RAUBEX GROUP LIMITED - Audited results for the year ended 28 February 2018

Release Date: 07/05/2018 07:15
Code(s): RBX
 
Wrap Text
Audited results for the year ended 28 February 2018

Raubex Group Limited
(Incorporated in the Republic of South Africa)
Registration number 2006/023666/06
Share Code: RBX
ISIN code: ZAE000093183
("Raubex" or the "Group")

Audited results for the year ended 28 February 2018

Salient features
Revenue down 5,1% to R8,54 billion (2017: R9,01 billion)
Operating profit up 1,5% to R671,9 million (2017: R661,7 million)
HEPS up 13,3% to 228,6 cents per share (2017: 201,7 cents per share)
Cash generated from operations down 15,0% to R1,04 billion (2017: R1,22 billion)
Capex spend of R441,3 million (2017: R440,5 million)
Order book of R8,19 billion (2017: R8,03 billion)
Final dividend of 33 cents per share declared (2017: 45 cents)

Rudolf Fourie, CEO of Raubex Group, said:
"The very challenging market conditions in the South African construction sector required
Raubex to focus on new opportunities to supplement revenue streams and maintain growth.

"Our infrastructure division successfully focused on the affordable housing sector and
opportunities in Africa where our newly established Raubex Renovo secured key contracts.
The acquisition of Westforce in Australia will also assist in diversifying the Group's revenues
and offset the impact of the poor environment locally.

"Looking ahead, more sustained government spending is required to revive the local
construction industry and support the infrastructure required for future economic growth.
In the interim, we will continue to ensure medium-term growth through international
opportunities and the diversified operations of our materials division, which remains the
largest contributor to the Group's profits."

Commentary
Financial overview
Revenue decreased by 5,1% to R8,54 billion while operating profit increased by 1,5% to
R671,9 million compared to the corresponding prior year.

Profit before tax increased by 3,5% to R640,6 million (2017: R619,0 million) with an effective
tax rate of 29,3%.

Group operating profit margin increased to 7,9% (2017: 7,3%).

Earnings per share increased by 14,6% to 233,5 cents with headline earnings per share
increasing by 13,3% to 228,6 cents.

Cash generated from operations decreased by 15,0% to R1,04 billion (2017: R1,22 billion)
before finance charges and taxation.

A non-recurring expense of R119,9 million was included in the prior year results relating to
the Voluntary Rebuilding Programme ("VRP") which arose out of the settlement agreement
with the South African Government as further set out in the SENS announcement dated
11 October 2016. This prior year expense needs to be taken into consideration when
interpreting these operating results.

The Group has experienced a very challenging year in the South African construction
sector and has been operating in an environment that is not conducive to growth. Operating
profit, excluding the non-recurring VRP expense, decreased by 14,0% compared to the
prior year.

Net finance costs decreased to R31,8 million (2017: R43,6 million) due to higher net cash
balances during the year. Total non-cash finance costs increased to R16,3 million (2017:
R11,2 million) for the year which includes R8,8 million relating to unwinding of discount on
the VRP liability.

The Group maintained a strong balance sheet throughout the year with a focus on working
capital management and free cash flow. Trade and other receivables decreased by 3,3% to
R1,57 billion (2017: R1,63 billion) while inventories increased by 11,4% to R665,2 million
(2017: R597,1 million) mainly due to an increase in bitumen stock compared to the prior year.

Construction contracts in progress decreased by 15,9% to R280,9 million (2017:
R334,0 million). This decrease can be attributed to lower operating activity levels in the
construction divisions, particularly in the second half of the year. Trade and other payables
increased by 1,1% to R1,53 billion (2017: R1,51 billion).

Capital expenditure on property, plant and equipment was stable at R441,3 million (2017:
R440,5 million). Net capital expenditure decreased by 1,8% to R345,3 million (2017:
R351,5 million) due to higher proceeds on disposals compared to the prior year.

Borrowings decreased by 18,3% to R776,6 million (2017: R950,8 million) and consist mainly
of instalment sale agreements over plant and equipment, payable in monthly instalments.

The Group had a net cash outflow for the year of R15,3 million and total cash and cash
equivalents at the end of the year of R1,08 billion (2017: R1,10 billion).

Operational overview
Materials Division
The materials division comprises of three main disciplines including (i) commercial quarries
(ii) contract crushing and (iii) materials handling and processing services for the mining
industry.

The materials division is the main contributor to the Group's profit with 54,5% of total
operating profit for the year attributable to this division. The diversified revenue streams
from this division continue to differentiate Raubex from its peers in the construction sector.

During the period under review, the division experienced a slow-down in aggregate sales
at its South African commercial quarry operations, predominantly in the Gauteng region,
while operations in Botswana continued to perform well and exceeded expectations.

Materials handling and processing operations in the mining sector performed consistently
throughout the year.

Contract crushing and plant hire operations remained challenging in line with conditions in
the overall South African construction sector. Due to the challenging conditions in the
construction industry in Namibia, including lower volume of work and clients experiencing
cash flow problems due to payment delays on Namibian government contracts, the Group
took the decision to discontinue the operations of Burma Plant Hire (Namibia) (Pty) Ltd.
Burma Plant Hire (Namibia) (Pty) Ltd reported revenue of R26,0 million and a net loss after
tax of R10,3 million which includes the closure costs of this business.

