract for the engineering, detailed design and
provision of procurement services for the Rio Tinto Cape Lambert Power Station project. BAM Clough’s marine
business continues to perform strongly and was recently awarded a A$109 million contract to construct
Fortescue Metals Group’s AP5 Jetty. The platform is preparing to extend its engineering service offering
globally. In August 2014, Clough completed a US$5 million dollar strategic acquisition of CH-IV, a boutique
engineering company based in the United States of America and highly regarded in micro, midscale and large
scale LNG developments.
Prospects: Although Clough’s order book has reduced, the outlook remains promising with work to continue on
major LNG projects including Chevron’s Gorgon and Wheatstone projects as well as INPEX’s Ichthys and Shell’s
Arrow projects. Clough is also well positioned to increase its scope of work on these projects.
Significant coal seam gas (“CSG”) greenfield expansion projects also exist on the east coast of Australia,
where Clough has a strong presence and is currently performing pre-FEED engineering support work to Arrow’s
CSG project and is well positioned to win the FEED contract.
The successful completion of ExxonMobil’s PNG LNG project has helped attract additional LNG investment into
Papua New Guinea. Clough’s successful 30-year track record in this region positions the company well to win
future work in this region.
Gas will continue to be a growth sector globally, with investment shifting to new basins, including Africa
and America. Through its work with some of the world’s largest energy companies, Clough aims to follow its
client’s to new locations, while utilising Murray & Robert’s global presence to facilitate entry into new
regions.
UNDERGROUND MINING
R millions Africa Australasia The Americas Total
June 2014 2013 2014 2013 2014 2013 2014 2013
Revenue 3 111 3 203 699 1 014 2 818 3 687 6 628 7 904
Operating
profit/(loss) 57 (65) 49 85 152 298 258 318
Margin (%) 2% (2%) 7% 8% 5% 8% 4% 4%
Segment assets 1 060 1 195 636 661 1 415 1 609 3 111 3 465
Segment liabilities 987 1 153 127 235 637 748 1 751 2 136
People 6 157 6 163 492 184 1 037 1 342 7 686 7 689
LTIFR (Fatalities) 2,18(1) 2.5(1) 0,97(0) 1.0(0) 0,78(0) 1.2(0) 1,90(1) 2.3(1)
Order Book 6 157 6 406 556 1 094 3 225 2 434 9 938 9 934
Financial Performance: This platform comprises the following operations; Murray & Roberts Cementation,
Cementation Canada, Cementation USA, Cementation South America and RUC Cementation Mining.
Revenues decreased by 16% to R6,6 billion (June 2013: R7,9 billion) and operating profit of R258 million
(June 2013: R318 million) was also down from the previous year. The order book was maintained at R9,9 billion
(June 2013: R9,9 billion).
Operational Performance: Considering the recent subdued state of the commodity cycle, the platform is
performing well and is showing strong growth potential in developing its order book in all main geographic
areas off a relatively low base. Murray & Roberts Cementation has received its first major order from
De Beers on the Venetia project to the value of R2,6 billion. Negotiations on the multi-billion Rand Kalagadi
Manganese contract are continuing, where we have been appointed as the preferred bidder. The North American
business now holds a strong order book after the two major awards, Kennecott Utah Copper (R600 million ) and
Lundin Eagle Nickel and Copper (R1,1 billion), received earlier this calendar year. In Australia, market
conditions remained tough, impacting RUC Cementation Mining’s order book. Tender activity in all other
geographic regions is increasing, which is a good sign of market improvement.
Prospects: The platform anticipates an improvement in the global mining sector as demand for commodities
increases. There is a large investment pipeline of underground projects in regions where the platform has a
presence. With its global footprint, and the ability to pool and leverage its resources, the platform is well
placed to win and execute work for its clients as market conditions improve. Most key commodities are
represented in the current portfolio of projects, and significant opportunities for organic growth exist as
mining activity picks up. Murray & Roberts Cementation progressed its Africa strategy through its Kitwe
office in Zambia, enhancing its presence in Zambia and providing a springboard into sub-Saharan Africa.
ENERGY & INDUSTRIAL
R millions Power Programme3 Engineering4 Total
June 2014 2013 2014 2013 2014 2013
Revenue 3 685 4 008 1 070 1 028 4 755 5 036
Operating profit/(loss) 238 227 (94) (90) 144 137
Margin (%) 6% 6% (9%) (9%) 3% 3%
Segment assets 1 130 1 328 571 509 1 701 1 837
Segment liabilities 1 111 1 233 327 453 1 438 1 686
People 5 276 6 243 1 628 898 6 904 7 141
LTIFR (Fatalities) 0,89(0) 0.7(0) 0,44(0) 0.2(0) 0.8(0) 0.5(0)
Order Book 5 503 5 890 657 580 6 160 6 470
3 Power programme contracts and Genrec power programme contracts.
4 Includes Electrical & Control Systems, Resources & Industrial, Water and Power & Energy non-power
programme projects and Genrec non-power programme contracts.
Financial Performance:
This platform comprises the following operations; Murray & Roberts Power & Energy (previously
Murray & Roberts Projects), Murray & Roberts Resources & Industrial (previously Concor Engineering),
Murray & Roberts Water, Murray & Roberts Electrical & Control Systems (previously Wade Walker) and Genrec.
