MURRAY & ROBERTS HOLDINGS LIMITED - Audited annual provisional results for the 12 months ended 30 June 2018

Release Date: 29/08/2018 16:15
Code(s): MUR
 
Wrap Text
Audited annual provisional results for the 12 months ended 30 June 2018

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")

ENGINEERED EXCELLENCE

AUDITED ANNUAL PROVISIONAL RESULTS FOR THE 12 MONTHS ENDED 30 JUNE 2018      

Salient features
- R21,8 billion 
  Revenue from continuing operations, increased by 2% (FY2017: R21,4 billion) 
- R267 million 
  Attributable earnings increased by 456% (FY2017: R48 million)
- 50 cents 
  Gross annual dividend increased by 11% to 50 cents per ordinary share (FY2017: 45 cents)
- 112 cents 
  Diluted continuing HEPS, increased by 56% (FY2017: 72 cents)
- R2 billion 
  Cash, net of debt, increased by 11% (30 June 2017: R1,8 billion)
- R30,1 billion 
  Order book for continuingoperations increased by 12%(30 June 2017: R26,9 billion)

- Good results were reported by the Underground Mining platform, the largest contributor to Group 
  earnings in the year. Strong platform order book of R22,1 billion (30 June 2017:R 17,5 billion)
- The Oil & Gas platform maintained earnings and secured significant projects in complementary markets 
  in Australia and Mongolia, thereby increasing its order book to R6,4 billion (30 June 2017:R 5,2 billion)
- Robust balance sheet and strong net cash position
- Lost time injury frequency rate ("LTIFR") deteriorated to 0.86 (FY2017: 0.52). Regrettably, one fatal
  incident occurred
- Independent Board's view of fair price range for control of Murray & Roberts is between R20.00 to 
  R22.00 per ordinary share.

STAKEHOLDER REPORT FOR THE YEAR ENDED 30 JUNE 2018#

Enhancement of the Group's strategic positioning and earnings potential
The Group's New Strategic Future, which the board of directors of Murray & Roberts ("Board") approved in
2014, has by design brought about a significant change in Murray & Roberts. The Group has transformed from 
being a predominantly South African civil and building contractor, to a multinational engineering and 
construction Group focused on the natural resources market sectors.

The progress made over the recent past years in de-risking the Group, refining its business model and
optimising its portfolio of businesses has allowed focus to shift towards enhancement of the strategic 
positioning and earnings potential of the Group's three business platforms for the longer term. The evolution 
of the Group's strategy in anticipation and response to market dynamics, specifically the cyclicality of the 
natural resources market sectors in which the Group operates, has provided a clear roadmap for shareholder 
value growth in the years ahead. 

This is the first completed financial year of a fundamentally redesigned Murray & Roberts. Earlier in the
year, an independent assessment of the Group's New Strategic Future was commissioned to consider the long-term
viability of the Group's strategic direction. The assessment confirmed the Group's strategic plan and clarified 
the growth priorities for the three business platforms, in support of the Group's market leadership and 
performance aspirations as set out in the Group's Vision statement.

Offer to acquire Murray & Roberts by ATON GmbH ("ATON")
Murray & Roberts' strategic direction and portfolio of businesses have made it an attractive investment.
During the financial year an offer was made by ATON to procure control of Murray & Roberts, through its 
formal offer to the remaining shareholders to acquire all their shares in Murray & Roberts at R15 per share. 
An independent committee of the Board was constituted to respond to the ATON offer ("Independent Board"), and
recommended that shareholders reject the offer as it was below the fair price range for control, which was 
considered to be in the range of R20 to R22 per share, as determined by the Independent Board. 

ATON increased its investment in the Group to some 44% from around 30%. Exceeding 35% triggered the Companies Act
requirement to make a mandatory offer to all shareholders. This offer was made on 2 July 2018 at R17 per 
share, subject to certain conditions. The offer will remain open to shareholders for acceptance for no 
less than 10 business days after the offer is declared unconditional in all respects.

The Group's strategic aspirations and ATON's investment objectives in relation to Murray & Roberts are not
aligned. This has resulted in the Group's aspirations, which includes making strategic acquisitions and repurchasing
its own shares, being impeded. The Group remains open to engage with ATON to clarify its intentions with 
Murray & Roberts and to seek alignment on the Group's strategic direction.

Potential transaction with Aveng
The potential combination of Murray & Roberts and Aveng, an opportunity which the Group was considering
since the fourth quarter of 2017, was announced in May 2018. The proposed combination of Murray & Roberts' 
Oil & Gas and Underground Mining platforms with Aveng's McConnell Dowell (infrastructure) and Moolmans 
(mining) businesses was compelling and would have established Murray & Roberts as a significant 
multinational engineering and construction group. 