Revenue for the division increased by 5,9% to R2,58 billion (2017: R2,44 billion) while
operating profit increased by 6,0% to R366,4 million (2017: R345,5 million).

The divisional operating profit margin was stable at 14,2% (2017: 14,2%).

The division incurred capital expenditure of R225,8 million during the year (2017:
R230,1 million).

The division has a secured order book of R1,87 billion (2017: R1,78 billion).

Construction Division
Road surfacing and rehabilitation
This division specialises in the manufacturing and laying of asphalt, chip and spray, surface
dressing, enrichments and slurry seals and includes the operations of Tosas, a company
specialising in the manufacture and distribution of value added bituminous products.

The road surfacing and rehabilitation division executed its order book well throughout the
year but the lower volume of work from SANRAL impacted the division's performance. To
compensate for the lower SANRAL spend, the division focused on rehabilitation and
maintenance contracts on the toll roads operated by concessionaires, with a number of
contract awards supporting the current order book. SANRAL's lower spend has resulted in
increased competition for the limited volume of work available to the rehabilitation and
maintenance teams to tender for and has also resulted in lower volumes of asphalt and
bitumen being supplied to the external market.

Revenue for the division decreased by 9,1% to R3,25 billion (2017: R3,58 billion) and
operating profit decreased by 14,1% to R222,4 million (2017: R258,9 million).

The divisional operating profit margin decreased to 6,8% (2017: 7,2%).

The division incurred capital expenditure of R154,1 million during the year (2017:
R130,1 million).

The division has a secured order book of R1,84 billion (2017: R2,68 billion).

Road construction and earthworks
This division includes the road and civil infrastructure construction operations focused on
the key areas of new road construction and heavy road rehabilitation.

The road construction and earthworks division executed its order book well with some
major contracts substantially completed in the first half of the year, including the N1
Bloemfontein bypass and the two N8 contracts between Bloemfontein and Thaba Nchu.
The division continued to experience tough competitive conditions throughout the year
which have been exacerbated by the lower volume of SANRAL work out to tender.
Although the order book for the division improved during the second half of the year with
the award of contracts for the Bakwena Platinum Corridor Concessionaire, the execution
of this work only commenced in the new financial year. The low order book in the second
half of the year impacted negatively on the results due to excess plant and idle staff being
retained in anticipation of an improvement in the overall conditions in the construction sector.
However, the ability of the division to absorb excess capacity will be dependent on SANRAL
resuming its budget spend in line with historical levels in the year ahead.

Revenue for the division decreased by 7,2% to R1,33 billion (2017: R1,44 billion) with
operating profit decreasing by 38,8% to R67,1 million (2017: R109,6 million).

The divisional operating profit margin decreased to 5,0% (2017: 7,6%).

The division incurred capital expenditure of R29,5 million during the year (2017:
R50,7 million).

The division has a secured order book of R1,85 billion (2017: R2,09 billion).

Raubex Infrastructure
The infrastructure division specialises in disciplines outside of the road construction sector,
including energy (with a specific focus on renewable energy), rail, telecommunications,
pipeline construction and housing infrastructure and commercial building projects.

The roll out of water infrastructure in South Africa continued to be slow during the year,
with extremely competitive tendering conditions experienced for the limited amount of
work available. The Group made the decision to discontinue the operations of L&R Civils
(Pty) Ltd, a company acquired in July 2012 in anticipation of the much needed roll out of
water infrastructure projects in the country. L&R Civils (Pty) Ltd reported revenue of
R36,4 million and a net loss after tax of R29,3 million, which includes the closure costs of
this business.

The Group has also made a decision to discontinue the operations of Strata Civils (Pty) Ltd,
which specialises in small-scale civil infrastructure projects, particularly in urban
environments in the Western and Eastern Cape provinces. This market is not aligned to the
Group's core business and the inability to execute this work profitably has led to the
discontinuation of this business unit. Strata Civils (Pty) Ltd reported revenue of R37,2 million
and a net loss after tax of R17,5 million, which includes the closure costs of this business.

The infrastructure division experienced good growth in the affordable housing sector
throughout the year and has established a strong reputation and client base in the
commercial building sector. The increase in work secured in the building sector has
enabled the division to partially offset the delay in the roll out of projects related to the
Renewable Energy Independent Power Producer Procurement ("REIPPP") Programme. The
division has maintained its capacity in anticipation of the roll out of the REIPPP projects in
the year ahead. REIPPP contracts have not been included in the division's order book.

In order to support growth in the infrastructure division, the Group entered the niche market
of renovating commercial buildings, including shopping malls and hotels, through the
establishment of Raubex Renovo. R827 million of the division's order book is attributable to
Raubex Renovo.

Revenue for the division decreased by 11,6% to R1,38 billion (2017: R1,56 billion) and
operating profit decreased by 76,3% to R16,0 million (2017: R67,5 million).