Revenues decreased by 6% to R4,8 billion (June 2013: R5,0 billion) and operating profit improved to
R144 million (June 2013: R137 million). The order book reduced to R6,2 billion (June 2013: R6,5 billion).
Operational Performance:
The platform continues to be largely dependent on the Kusile and Medupi power station projects, whilst it is
establishing a position in the broader local petrochemical, industrial engineering and renewables sectors.
The platform is also targeting the industrial water sector and it recently secured its second mine water
treatment contract, for a blue chip mining client in Ghana.
Murray & Roberts Resources & Industrial and Murray & Roberts Electrical & Control Systems have recently been
consolidated under a single management team to optimise overhead costs. Significant strategic partnerships
have been established to enable specific technologies and solutions to be offered to the market.
Prospects:
The key prospects in the short term lie in the renewable energy programme and Murray & Roberts
Power & Energy has established good relationships to access a fair share of work on available projects.
The power programme on Medupi and Kusile still offers opportunities for most of the businesses and accessing
these opportunities remains a priority. Further power sector work in the management of assets, either as
maintenance, outage management and execution or operations, can deliver opportunity for all the platform
businesses.
Although project wins in the industrial water market have been few, a good foothold has been established in
certain water treatment opportunities by securing the front end engineering packages. Returning to increased
involvement in the petrochemical market presents some immediate opportunities. The platform is particularly
qualified to operate in this sector as it is able to bring its significant power programme experience and
lessons learnt to a market with similar skill set requirements.
INFRASTRUCTURE & BUILDING
Construction Africa Marine Middle East Total
June 2014 20135 2014 2013 2014 2013 2014 20135
Revenue 5 740 5 605 496 288 940 575 7 176 6 468
Operating (loss)/profit (189) (89) 302 51 83 (47) 196 (85)
Margin (%) (3%) (2%) 61% 18% 9% (8%) 3% (1%)
Segment assets 3 172 3 677 432 915 2 001 1 823 5 605 6 415
Segment liabilities 2 542 2 458 198 643 1 988 2 070 4 728 5 171
People 5 581 6 603 152 53 94 106 5 827 6 762
LTIFR (Fatalities) 0,87(2) 0.9(0) 0(0) 0(0) 0(0) 0.3(0) 0.5(2) 0.7(0)
Order Book 5 881 7 053 125 269 2 073 1 394 8 079 8 716
5 Restated for discontinued operations.
Financial Performance:
This platform comprises the following operations; Murray & Roberts Buildings, Murray & Roberts Middle East,
Murray & Roberts Western Cape, Murray & Roberts Botswana, Murray & Roberts Namibia, Murray & Roberts
Infrastructure, Concor Opencast Mining and PPP Investments and Services (Murray & Roberts Concessions).
Revenues increased by 11% to R7,2 billion (June 2013: R6,5 billion) and operating profit of R196 million
(June 2013: R85 million loss) was recorded. The order book reduced to R8,1 billion (June 2013: R8,7 billion).
Operational Performance:
The platform has returned to profitability, albeit at low margins as the South African construction sector
continues to be extremely competitive. The platform continues to seek value and improve on operational
excellence. The Middle East secured two new projects in the year under review, a mixed-use residential
development in Abu Dhabi (R700 million) and a design and build project in Qatar (R320 million). These were
the first new project awards since 2010. The platform’s growth into Africa (beyond SADC) is being pursued.
Prospects:
The platform has a sizeable order book in a market which remains highly competitive with low profit margins.
The South African market in general remains subdued, with pockets of activity in buildings and
infrastructure. The platform is well positioned as preferred bidder to implement civil infrastructure work on
three wind farms in the new financial year. Several opencast mining opportunities have been identified in
South Africa and elsewhere in Africa, but these are yet to come to market.
The Namibian buildings market is buoyant and in contrast, the market in Botswana is depressed presenting
little opportunity in the short term. Building activity in the Middle East has increased modestly.
DISPOSAL OF NON-CORE ASSETS:
Clough Marine
Steel Reinforcing Services & Construction
R millions Tolcon Products Properties Properties SA Products7 Total
June 2014 2013 2014 20136 2014 2013 2014 2013 2014 2013 2014 20136
Revenue 414 366 113 621 12 56 2 4 1 484 3 957 2 025 5 004
Operating
profit/(loss) 50 58 47 (28) (45) (12) 6 3 522 387 580 408
Trading
profit/(loss) 50 58 47 (47) (45) (12) 6 3 (17) 267 41 269
Net
profit
on sale of
businesses - - - 19 - - - - 539 120 539 139
Margin (%) 12% 16% 42% (5%) (375%) (21%) 300% 75% 35% 10% 29% 8%
Order book - - - - - - - - - 374 - 374
6 Restated for adoption of IFRS 11: Joint Arrangements. The results of affected joint ventures are
now equity accounted rather than proportionately consolidated, and the net asset value included
under investment in joint ventures.
7 Includes Hall Longmore, Rocla, Much Asphalt, Technicrete, Ocon Brick and UCW (only in 2013).
As announced on 7 August 2014, Murray & Roberts has entered into an agreement of sale for its shareholding in
Tolcon. This agreement, which supports the Group’s focus on its core capabilities of engineering and
construction, is subject to Competition Commission and other approvals. The agreement excludes the
investments in the Bombela Concession and Bombela Operating Companies and also Chapman’s Peak’s Entilini
Concession and its Operating Companies - the Group’s Concessions businesses are not part of Tolcon.