The Group obtained the requisite approvals from the Takeover Regulation Panel and our shareholders to further
develop this transaction. The Takeover Special Committee then overturned the Takeover Regulation Panel
approval and ruled that Murray & Roberts may not develop the potential transaction whilst the ATON mandatory
offer remains in place. 

As part of Aveng's recent rights offer, ATON acquired 25.42% of Aveng's equity, thereby
establishing negative control of Aveng. ATON was not supportive of the combination of Murray & Roberts 
and Aveng, and with its shareholding in Aveng it has the ability to block any such combination.

Following these developments, the Murray & Roberts Board withdrew from the potential Aveng transaction in
early August 2018.

FINANCIAL REPORT
FINANCIAL RESULTS
Revenue from continuing operations increased by 2% to R21,8 billion (FY2017: R21,4 billion) and attributable
earnings increased by 456% to R267 million (FY2017: R48 million). Diluted continuing headline earnings per
share ("HEPS") increased by 56% to 112 cents (FY2017: 72 cents). Cash, net of debt, increased to R2 billion 
(30 June 2017: R1,8 billion). 

Capital expenditure for continuing operations for the year was R436 million (FY2017: R511 million) of which
R358 million (FY2017: R395 million) was for expansion and R78 million (FY2017: R116 million) for replacement.
The order book for continuing operations increased by 12% to R30,1 billion (30 June 2017: R26,9 billion). 

The high effective taxation rate of 36% (FY2017: 36%) is due to profits earned in higher tax jurisdictions,
foreign withholding taxes and losses incurred in the Middle East, a tax free jurisdiction.

The Group continues to focus on cost reduction and operational excellence to improve profitability.

Dividend
Considering the Group's strong cash position, the Board resolved to increase the gross annual dividend 
to 50 cents per ordinary share (FY2017: 45 cents). The dividend will be subject to the dividend tax rate 
of 20%, which will result in a net dividend of 40 cents per share to those shareholders who are not 
exempt from paying tax on dividends. The dividend has been declared out of income reserves. 

The number of shares in issue as at the date of this declaration is 444 736 118 and the Company's tax
reference number is 9000203712.
The relevant dates are:

Event                                                  Date                         
Last day to trade (cum-dividend)                       Tuesday, 2 October 2018      
Shares to commence trading (ex-dividend)               Wednesday, 3 October 2018    
Record date (date shareholders recorded in books)      Friday, 5 October 2018       
Payment date                                           Monday, 8 October 2018       

No share certificates may be dematerialised or rematerialised between Wednesday, 3 October 2018 and 
Friday, 5 October 2018, both dates inclusive.

On Monday, 8 October 2018, the dividend will be electronically transferred to the bank accounts of all
certificated shareholders where this facility is available. No dividend will be paid to shareholders who 
have not provided their banking details to the transfer secretaries: Link Market Services South Africa 
Proprietary Limited. Accordingly, the cash dividend will remain unpaid until such time as the non-compliant 
shareholder has provided relevant banking details to the transfer secretary. No interest will be paid on 
unpaid dividends.

Shareholders who hold their shares in dematerialised form will have their accounts held by the Central
Securities Depository Participant or broker credited on Monday, 8 October 2018.


OPERATIONAL REPORT
Order Book, Near Orders and Project Pipeline

                                                                Pipeline
                                         Order       Near           
R billions                               book      orders      Category 1      Category 2      Category 3
Oil & Gas                                 6,4           -            39,7            97,8           368,4    
Underground Mining                       22,1         7,9            19,4            19,8            17,4    
Power & Water                             1,5           -             4,7             8,3            31,6    
Middle East*                              0,1           -               -               -               -    
30 June 2018 totals                      30,1         7,9            63,8           125,9           417,4    
30 June 2017 totals**                    27,0         7,0            38,4            61,5           539,7    

- Near orders: Tenders where the Group is the preferred bidder and final award is subject to
  financial/commercial close - there is more than a 95% chance that these orders will be secured
- Category 1: Tenders submitted or tenders the Group is currently working on (excluding near orders) -
  projects developed by clients to the stage where firm bids are being obtained - chance of being secured 
  as firm orders a function of final client approval as well as bid win probability
- Category 2: Budgets, feasibilities and prequalification the Group is currently working on - project planning
  underway, not at a stage yet where projects are ready for tender
- Category 3: Opportunities which are being tracked and are expected to come to the market in the next 
  36 months - identified opportunities that are likely to be implemented, but still in pre-feasibility stage
*  Middle East projects substantially completed.
** Including continuing and discontinued operations. Discontinued includes Genrec.