The divisional operating profit margin decreased to 1,2% (2017: 4,3%).

The division incurred capital expenditure of R31,8 million (2017: R29,6 million).

The division has a secured order book of R2,62 billion (2017: R1,48 billion).

International
The Group has continued to deliver good results from its African operations where a
number of business units are active in Namibia, Botswana and Zambia. Stable conditions
in the mining sector and current commodity prices supported the international operations
in the materials division, particularly in the copper and diamond mining operations in
Namibia. The construction market in Namibia has, however, experienced depressed
conditions during the year which led to the discontinuation of the plant hire business of
Burma Plant Hire (Namibia) (Pty) Ltd, as reported under the materials division.

The completion of the road contract between Rosh Pinah and Oranjemund in Namibia
supported the results in the first half of the year. The road construction and earthworks
division continues to seek high margin replacement work in Africa to supplement the South
African order book.

In Zambia, payments from the Zambian Road Development Agency ("RDA") have not been
consistent during the year and due to the late payment pattern of the client and the amount
of outstanding debt, work on the Link 8000 road contracts remains suspended. The total
gross amount included in accounts receivable due from the RDA at 28 February 2018
amounted to R160,0 million (2017: R154,1 million). Due to the uncertainty regarding the
timing of payment, the gross amount receivable has been discounted to a present value of
R127,1 million during the year. The order book includes an amount of R835,8 million relating
to the two Link 8000 contracts. The Group is confident that the RDA will settle the overdue
amounts, allowing for work to resume, once a viable solution to the funding impasse has
been determined.

In Cameroon, opportunities unlocked through Raubex Renovo are encouraging with the
efficient execution and delivery of a quality product to the client being top priority in the
period ahead while Raubex Renovo establishes itself in this new market. The increase in the
international order book is attributable mainly to work secured by Raubex Renovo, which
includes the construction of a hotel for the French-based Onomo Hotel Group and a
shopping mall for Actis and its local partner, Craft Development, in Douala, Cameroon.

Effective 1 January 2018, Raubex acquired 70% of the Westforce Construction group
("Westforce") based in Perth, Western Australia. Two months of the Westforce operations
are included in these results. Westforce's contribution is reported under the infrastructure
division.

International revenue decreased by 8,5% to R1,11 billion (2017: R1,22 billion) and
operating profit decreased by 13,5% to R188,5 million (2017: R218,0 million).

Operating profit margin decreased to 16,9% (2017: 17,9%).

The international order book has increased to R2,55 billion (2017: R1,90 billion) and is
included in the materials and construction divisions' order books.

Prospects
The Group's secured order book increased to R8,19 billion (2017: R8,03 billion) with 31,1%
of the order book representing contracts outside of South Africa, in the rest of Africa and in
Australia. The order book for SANRAL decreased by 46,8% to R962 million (2017:
R1,81 billion), due to a lack of tenders being released to the market throughout the second
half of the year. Provincial and municipal government order books also decreased by 53,9%
and 11,1% respectively. The decrease in the volume of work for SANRAL as well as for
provincial and municipal clients has been offset by an increase in order book from private
clients, mainly in the affordable housing and commercial building sector, as well as work on
road infrastructure managed by concessionaires.

The diversified operations and revenue streams from the materials division will continue to
support Group earnings and assist in mitigating the challenges faced by the South African
construction sector. The Group will continue to look for acquisition opportunities in the
commercial aggregates sector in southern Africa, with a number of opportunities currently
being considered to further expand the geographical footprint and product range of the
materials division. The acquisition of the Donkerhoek Quarry in Northern Gauteng and
Transkei Quarries in the Eastern Cape's towns of Mthatha and Butterworth post-year-end
support this growth strategy. Materials handling and processing operations, supported by
current commodity prices in the mining sector, are expected to remain stable in the year
ahead.

The delayed roll out of renewable energy projects under the country's REIPPP programme
impacted negatively on the Group's results for the year. Recent developments, including
the Minister of Energy signing the power purchase agreements on 4 April 2018 for 27
REIPPP projects will enable R56 billion of new investment in the South African economy
over the next two to three years. This development is encouraging and the Group is well
positioned to benefit from the roll out of this work. The Group has secured work to the
value of R678 million on two wind farm projects which are subject to financial close. These
projects have not been included in the order book. Growth in the infrastructure division will
further be supported by the recently established Raubex Renovo, which operates in the
niche market of renovating commercial buildings, including shopping malls and hotels. This
business has secured a healthy order book, including international work, for the year ahead
and focus is now on the efficient execution and the delivery of quality work to clients which
could unlock further opportunities in this market.

Internationally, the Group's acquisition of Westforce will further diversify its revenue streams
and allow Raubex to expand its footprint in a more established and growing market in
Western Australia, where conditions in the construction sector are more favourable than the
South African market at present.

Conditions in the South African construction sector are expected to remain challenging and
the short-term outlook uncertain, particularly in the road construction divisions which are
largely dependent on SANRAL. It is imperative that South African state-owned companies,
including SANRAL, as well as provincial and municipal governments, start investing in the
country's deteriorating infrastructure. This will not only alleviate the current pressure in the
construction sector, which has experienced a number of business failures resulting in severe
job losses during the year, but will also better position the country for future economic
growth.