Stakeholders will be updated on the outcome of the transaction in due course.
UPDATE ON THE GROUP’S MAJOR CLAIMS PROCESSES
In favour of the Group:
Gorgon Pioneer Materials Offloading Facility (“GPMOF”) – Murray & Roberts announced on 9 June 2014 that the
Company had reached a financial settlement with Boskalis Australia (Pty) Ltd in respect of its GPMOF major
claim. The parties negotiated a settlement on all claims and counter claims and the agreement provides for
two cash payments, end-June 2014 and end-September 2014. The uncertified revenue taken to book on GPMOF
during previous financial years has now been certified. This settlement achieved additional income of
R323 million.
Gautrain Sandton Cavern Claim – The merits of this claim was ruled by the arbitrator in favour of the Bombela
Civils Joint Venture (45% shareholding in the Bombela Civils Joint Venture) in October 2013. The quantum
hearing is scheduled for May 2015.
Against the Group:
Gautrain Water Ingress Dispute – In November 2013 an arbitration award was made in favour of the Gauteng
Province, in the Gautrain water ingress dispute between the Gauteng Province and the Bombela Concession
Company. Based on an assessment by a panel of technical experts and design consultants who were
appointed to perform a technical evaluation of the potential remedial work that may be required, the Company
recorded a R300 million provision for its share of potential costs to be incurred by the Bombela Civils Joint
Venture. The amount of any other potential financial compensation, if any, related to the matter cannot be
determined.
In arbitration:
Gautrain Delay & Disruption Claim – This is by far the largest element of the Gautrain claims. The legal
process on this multi-billion rand claim is progressing. The claim is not expected to be settled sooner than
2016. Any award will attract interest dating from 2009 to the date of award.
Dubai International Airport – The arbitration for the Dubai International Airport claim is ongoing and the
claim is expected to be resolved during the 2015 calendar year. Freshfields, an international law firm, has
recently been appointed to lead the legal process in this claim resolution process.
UNCERTIFIED REVENUES
Total uncertified revenue, largely represented by the Group’s outstanding major claims on Gautrain Delay &
Disruption and Dubai International Airport, reduced to R1,6 billion (June 2013: R2,1 billion). The reduction
in uncertified revenue is mainly attributable to the settlement of the GPMOF claim.
The Group’s uncertified revenue on the projects mentioned above is conservatively lower than the estimated
value of its claims.
COMPETITION COMMISSION
The Group rejects any form of anti-competitive behaviour.
The five remaining historical incidents of collusive conduct, excluded from the concluded Fast-Track
Settlement Process (“FTSP”), have been settled with the Competition Commission (“Commission”). The penalty on
these transgressions is not material compared to the penalty imposed on the conclusion of the FTSP. The Group
provided for this penalty in the FY2013 accounts. The Group will disclose full details to stakeholders as
soon as all administrative processes with the Commission have been concluded.
Six former directors of subsidiary companies were implicated in the Commission’s investigation. These persons
are no longer employed by the Group; the last of whom left in 2010. Murray & Roberts is in the process of
taking action against these former executives.
DIVIDEND DECLARATION
Attention is drawn to the formal dividend announcement contained herein. In terms of the Company’s Dividend Policy,
the Board has declared a gross annual dividend of 50 cents per ordinary share (The Company has sufficient STC
credits and consequently no withholding tax will be deducted) in respect of the year ended 30 June 2014.
The dividend has been declared from income reserves.
In terms of the Dividends Tax effective 1 April 2012, the following additional information is disclosed:
- The dividend is subject to dividend withholding tax of 15%. In determining dividend withholding
tax, STC credits must be taken into account.
- The STC credits utilised per share amount to 50 cents per share. The net dividend will be 50 cents per
share as the Company has sufficient STC credits to the value of 50 cents per share to offset the 15%
withholding tax in full for those shareholders who are not exempt from dividend withholding tax.
- The number of shares in issue at the date of this declaration is 444 736 118 and the company’s tax
reference number is 9000203712.
In order to comply with the requirements of Strate, the relevant details are:
Event Date
Last day to trade (cum-dividend) Friday, 3 October 2014
Shares to commence trading (ex-dividend) Monday, 6 October 2014
Record date (date shareholders recorded in books) Friday, 10 October 2014
Payment date Monday, 13 October 2014
No share certificates may be dematerialised between Monday, 6 October 2014 and Friday, 10 October 2014, both
dates inclusive.
On Monday, 13 October 2014 the dividend will be electronically transferred to the bank accounts of all
certificated shareholders where this facility is available. No dividend cheques will be paid to shareholders
who have not provided their banking details to the transfer secretaries: Link Market Services. Accordingly,
the cash dividend will remain unpaid until such time as the shareholder has provided their relevant banking
details to the transfer secretary, to receive the cash dividend by electronic funds transfer. No interest
will be paid for unpaid dividends.
CHANGES TO THE BOARD
Ms. Thenjiwe Chikane resigned from the Board on 20 August 2013. Mr. Michael McMahon was appointed to the
Audit & Sustainability Committee on 18 September 2013 and Mr. Bert Kok was appointed as the company secretary
on 26 February 2014, succeeding Mrs. Rentia Joubert.