While conditions in the South African construction sector remain subdued, the Group will
focus on maintaining a strong balance sheet and look for medium-term growth from a
combination of high margin opportunities in Africa, increasing activity levels in Australia
through Westforce and further acquisitions in the local commercial aggregate sector to
support the materials division.

Dividend declaration
The directors have declared a gross final cash dividend from income reserves of 33 cents
per share on 7 May 2018 for the year ended 28 February 2018. The salient dates for the
payment of the dividend are as follows:

Last day to trade cum dividend                                Tuesday, 29 May 2018

Commence trading ex dividend                                Wednesday, 30 May 2018

Record date                                                    Friday, 1 June 2018

Payment date                                                   Monday, 4 June 2018

No share certificates may be dematerialised or rematerialised between Wednesday,
30 May 2018 and Friday, 1 June 2018, both dates inclusive.

In terms of dividends tax ("DT"), the following additional information is disclosed:
- The local DT rate is 20%.
- The number of ordinary shares in issue at the date of this declaration is 181 750 036.
- The dividend to utilise for determining the DT due is 33 cents per share.
- The DT amounts to 6,6 cents per share.
- The net local dividend amount is 26,4 cents per share for shareholders liable to pay the DT.
- Raubex Group Limited's income tax reference number is 9370/905/151.

In terms of the DT legislation, the DT amount due will be withheld and paid over to the
South African Revenue Service by a nominee company, stockbroker or Central Security
Depository Participant (collectively "Regulated Intermediary") on behalf of shareholders. All
shareholders should declare their status to their Regulated Intermediary, as they may qualify
for a reduced DT rate or exemption.

Management changes
Due to the growth in the infrastructure division, Dirk Lourens was appointed as divisional
head effective 1 May 2017. Dirk joined the infrastructure division when it was established
in July 2012 and was instrumental in the establishment of Raubex Infra (Pty) Ltd. Prior to
this, Dirk was co-founder of Meyker Construction in 1995, which was later acquired by
Sanyati Construction. Dirk is a professional construction manager registered with
SACPCMP with over 20 years' experience in the construction industry, the majority of
which was gained in supervisory, managerial and executive positions.

Effective 12 March 2018, Izak van Niekerk replaced Tobie Wiese as divisional head of the
materials division. Izak joined Raubex on 1 March 2017 from Bell Equipment where he held
the position of regional general manager. Izak has a Bachelor of Science degree in
Mechanical Engineering from the University of Cape Town, an Honours Bachelor of
Commerce degree from Unisa and an MBA from the Wits Business School.

Tobie Wiese retired from the Group effective 30 April 2018. The board would like to extend
their thanks and appreciation to Tobie for his dedication and service over the past 22 years
at Raubex Group and its subsidiary, B&E International.

Group income statement
                                                                    Audited       Audited
                                                                  12 months     12 months
                                                                28 February   28 February
                                                                       2018          2017
                                                                      R'000         R'000
Revenue                                                           8 542 247     9 005 645
Cost of sales                                                    (7 416 511)   (7 762 882)
Gross profit                                                      1 125 736     1 242 763
Other income                                                         40 133        30 030
Other gains/(losses) - net                                           14 383        (8 319)
Administrative expenses                                            (508 339)     (482 915)
Voluntary Rebuilding Programme expense                                    -      (119 884)
Operating profit                                                    671 913       661 675
Finance income                                                       59 495        57 366
Finance costs                                                       (91 245)     (100 937)
Share of profit of investments accounted
for using the equity method                                             477           855
Profit before income tax                                            640 640       618 959
Income tax expense                                                 (187 956)     (209 105)
Profit for the year                                                 452 684       409 854
Profit for the year attributable to:
Owners of the parent                                                423 573       372 062
Non-controlling interest                                             29 111        37 792
Basic earnings per share (cents)                                      233,5         203,7
Diluted earnings per share (cents)                                    233,5         202,2

Group statement of comprehensive income                        
                                                                    Audited       Audited
                                                                  12 months     12 months
                                                                28 February   28 February
                                                                       2018          2017
                                                                      R'000         R'000
Profit for the year                                                 452 684       409 854
Other comprehensive income for the year, net of tax            
Currency translation differences                                    (14 284)       (8 762)
Actuarial gain on post-employment benefit obligations                   374            70
Total comprehensive income for the year                             438 774       401 162
Comprehensive income for the year attributable to:             
Owners of the parent                                                410 356       363 370
Non-controlling interest                                             28 418        37 792
Total comprehensive income for the year                             438 774       401 162

Calculation of diluted earnings per share
                                                                    Audited       Audited
                                                                  12 months     12 months
                                                                28 February   28 February
                                                                       2018          2017
                                                                      R'000         R'000
Profit attributable to owners of the                          
parent entity                                                       423 573       372 062
Weighted average number of ordinary                           
shares in issue ('000)                                              181 381       182 668
Adjustments for:                                              
Shares deemed issued for no consideration                     
(share options) ('000)                                                    -         1 362
Weighted average number of ordinary shares                    
for diluted earnings per share ('000)                               181 381       184 030
Diluted earnings per share (cents)                                    233,5         202,2