Subsequent to year end, Mr. Ralph Havenstein was appointed as an independent non-executive director and
member of the Health, Safety & Environment Committee and Social & Ethics Committee, with effect from
1 August 2014. Further appointments are planned.
PROSPECTS STATEMENT
The Board is pleased with the Group’s improved financial position and expects the earnings growth trend to
continue in the medium-to long term.
The information on which this prospects statement is based has not been reviewed or reported on by the
Group’s external auditors.
On behalf of the directors:
Mahlape Sello Henry Laas Cobus Bester
Chairman of the Board Group Chief Executive Group Financial Director
Bedfordview
27 August 2014
^ The prior year information has been restated for discontinued operations.
^^ The restated information for FY2010, FY2011 and FY2012 is the responsibility of the Board and has been
presented for illustrative purposes only. This information has not been reviewed or reported on by the
Group’s external auditors.
** The operating performance information disclosed has been extracted from the Group’s operational reporting
systems. The “LTIFR” information has not been subject to a review by the Group’s auditors. The Corporate &
Properties segment is excluded from the operational analysis. Unless otherwise noted, all comparisons are
to the Group’s performance as at and for year ended 30 June 2013.
SUMMARISED CONSOLIDATED STATEMENT OF FINANCIAL PERFORMANCE
FOR THE YEAR ENDED 30 JUNE 2014
Audited Audited5
Annual Annual
R millions 30 June 2014 30 June 2013
Continuing operations
Revenue 36 039 34 209
Profit before interest, depreciation and amortisation 2 241 2 377
Depreciation (685) (703)
Amortisation of intangible assets (23) (25)
Profit before interest and taxation (note 2) 1 533 1 649
Net interest expense (58) (117)
Profit before taxation 1 475 1 532
Taxation (499) (529)
Profit after taxation 976 1 003
Income from equity accounted investments 1 165
Profit from continuing operations 977 1 168
Profit from discontinued operations (note 3) 423 302
Profit for the year 1 400 1 470
Attributable to:
– Owners of Murray & Roberts Holdings Limited 1 261 1 004
– Non-controlling interests 139 466
1 400 1 470
Earnings per share from continuing and discontinued operations (cents)
– Diluted 305 245
– Basic 310 247
Earnings per share from continuing operations (cents)
– Diluted 203 174
– Basic 206 175
Net asset value per share (Rands) 13 16
Dividends per share (cents) 50 -
Supplementary statement of financial performance information
Number of ordinary shares in issue (‘000) 444 736 444 736
Reconciliation of weighted average number of shares in issue (‘000)
Weighted average number of ordinary shares in issue 444 736 444 736
Less: Weighted average number of shares held by The Murray
& Roberts Trust (331) (3 189)
Less: Weighted average number of shares held by the Letsema
BBBEE trusts (31 770) (31 863)
Less: Weighted average number of shares held by the
subsidiary companies (6 167) (2 809)
Weighted average number of shares used for basic per share
calculation 406 468 406 875
Add: Dilutive adjustment for share options 7 592 3 813
Weighted average number of shares used for diluted per
share calculation 414 060 410 688
Headline earnings per share from continuing and
discontinued operations (cents) (note 4)
– Diluted 217 186
– Basic 221 188
Headline earnings per share from continuing operations
(cents) (note 4)
– Diluted 205 123
– Basic 208 124
5 Restated for discontinued operations.
SUMMARISED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2014
Audited Audited
Annual Annual
R millions 30 June 2014 30 June 2013
Profit for the year 1 400 1 470
Items that will not be reclassified subsequently to profit or loss:
Effects of remeasurements on retirement benefit obligations (4) -
Other movements 3 -
Items that may be reclassified subsequently to profit or loss:
Effects of cash flow hedges (1) 14
Taxation related to effects of cash flow hedges - (4)
Exchange differences on translating foreign operations 165 190
Total comprehensive income for the year 1 563 1 670
Attributable to:
– Owners of Murray & Roberts Holdings Limited 1 357 1 116
– Non-controlling interests 206 554
1 563 1 670
SUMMARISED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 30 JUNE 2014
Audited Audited6
Annual Annual
R millions 30 June 2014 30 June 2013
ASSETS
Non-current assets 7 323 7 162
Property, plant and equipment 3 248 3 055
Goodwill 486 488
Deferred taxation assets 427 657
Investments in associate companies 24 34
Amounts due from contract customers (note 5) 2 088 2 003
Other non-current assets 1 050 925
Current assets 12 082 15 591
Inventories 326 349
Trade and other receivables 1 766 2 022
Amounts due from contract customers (note 5) 5 684 6 876
Current taxation assets 5 60
Cash and cash equivalents 4 301 6 284
Assets classified as held-for-sale 406 1 774
TOTAL ASSETS 19 811 24 527
EQUITY AND LIABILITIES
Total equity 5 932 8 698
Attributable to owners of Murray & Roberts Holdings Limited 5 905 7 041
Non-controlling interests 27 1 657
Non-current liabilities 1 908 1 958
Long term liabilities8 455 534
Long term provisions 324 239
Deferred taxation liabilities 142 151
Other non-current liabilities 987 1 034
Current liabilities 11 872 13 210
Amounts due to contract customers (note 5) 2 326 3 406
Accounts and other payables 7 392 7 830
Current taxation liabilities 90 545
Bank overdrafts8 24 898
Short term loans8 2 040 531
Liabilities directly associated with assets classified as
held-for-sale 99 661
TOTAL EQUITY AND LIABILITIES 19 811 24 527
6 Restated for adoption of IFRS 11: Joint Arrangements. The results of affected joint ventures are now equity accounted
rather than proportionately consolidated, and the net asset value included under investment in joint ventures.
8 Interest-bearing borrowings.
SUMMARISED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2014
Attributable
to owners of
Murray & Non-
Roberts control-
Stated Other Retained Holdings ling
R millions capital reserves earnings Limited interests Total
Balance at 30 June 2012
(Audited) 2 710 625 2 552 5 887 1 215 7 102
Total comprehensive income
for the year - 112 1 004 1 116 554 1 670
Treasury shares disposed (net) 4 - - 4 - 4
Repayment of non-controlling
interest shareholding - - - - (2) (2)
Net movement in
non-controlling interests
loans - - - - (39) (39)
Issue of shares to
non-controlling interests - - - - 5 5
Recognition of share-based
payment - 48 - 48 - 48
Transfer to retained earnings - (16) 16 - - -
Transfer to non-controlling
interests - (5) - (5) 5 -
Dividends declared and paid9 - - (9) (9) (81) (90)
Balance at 30 June 2013
(Audited) 2 714 764 3 563 7 041 1 657 8 698
Total comprehensive income
for the year - 96 1 261 1 357 206 1 563
Treasury shares acquired (net) (21) - - (21) - (21)
Issue of shares to
non-controlling interests - - - - 6 6
Recognition of share-based
payment - 101 - 101 - 101
Disposal of businesses - (1) - (1) (24) (25)
Transfer to retained earnings - (56) 56 - - -
Transfer to non-controlling
interests - (3) - (3) 3 -
Dividend paid as part of
non-controlling interests
acquisition10 - - - - (394) (394)
Acquisition of existing
non-controlling interests11 - 508 (3 065) (2 557) (1 424) (3 981)
Dividends declared and paid9 - - (12) (12) (3) (15)
Balance at 30 June 2014
(Audited) 2 693 1 409 1 803 5 905 27 5 932
9 Dividends relate to distributions made by entities that hold treasury shares.
10 The dividends paid to non-controlling interests represent the special dividend paid by Clough
as part of the agreement for the acquisition of the Clough non-controlling interests.
11 The premium paid for the non-controlling interests in Clough was recorded as an adjustment against retained earnings in
terms of IFRS 10: Consolidated Financial Statements, due to a controlling interest of 62% held in Clough by the Group
prior to the transaction. Had the Group not held a controlling interest this premium would have been allocated to the
relevant assets and liabilities, based on fair value, with the residual being allocated to goodwill.
SUMMARISED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2014
Audited Audited6
Annual Annual
R millions 30 June 2014 30 June 2013
Cash generated from operations 1 776 2 045
Interest received 169 142
Interest paid (220) (265)
Taxation paid (794) (271)
Operating cash flow 931 1 651
Dividends paid to owners of Murray & Roberts Holdings
Limited (12) (9)
Dividends paid to non-controlling interests (3) (81)
Cash flow from operating activities 916 1 561
Acquisition of business - (84)
Dividends received from associate companies 11 71
Purchase of intangible assets other than goodwill (82) (21)
Purchase of property, plant and equipment by discontinued
operations (24) (42)
Purchase of property, plant and equipment (961) (1 089)
– Replacements (290) (321)
– Additions (671) (768)
Proceeds on disposal of property, plant and equipment 152 129
Proceeds on disposal of businesses (note 7) 1 345 403
Proceeds on disposal of assets held-for-sale 58 143
Advance payment in respect of property disposals - 45
Proceeds on disposal of investment in associate - 1 784
Repayment of investment in associate loan - 4
Cash related to equity accounted joint ventures held-for-sale - (4)
Cash related to disposal of businesses (16) (74)
Cash related to assets held-for-sale 28 (23)
Proceeds from realisation of investment 146 132
Other (net) (3) 3
Cash flow from investing activities 654 1 377
Net increase/(decrease) in borrowings 1 284 (1 189)
Treasury shares (acquisitions)/disposals (net) (21) 4
Proceeds on share issue to non-controlling interests 6 5
Acquisition of Clough non-controlling interests (note 7) (4 395) -
Repayment of non-controlling interest shareholding - (2)
Cash flow from financing activities (3 126) (1 182)
Net (decrease)/increase in cash and cash equivalents (1 556) 1 756
Net cash and cash equivalents at beginning of year 5 386 3 349
Effect of foreign exchange rates 447 281
Net cash and cash equivalents at end of year 4 277 5 386
Net cash and cash equivalents comprises of:
Cash and cash equivalents 4 301 6 284
Bank overdrafts (24) (898)
Net cash and cash equivalents at end of year 4 277 5 386
SUMMARISED CONSOLIDATED SEGMENTAL ANALYSIS
FOR THE YEAR ENDED 30 JUNE 2014
Audited Audited5,6
Annual Annual
R millions 30 June 2014 30 June 2013
Revenue12
Infrastructure & Building 7 176 6 468
Energy & Industrial 4 755 5 036
Underground Mining 6 628 7 904
Oil & Gas 17 480 14 800
Corporate & Properties - 1
Continuing operations 36 039 34 209
Discontinued operations 2 025 5 004
38 064 39 213
Continuing operations
Profit before interest and taxation13
Infrastructure & Building 196 (85)
Energy & Industrial 144 137
Underground Mining 258 318
Oil & Gas14 1 026 1 502
Corporate & Properties (91) (223)
Profit before interest and taxation 1 533 1 649
Net interest expense (58) (117)
Profit before taxation 1 475 1 532
Discontinued operations
Profit before interest and taxation13 580 408
Net interest income/(expense) 7 (6)
Profit before taxation 587 402
12 Revenue is disclosed net of inter-segmental revenue. Inter-segmental revenue for the Group is R69 million
(2013: R169 million).