Calculation of headline earnings per share
                                                                    Audited       Audited
                                                                  12 months     12 months
                                                                28 February   28 February
                                                                       2018          2017
                                                                      R'000         R'000
Profit attributable to owners of the parent entity                  423 573       372 062
Adjustments for:                                              
Profit on sale of property, plant and equipment                     (17 392)      (16 092)
Goodwill written off                                                  2 799         7 906
Loss of control of subsidiary                                           767             -
Total tax effects of adjustments                                      4 870         4 506
Basic headline earnings                                             414 617       368 382
Weighted average number of shares ('000)                            181 381       182 668
Headline earnings per share (cents)                                   228,6         201,7
Diluted headline earnings per share (cents)                           228,6         200,2
                                                              
Group statement of financial position
                                                                    Audited       Audited
                                                                  12 months     12 months
                                                                28 February   28 February
                                                                       2018          2017
                                                                      R'000         R'000
ASSETS                                                       
Non-current assets                                           
Property, plant and equipment                                     2 410 165     2 364 319
Intangible assets                                                   947 806       851 102
Investment in associates and joint ventures                         111 789        49 087
Deferred income tax assets                                           39 614        40 938
Non-current inventories                                              64 533        73 459
Non-current trade and other receivables                              81 915       100 557
Total non-current assets                                          3 655 822     3 479 462
Current assets                                                 
Inventories                                                         600 636       523 600
Construction contracts in progress and retentions                   280 933       334 016
Trade and other receivables                                       1 489 575     1 525 373
Current income tax receivable                                        28 617        27 713
Cash and cash equivalents                                         1 084 088     1 103 618
Total current assets                                              3 483 849     3 514 320
Total assets                                                      7 139 671     6 993 782
EQUITY
Share capital                                                         1 817         1 817
Share premium                                                     2 059 688     2 059 688
Treasury shares                                                      (1 218)      (23 664)
Other reserves                                                   (1 219 859)   (1 179 094)
Retained earnings                                                 3 200 300     2 938 678
Equity attributable to owners of the parent                       4 040 728     3 797 425
Non-controlling interest                                            157 240       152 300
Total equity                                                      4 197 968     3 949 725
LIABILITIES
Non-current liabilities
Borrowings                                                          411 284       562 573
Provisions for liabilities and charges                               82 780        74 838
Deferred income tax liabilities                                     342 036       311 608
Other financial liabilities                                          86 980       150 120
Total non-current liabilities                                       923 080     1 099 139
Current liabilities
Trade and other payables                                          1 530 581     1 514 324
Borrowings                                                          365 272       388 227
Current income tax liabilities                                       31 680        25 120
Provisions for liabilities and charges                               15 823             -
Other financial liabilities                                          75 267        17 247
Total current liabilities                                         2 018 623     1 944 918
Total liabilities                                                 2 941 703     3 044 057
Total equity and liabilities                                      7 139 671     6 993 782

Group statement of cash flows
                                                                    Audited       Audited
                                                                  12 months     12 months
                                                                28 February   28 February
                                                                       2018          2017
                                                                      R'000         R'000
Cash flows from operating activities
Cash generated from operations                                    1 039 786     1 223 840
Interest received                                                    59 495        57 366
Interest paid                                                       (74 908)      (89 776)
Income tax paid                                                    (177 950)     (206 977)
Net cash generated from operating activities                        846 423       984 453
Cash flows from investing activities
Purchases of property, plant and equipment                         (441 286)     (440 512)
Proceeds from sale of property, plant and equipment                  95 960        88 986
Acquisition of subsidiaries                                         (81 737)      (26 148)
Loan (granted to)/repayment from associates
and joint ventures                                                  (37 698)        2 450
Net cash used in investing activities                              (464 761)     (375 224)
Cash flows from financing activities
Proceeds from borrowings                                            360 921       377 903
Repayment of borrowings                                            (542 815)     (534 194)
Dividends paid to owners of the parent                             (163 513)     (160 087)
Dividends paid to non-controlling interests                         (14 855)      (14 256)
Disposal of interest in a subsidiary                                  4 423           510
Acquisition of interest in a subsidiary                             (41 185)            -
Contingent consideration settled                                          -       (20 989)
Share buy-back transaction                                                -      (120 000)
Sale of treasury shares                                                  14            13
Net cash used in financing activities                              (397 010)     (471 100)
Net (decrease)/increase in cash and cash equivalents                (15 348)      138 129
Cash and cash equivalents at the beginning of the year            1 103 618       969 736
Effects of exchange rates on cash and cash equivalents               (4 182)       (4 247)
Cash and cash equivalents at the end of the year                  1 084 088     1 103 618

Group statement of changes in equity
                                         Share          Share      Treasury         Other
                                       capital        premium        shares      reserves
                                         R'000          R'000         R'000         R'000
Balance at 1 March 2016                  1 892      2 179 613       (46 599)   (1 148 951)
Share option reserve                         -              -             -         9 541
Share buy-back                             (75)      (119 925)            -             -
Treasury shares issued in terms                                               
of equity-settled share option                                                
scheme                                       -              -        22 935             -
Share option reserve utilised                                                 
during the year                              -              -             -       (30 922)
Disposal of interest to                                                       
non-controlling interest                     -              -             -             -
Total comprehensive income                                                    
for the year                                 -              -             -        (8 762)
Dividends paid                               -              -             -             -
Balance at 28 February 2017              1 817      2 059 688       (23 664)   (1 179 094)
Treasury shares issued in terms                                               
of equity-settled share option                                                
scheme                                       -              -        22 446             -
Share option reserve utilised                                                 
during the year                              -              -             -       (27 175)
Non-controlling interest arising                                              
on business combination                      -              -             -             -
Disposal of interest to                                                                
non-controlling interest                     -              -             -             -
Loss of control of subsidiary                -              -             -             -
Acquisition of non-controlling                                                         
interest                                     -              -             -             -
Profit for the year                          -              -             -             -
Other comprehensive                                                           
income for the year                          -              -             -       (13 590)
Dividends paid                               -              -             -             -
Balance at 28 February 2018              1 817      2 059 688        (1 218)   (1 219 859)

                                                        Total   
                                                 attributable   
                                                 to owners of          Non-    
                                      Retained     the parent   controlling         Total
                                      earnings        company      interest        equity
                                         R'000          R'000         R'000         R'000
Balance at 1 March 2016              2 718 123      3 704 078       128 764     3 832 842
Share option reserve                         -          9 541             -         9 541
Share buy-back                               -       (120 000)            -      (120 000)
Treasury shares issued in terms                                                
of equity-settled share option                                                 
scheme                                 (22 922)            13             -            13
Share option reserve utilised                                                  
during the year                         30 922              -             -             -
Disposal of interest to                                                        
non-controlling interest                   510            510             -           510
Total comprehensive income                                                     
for the year                           372 132        363 370        37 792       401 162
Dividends paid                        (160 087)      (160 087)      (14 256)     (174 343)
Balance at 28 February 2017          2 938 678      3 797 425       152 300     3 949 725
Treasury shares issued in terms                                                
of equity-settled share option                                                 
scheme                                 (22 432)            14             -            14
Share option reserve utilised                                                  
during the year                         27 175              -             -             -
Non-controlling interest arising                                               
on business combination                      -              -        17 109        17 109
Disposal of interest to                                                        
non-controlling interest                 4 036          4 036           387         4 423
Loss of control of subsidiary                -              -           (25)          (25)
Acquisition of non-controlling                                                 
interest                                (7 591)        (7 591)      (26 094)      (33 685)
Profit for the year                    423 573        423 573        29 111       452 684
Other comprehensive                                                            
income for the year                        374        (13 216)         (693)      (13 909)
Dividends paid                        (163 513)      (163 513)      (14 855)     (178 368)
Balance at 28 February 2018          3 200 300      4 040 728       157 240     4 197 968

Group segmental analysis
                                                                       Road          Road
                                                                  surfacing  construction
                                                                and rehabi-           and
                                                    Materials      litation    earthworks
                                                        R'000         R'000         R'000
Operating segments                               
28 February 2018                                 
Segment revenue                                     2 583 677     3 250 728     1 332 325
Operating profit                                      366 428       222 399        67 063
Margin                                                  14,2%          6,8%          5,0%
28 February 2017                                 
Segment revenue                                     2 439 016     3 575 199     1 435 421
Operating profit                                      345 532       258 872       109 633
Margin                                                  14,2%          7,2%          7,6%
                                                 
                                                       Infra-                    Consoli-
                                                    structure         Other*        dated
                                                        R'000         R'000         R'000
Operating segments                               
28 February 2018                                 
Segment revenue                                     1 375 517             -     8 542 247
Operating profit                                       16 023             -       671 913
Margin                                                   1,2%             -          7,9%
28 February 2017                                                        
Segment revenue                                     1 556 009             -     9 005 645
Operating profit                                       67 522      (119 884)      661 675
Margin                                                   4,3%             -          7,3%
                                                  
                                                       Inter-                    Consoli-
                                         Local       national         Other*        dated
                                         R'000          R'000         R'000         R'000
Geographical information                          
28 February 2018                                  
Segment revenue                      7 429 769      1 112 478             -     8 542 247
Operating profit                       483 463        188 450             -       671 913
Margin                                    6,5%          16,9%             -          7,9%
28 February 2017                                  
Segment revenue                      7 790 122      1 215 523             -     9 005 645
Operating profit                       563 602        217 957      (119 884)      661 675
Margin                                    7,2%          17,9%             -          7,3%
* Other consists of the Voluntary Rebuilding Programme expense.