13 The chief operating decision maker utilises profit/(loss) before interest and taxation in the assessment of a segment’s
performance.
14 Operating profit includes R67 million transaction costs relating to the acquisition of the Clough non-controlling interests.
Prior year operating profit includes R681 million profit on sale of Forge.
SEGMENTAL ASSETS
AT 30 JUNE 2014
Audited Audited6
Annual Annual
R millions 30 June 2014 30 June 2013
Infrastructure & Building15 5 605 6 415
Energy & Industrial 1 701 1 837
Construction Products Africa 249 2 097
Underground Mining 3 111 3 465
Oil & Gas 3 710 3 478
Corporate & Properties 702 234
15 078 17 526
Reconciliation of segmental assets
Total assets 19 811 24 527
Deferred taxation assets (427) (657)
Current taxation assets (5) (60)
Cash and cash equivalents (4 301) (6 284)
15 078 17 526
SEGMENTAL LIABILITIES
AT 30 JUNE 2014
Audited Audited6
Annual Annual
R millions 30 June 2014 30 June 2013
Infrastructure & Building15 4 728 5 171
Energy & Industrial 1 438 1 686
Construction Products Africa 82 775
Underground Mining 1 751 2 136
Oil & Gas 3 649 4 070
Corporate & Properties 1 975 397
13 623 14 235
Reconciliation of segmental liabilites
Total liabilities 13 879 15 829
Deferred taxation liabilities (142) (151)
Current taxation liabilities (90) (545)
Bank overdrafts (24) (898)
13 623 14 235
15 Infrastructure & Building includes amounts for Tolcon that have been classified as discontinued operations in the current year.
NOTES
1. BASIS OF PREPARATION
The Group operates in the construction, engineering and mining environment and as a result the revenue is not seasonal in nature
but is influenced by the nature of the contracts that are currently in progress. Refer to commentary for a more detailed report on
the performance of the different operating platforms within the Group.
The provisional summarised consolidated financial statements for the year ended 30 June 2014 have been prepared in compliance with
the Listings Requirements of the JSE Limited, the framework concepts and the measurement and recognition requirements of
International Financial Reporting Standards (“IFRS”), the requirements of the International Accounting Standards (“IAS”) 34,
Interim Financial Reporting, SAICA Financial Reporting Guidelines as issued by the Accounting Practices Committee and Financial
Pronouncements as issued by the Financial Reporting Standards Council and the Companies Act, No. 71 of 2008. These summarised
consolidated financial statements were compiled under the supervision of Mr AJ Bester (CA) SA, Group financial director and have
been audited in terms of Section 29(1) of the Act.
The accounting policies used in the preparation of these results are in accordance with IFRS and are, with the exception of the
adoption of a new accounting standard, IFRS 11: Joint Arrangements, consistent in all material respects with those used in the
audited annual financial statements for the year ended 30 June 2013. In accordance with IFRS 11, the accounting for certain
affected joint ventures has been changed from the proportionate accounting method to the equity accounting method and certain
comparatives have been restated. The following new and revised Standards and Interpretations have been adopted in the current
year; IAS 19: Employee Benefits, IAS 27: Separate Financial Statements, IAS 28: Investments in Associates and Joint Ventures,
IAS 32: Financial Statements – Presentation, IFRS 7: Financial Instruments – Disclosure, IFRS 10: Consolidated Financial
Statements, IFRS 11: Joint Arrangements, IFRS 12: Disclosure of Interests in Other Entities, IFRS 13: Fair Value Measurement and
certain improvements to IFRS’s 2013.
The external auditors, Deloitte & Touche, have issued their opinion on the Group’s consolidated financial statements for the year
ended 30 June 2014. The audit was conducted in accordance with International Standards on Auditing. The auditor responsible for
the audit is AJ Zoghby. They have issued an unmodified audit opinion on the consolidated financial statements and provisional
summarised consolidated financial statements. These provisional summarised consolidated financial statements have been derived and
are consistent in all material respects with the Group’s consolidated financial statements. A copy of their audit reports on the
consolidated financial statements and the summarised consolidated financial statements are available for inspection at the
Company’s registered office. Any reference to future financial performance included in this announcement has not been audited and
reported on by the Group’s external auditors.
2. PROFIT BEFORE INTEREST AND TAXATION
Prior year profit before interest and taxation includes R681 million profit on sale of Forge.
R millions 30 June 2014 30 June 2013
Items by nature5
Cost of sales (32 383) (31 306)
Distribution and marketing expenses (16) (18)
Administration expenses (2 678) (2 736)
Other operating income 571 1 500
3. PROFIT FROM DISCONTINUED OPERATIONS
The Group disposed of the majority of the businesses (comprising Much Asphalt, Rocla, Ocon Brick and Technicrete) in its
Construction Products Africa platform for a consideration of R1 325 million on 31 October 2013 (effective date). Of the total
consideration, R1 150 million (R1 092 million net of transaction and other costs) was received on the effective date, R75 million
is receivable 12 months after the effective date and R100 million is receivable 24 months after the effective date. The deferred
element of the consideration is subject to certain contractual conditions that need to be met.
The Group disposed of the Hall Longmore business, the only remaining business in the Construction Products Africa platform, on
28 February 2014 (effective date). The business’ property, plant and equipment and inventory were disposed of for a consideration
of R416 million and the working capital is being realised by the Group over a period of time. R265 million (R253 million net of
transaction costs) was received by 30 June 2014.
The Group continues to dispose of its remaining Steel businesses. On 30 June 2014 (effective date) an option to purchase Kosto,
the Mauritian steel operation, was exercised by the purchaser. The option value was R15 million and the proceeds were received in
July 2014.
3.1 Profit from discontinued operations
R millions 30 June 2014 30 June 20135,6
Revenue 2 025 5 004
Profit before interest, depreciation and amortisation 588 480
Depreciation and amortisation (8) (72)
Profit before interest and taxation (note 3.2) 580 408
Net interest income/(expense) 7 (6)
Profit before taxation 587 402
Taxation (165) (101)
Profit after taxation 422 301
Income from equity accounted investments 1 1
Profit from discontinued operations 423 302
Attributable to:
– Owners of Murray & Roberts Holdings Limited 422 290
– Non-controlling interests 1 12
423 302
3.2 Profit before interest and taxation
Profit before interest and taxation includes the following
significant items:
Profit on disposal of businesses (net of transaction and other costs) 539 139
Other impairments (34) (54)
505 85
3.3 Cash flows from discontinued operations include the following:
Cash flow from operating activities (201) 84
Cash flow from investing activities 1 348 384
Cash flow from financing activities 21 (215)
Net increase in cash and cash equivalents 1 168 253
4. RECONCILIATION OF HEADLINE EARNINGS
R millions 30 June 2014 30 June 20135
Profit attributable to owners of Murray & Roberts Holdings
Limited 1 261 1 004
Profit on disposal of businesses (net) (539) (139)
Profit on disposal of associate (net) - (681)
(Profit)/loss on disposal of property, plant and equipment (net) (10) 13
Loss on sale of intangible assets 3 -
Impairment of assets (net) 20 32
Fair value adjustments and net profit on disposal of assets held-for-sale 73 72
Reversal of impairment of associate - (13)
Fair value recognised on associate - (10)
Realisation of foreign currency translation reserve (41) -
Other 1 -
Non-controlling interests effects on adjustments (3) 141
Taxation effects on adjustments 135 346
Headline earnings 900 765
Adjustments for discontinued operations:
Profit from discontinued operations (423) (302)
Non-controlling interests 1 12
Profit on disposal of businesses (net) 539 139
Loss on disposal of property, plant and equipment (net) - (1)
Fair value adjustments and net loss on disposal of assets held-for-sale (73) (72)
Realisation of foreign currency translation reserve 41 -
Non-controlling interests effects on adjustments 1 (1)
Taxation effects on adjustments (139) (35)
Headline earnings from continuing operations 847 505
5. CONTRACTS-IN-PROGRESS AND CONTRACT RECEIVABLES
R millions 30 June 2014 30 June 2013
Contracts-in-progress
(cost incurred plus recognised profits, less recognised losses) 2 691 3 067
Uncertified claims and variations
(recognised in terms of IAS 11: Construction Contracts) 1 550 2 062
Amounts receivable on contracts (net of impairment provisions) 3 286 3 301
Retentions receivable (net of impairment provisions) 245 449
7 772 8 879
Amounts received in excess of work completed (2 326) (3 406)
5 446 5 473
Disclosed as:
Amounts due from contract customers – non-current* 2 088 2 003
Amounts due from contract customers – current 5 684 6 876
Amounts due to contract customers – current (2 326) (3 406)
5 446 5 473
* The non-current amounts are considered by management to be recoverable.
Included in contracts-in-progress is a provision of R300 million raised for the water ingress dispute between the Gauteng Province
and the Bombela Civils Joint Venture Proprietary Limited (“Bombela Civils Joint Venture”) (of which Murray & Roberts has a 45%
shareholding). A panel of technical experts and design consultants were appointed to perform a technical evaluation of the
potential remedial work that may be required. Based on their reports and on an assessment of designs for potential remedial work,
the Company recorded the provision for its share of potential costs to be incurred.
6. CONTINGENT LIABILITIES
Contingent liabilities relate to disputes, claims and legal proceedings in the ordinary course of business. The Group does not
account for any potential contingent liabilities where a back to back arrangement exists with clients or subcontractors, and there
is a legal right to offset.
R millions 30 June 2014 30 June 2013
Operating lease commitments 1 799 1 805
Contingent liabilities 1 508 1 470
Financial institution guarantees 9 805 10 491
In November 2013 an arbitration award was made in favour of the Gauteng Province, in the water ingress dispute between
the Gauteng Province and the Bombela Civils Joint Venture.