Employee benefit expense
                                                                    Audited       Audited
                                                                  12 months     12 months
                                                                28 February   28 February
                                                                       2018          2017
                                                                      R'000         R'000
Employee benefit expense in the income
statement consists of:
Salaries, wages and contributions                                 2 173 553     2 113 760
Share options granted to employees                                        -         9 541
Total employee benefit expense                                    2 173 553     2 123 301

Capital expenditure and depreciation
                                                                    Audited       Audited
                                                                  12 months     12 months
                                                                28 February   28 February
                                                                       2018          2017
                                                                      R'000         R'000
Capital expenditure for the year                                    441 286       440 512
Depreciation for the year                                           357 280       373 230
Amortisation of intangible assets for the year                        4 077         1 433

Notes
Basis of preparation
The summary consolidated financial statements are prepared in accordance with the
requirements of the JSE Limited Listings Requirements for abridged reports, and the
requirements of the Companies Act (2008) applicable to summary financial statements.
The Listings Requirements require abridged reports to be prepared in accordance with the
framework concepts and the measurement and recognition requirements of International
Financial Reporting Standards ("IFRS") and the SAICA Financial Reporting Guides as issued
by the Accounting Practices Committee and Financial Pronouncements as issued by the
Financial Reporting Standards Council and to also, as a minimum, contain the information
required by IAS 34: Interim Financial Reporting. The accounting policies applied in the
preparation of the consolidated financial statements from which the summary consolidated
financial statements were derived are in terms of International Financial Reporting Standards
and are consistent with those accounting policies applied in the preparation of the previous
consolidated annual financial statements.

These summary consolidated financial statements for the year ended 28 February 2018
have been prepared under the supervision of the Financial Director, Mr JF Gibson CA(SA)
and audited by PricewaterhouseCoopers Inc., who expressed an unmodified opinion
thereon. The auditor also expressed an unmodified opinion on the annual financial
statements from which these summary consolidated financial statements were derived. A
copy of the auditor's report on the summary consolidated financial statements and of the
auditor's report on the annual consolidated financial statements are available for inspection
at the company's registered office.

The auditor's report does not necessarily report on all of the information contained in this
announcement. Any reference to pro forma or future financial information included in this
announcement has not been reviewed or reported on by the auditors. Shareholders are
advised that in order to obtain a full understanding of the nature of the auditors'
engagement they should obtain a copy of that report together with the accompanying
financial information from the company's registered office.

Treasury shares
During the year 1 292 196 treasury shares were utilised to settle share options that vested
in terms of the employee share option scheme for an amount of R22,5 million. The related
weighted average share price at the time of exercise was R17,37. The weighted average
share price of the remaining treasury shares held is R17,37.

Analysis of movement in treasury shares:
                                                                     Number         Value
                                                                  of shares         R'000
At 1 March 2016                                                   2 682 662        46 599
Treasury shares issued in terms of equity-settled                                 
share option scheme                                              (1 320 328)      (22 935)
Total treasury shares held by Raubex (Pty) Ltd                                    
at 28 February 2017                                               1 362 334        23 664
Treasury shares issued in terms of equity-settled                                 
share option scheme                                              (1 292 196)      (22 446)
Total treasury shares held by Raubex (Pty) Ltd                                    
at 28 February 2018                                                  70 138         1 218

Business combinations
Acquisitions made during the period
Lime Sales Ltd ("Lime Sales")
On 1 March 2017, the Group effectively acquired 74% of the shares of Lime Sales for a
purchase price of R37 million settled in cash. Lime Sales is a commercial quarry operating
in the Western Cape that produces metallurgical dolomite, agricultural lime and aggregates.

Details of the net assets acquired, purchase consideration and goodwill are set out below:

                                                                                    R'000
Consideration
Cash                                                                               33 000
Deferred consideration*                                                             4 000
Total consideration                                                                37 000
Recognised amounts of identifiable assets
and acquired liabilities assumed
Property, plant and equipment                                                      14 015
Intangible asset - mining right                                                    17 450
Inventories                                                                         6 564
Trade receivables                                                                     443
Current income tax receivable                                                         338
Cash and cash equivalents                                                             111
Other financial assets                                                                  7
Deferred tax liability                                                             (9 973)
Trade and other payables                                                             (118)
Rehabilitation provision                                                           (1 686)
Total identified net assets                                                        27 151
Non-controlling interest                                                           (7 059)
Goodwill attributable to owners of the parent                                      16 908
Total                                                                              37 000
Purchase consideration settled in cash                                             33 000
Less: Cash and cash equivalents in the business
combination acquired                                                                 (111)
Cash outflow on acquisition for cash flow statement                                32 889
* The deferred consideration is an amount of R4 million payable to the previous shareholders
  of Lime Sales once transfer of the mining right into the name of the Group has been
  successfully completed. The deferred consideration is included in the cost of the business
  combination at the fair value date of the acquisition. Subsequently the deferred
  consideration is measured at amortised cost. However, the effect of discounting is deemed
  to be immaterial as the Group expects to pay this amount before the end of the 2019
  financial year.

The revenue included in the consolidated income statement since 1 March 2017
contributed by Lime Sales was R54,7 million with a net profit contribution of R5,6 million
over the same period.

MRCN (Pty) Ltd t/a Westforce Construction and Westforce Hire (Pty) Ltd ("Westforce")
On 1 January 2018, the Group effectively acquired 70% of the shares of Westforce for a
purchase price of AUD6,1 million (R66,2 million) settled in cash. A further AUD0,35 million
(R3,8 million) was paid to acquire 70% of the vendor loan accounts. Westforce was
established in 2006 as a civil engineering contractor and has grown and diversified into a
multi-disciplined contractor providing services to the power, water, defence, transport,
industrial and mining sectors across Western Australia. The purchase price is contingent on
Westforce achieving its profit forecast for the period ended 30 June 2018.

The goodwill is attributable to the geographical location of the operations together with the
local market knowledge and experience held by the current management team.

Details of the net assets acquired, purchase consideration and goodwill are set out below:

                                                                                    R'000
Consideration
Cash                                                                               66 238
Total consideration                                                                66 238
Recognised amounts of identifiable assets and                                  
acquired liabilities assumed                                                   
Property, plant and equipment                                                      37 425
Construction contracts in progress                                                  3 976
Trade and other receivables                                                        27 220
Cash and cash equivalents                                                          17 390
Intangible - customer relationships                                                 3 763
Borrowings                                                                        (17 956)
Deferred tax liability                                                             (5 129)
Income tax payable                                                                 (8 609)
Trade and other payables                                                          (24 582)
Total identifiable net assets                                                      33 498
Non-controlling interest                                                          (10 049)
Goodwill attributable to owners of the parent                                      42 789
Total                                                                              66 238
Purchase consideration settled in cash                                             66 238
Less: Cash and cash equivalents in the business                                
combination acquired                                                              (17 390)
Cash outflow on acquisition for cash flow statement                                48 848

The revenue included in the consolidated income statement since 1 January 2018
contributed by Westforce was R44,4 million with a net profit contribution of R4,4 million
over the same period. Had Westforce been consolidated from 1 March 2017, the
contributed revenue and net profit would have been R280,2 million and R9,2 million,
respectively.

Transactions with non-controlling interests
Raubex Infra (Pty) Ltd ("Raubex Infra")
On 1 March 2017, the Group acquired the remaining 30% of the issued share capital from
the non-controlling shareholders of Raubex Infra for R33,7 million, increasing the Group's
shareholding from 70% to 100%.

Burma Plant Hire (Pty) Ltd ("Burma")
Effective 1 December 2017, the Group acquired the remaining 30% of the issued share
capital from the non-controlling shareholder of Burma Plant Hire together with the
outstanding loans owed, for R7,5 million, increasing the Group's shareholding from 70%
to 100%.

Events after the reporting period
Business acquisitions
Donkerhoek Quarry (Pty) Ltd ("Donkerhoek")
Effective 18 April 2018, the Group effectively acquired 70% of Donkerhoek Quarry, through
its subsidiary Raumix Aggregates (Pty) Ltd, for a purchase price of R31,1 million settled in
cash. Donkerhoek Quarry is a commercial quarry operating in Northern Gauteng supplying
aggregates to the construction market. The acquisition is in line with the Group's strategy
to expand its commercial quarry business geographically.

Metadynamics (Pty) Ltd ("Metadynamics")
Effective 1 March 2018, the Group effectively acquired 49% of Metadynamics, through its
subsidiary OMV (Pty) Ltd who acquired 70% of the shareholding for a purchase price of
R18,2 million settled in cash. An additional consideration is payable contingent on certain
profit outcomes over the course of the next four years, being 1 March 2018 to 28 February
2022. Metadynamics produces value added gypsum and various other products through
calcining and milling processes in Gauteng. The acquisition is in line with the Group's
strategy to expand geographically and also provides an opportunity to diversify its
product mix.

Transkei Quarries (Pty) Ltd ("Transkei Quarries")
Effective 3 April 2018, the Group effectively acquired 49% of Transkei Quarries, through its
subsidiary Raumix Aggregates (Pty) Ltd, for a purchase price of R49 million settled in cash.
An additional consideration is payable contingent on certain profit outcomes over the course
of the next four years, being 1 March 2018 to 28 February 2022. Transkei Quarries operates
two commercial quarries in Mthatha and Butterworth supplying aggregates to the
construction market. The acquisition is in line with the Group's strategy to expand its
commercial quarry business geographically.

On behalf of the board
F Kenney
Chairman

RJ Fourie
Chief Executive Officer

JF Gibson
Financial Director

7 May 2018

Company information
Directors
RJ Fourie
JF Gibson
NF Msiza
F Kenney#
LA Maxwell*
BH Kent*
SR Bogatsu*
# Non-executive
* Independent non-executive

Company secretary
GM Chemaly

Registered office
Building No 1
The Highgrove Office Park
50 Tegel Avenue
Centurion
South Africa

Transfer secretaries
Computershare Investor Services (Pty) Ltd
Rosebank Towers
15 Biermann Avenue
Rosebank
2196

Auditors
PricewaterhouseCoopers Inc.

Sponsor
Investec Bank Limited
www.raubex.com

Contacts
Raubex Group
Rudolf Fourie
+27 (0) 51 406 2000

James Gibson
+27 (0) 12 648 9400

Instinctif Partners
+27 (0) 11 447 3030

Frédéric Cornet
+27 (0) 83 307 8286
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