The Tribunal ruled that in certain parts of the tunnel the non-compliance with specification could be settled through financial
compensation, and in other parts of the tunnel additional works by the Bombela Civils Joint Venture would be required to meet the
specification. A panel of technical experts and design consultants were appointed to perform a technical evaluation of the
potential remedial work that may be required. Based on their reports and on an assessment of designs for potential remedial work,
the Company recorded a R300 million provision for its share of potential costs to be incurred. The amount of any other potential
financial compensation, if any, related to the matter cannot be determined.
7. BUSINESS DISPOSALS/ACQUISITIONS
The Group disposed of the majority of the businesses (comprising Much Asphalt, Rocla, Ocon Brick and Technicrete) in its
Construction Products Africa platform for a consideration of R1 325 million on 31 October 2013 as well as the Hall Longmore
business for a consideration of R416 million on 28 February 2014. Refer to note 3 for additional information.
Murray & Roberts completed the acquisition of all the non-controlling interests shares in Clough on 11 December 2013 for a
consideration of R4 395 million (including transaction costs). The acquisition was funded through a combination of Clough on-
balance sheet cash of R2 927 million as well as an external bridge facility of R1 468 million.
On 30 June 2014 (effective date) an option to purchase Kosto, the Mauritian steel operation, was exercised by the purchaser. The
value of the option was R15 million and the proceeds were received in July 2014.
8. FAIR VALUE MEASUREMENTS
The fair value adjustment of R234 million, on the investment in the Bombela Concession Company, recognised in the statement of
financial performance was determined by using the risk adjusted discount rate of 19.5% in a free cash flow valuation.
9. DIVIDEND
In terms of the dividend policy the Board has declared a gross annual dividend of 50 cents per share on 27 August 2014. The
Company has sufficient STC credits and consequently no withholding tax will be deducted. The dividend has been declared from
income reserves.
10. RELATED PARTY TRANSACTIONS
There have been no significant changes to the nature of related party transactions since 30 June 2013.
11. EVENTS AFTER REPORTING DATE
The five remaining historical incidents of collusive conduct have been settled with the Competition Commission. A provision was
raised in the prior year with respect to these incidents.
The sale of Tolcon (effective date 1 September 2014) was completed on obtaining Competition Commission approval. The sale
agreement excludes the investments in the Bombela Concession and Bombela Operating Companies and also Chapman’s Peak’s Entilini
Concession and its operating companies – the Group’s Concessions businesses are not part of Tolcon.
The Oil & Gas platform is preparing to extend its engineering service offering globally. In August 2014, Clough completed a
US$5 million strategic acquisition of CH-IV, a boutique engineering company based in the United States of America and
highly regarded in liquefied natural gas (“LNG”) concept, Front End Engineering and Design, detailed design and owner’s
engineering arena, with capabilities across micro, midscale and large scale LNG developments.
In terms of the dividend policy the Board has declared a gross annual dividend of 50 cents per share on 27 August 2014. The
Company has sufficient STC credits and consequently no withholding tax will be deducted. The dividend has been declared from
income reserves.
The directors are not aware of any other matter or circumstance arising since the end of the financial year, not otherwise dealt
with in the Group’s annual financial statements, which significantly affects the financial position at 30 June 2014 or the results
of its operations or cash flows for the year then ended.
Directors:
M Sello* (Chairman)
HJ Laas (Managing and Chief Executive)
DD Barber*
AJ Bester
R Havenstein*
NB Langa-Royds*
JM McMahon1*
WA Nairn*
RT Vice*
Secretary: L Kok
1British *Non-executive
Registered office:
Douglas Roberts Centre,
22 Skeen Boulevard,
Bedfordview
2007.
PO Box 1000
Bedfordview
2008
Registrar:
Link Market Services South Africa Proprietary Limited
13th Floor Rennie House,
19 Ameshoff Street,
Braamfontein
2001.
PO Box 4844
Johannesburg
2000
Sponsor: Deutsche Securities (SA) Proprietary Limited
website: www.murrob.com
mobisite: http://murrob.mobi
e-mail: clientservice.com
Disclaimer:
This announcement includes certain various “forward-looking statements” within the meaning of Section 27A of the US Securities Act
10 1933 and Section 21 E of the Securities Exchange Act of 1934 that reflect the current views or expectations of the Board with
respect to future events and financial and operational performance. All statements other than statements of historical fact are,
or may be deemed to be, forward-looking statements, including, without limitation, those concerning: the Group’s strategy; the
economic outlook for the industry; and the Group’s liquidity and capital resources and expenditure. These forward-looking
statements speak only as of the date of this announcement and are not based on historical facts, but rather reflect the Group’s
current expectations concerning future results and events and generally may be identified by the use of forward-looking words or
phrases such as “believe”, “expect”, “anticipate”, “intend”, “should”, “planned”, “may”, “potential” or similar words and phrases.
The Group undertakes no obligation to update publicly or release any revisions to these forward looking statements to reflect
events or circumstances after the date of this announcement or to reflect the occurrence of any unexpected events. Neither the
content of the Group’s website, nor any website accessible by hyperlinks on the Group’s website is incorporated in, or forms part
of, this announcement.
27 August 2014
Date: 27/08/2014 05:08:00 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.
Sharenet Sites 