Oil & Gas Platform
                                                  Global        Commissioning      Corporate
R millions     Engineering    Construction        Marine        & maintenance       & other           Total
June           2018    2017    2018    2017    2018    2017     2018     2017    2018    2017    2018     2017    
Revenue         971   1 297     504      30       -     425    6 894    4 862     173     100   8 542    6 714    
Operating                                                                                      
profit/(loss)    77      28       4     (52)    (26)     71      466      576    (312)   (406)    209      217    
Margin (%)       8%      2%      1%   (173%)      -     17%       7%      12%       -       -      2%       3%    
Order book      639     492   3 552   1 070       -       -    2 245    3 589       -       -   6 436    5 151    
Segment                                                                                                           
assets                                                                                          2 808    2 528      
Segment                                                                                        
liabilities                                                                                     2 334    1 978    
LTIFR                                                                                          
(fatalities)                                                                                   0.14(0)  0.25(0)    

Revenue increased to R8,5 billion (FY2017: R6,7 billion), primarily due to scope growth on the Ichthys and
Wheatstone projects. In a competitive market with extreme pressure on margins, operating profit came in at 
R209 million (FY2017: R217 million) notwithstanding the increase in revenue. The order book increased to 
R6,4 billion (30 June 2017: R5,2 billion), comprising a diverse portfolio of new work, mainly in 
complementary markets. Meaningful growth off this low base is expected as market confidence gradually 
returns and global energy producers start investing in new projects.

The crude oil price has stabilised above US$70 per barrel and global Liquid Natural Gas ("LNG") markets are
expected to remain in oversupply until 2021. Currently, there is limited immediate opportunity for new LNG 
developments in Australia. However, new supply capacity must be developed in the near term to meet LNG 
forecast demand as from 2021/22. The platform is targeting potential LNG projects in Australia, Canada, 
Mozambique and Papua New Guinea.

The hook-up and commissioning ("HUC") works for the Chevron-operated Wheatstone project were extended during
FY2018, with successful close-out in June 2018. Strong execution continued on the central processing facility
and floating production, storage and offloading facility for the INPEX-operated Ichthys LNG project. Projects
are expected to extend into the first half of FY2019 as Ichthys moves towards first gas.

Considering the soft oil and gas market, Clough has extended their services into complementary growth
markets such as Australia's metals & minerals and infrastructure markets. In FY2018, the platform secured
significant projects with BHP and Alcoa in Australia and with Rio Tinto in Mongolia. These projects confirm 
the platform's ability to secure projects in complementary markets, due to its large project execution 
capability.

Extending the platform's service offering to complementary markets with active investment programmes 
is critical for growing earnings and mitigating exposure to the cyclicality of the resources sector. 
The capital expenditure on infrastructure in Australia is forecast to be more than 10 times the oil and 
gas spend over the next five years (a funded project portfolio of A$370 billion over the next 10 years). 
An office has been established in Sydney, to pursue these opportunities on a selective basis.

The platform's international operations outside Australasia comprise small niche engineering and consulting
businesses. Progress is being made with a potential acquisition of a relatively small oil and gas engineering
and construction company in the USA, which will enable the platform to extend its services to the growing oil 
and gas sector in the USA. 

Underground Mining Platform

R millions                         Africa             Australasia         The Americas               Total                    
June                          2018       2017       2018      2017       2018       2017        2018      2017    
Revenue                      3 524      3 565      1 779     1 727      2 701      2 754       8 004     8 046    
Operating profit               215        124        109       217        147        123         471       464    
Margin (%)                      6%         3%         6%       13%         5%         4%          6%        6%    
Order book                  10 738     11 021      4 799     3 117      6 533      3 368      22 070    17 506    
Segment assets                 879      1 139      1 167       982      1 711      1 494       3 757     3 615    
Segment liabilities          1 007      1 093        484       377        504        439       1 995     1 909    
LTIFR (fatalities)          1.75(0)    1.15(0)    1.49(1)   0.96(0)     3.0(0)    1.97(0)     1.89(1)   1.23(0)    

Revenue and operating profit came in at R8,0 billion (FY2017: R8,0 billion) and R471 million 
(FY2017: R464 million) respectively. Excellent performance by Cementation Africa, was largely offset by a 
decline in margins in Australasia as a result of the non-extension of a contract on a major project.
The platform order book increased to R22,1 billion (30 June 2017: R17,5 billion), with project awards 
across all jurisdictions during the second half of the year. 

The financial performance was impacted by mining companies continuing to focus on cash preservation, 
which limited the number of new mine project opportunities. This result was largely underpinned by the 
platform's success in securing ongoing infrastructure replacement and development projects (a function 
of 'stay-in-business' capital spending by mining companies), as well as contributions from contract 
mining work.

Recently completed and current projects include the construction or rehabilitation of 20 vertical shafts 
and some 30 decline shaft projects in Australia, Canada, Indonesia, Mongolia, South Africa, USA and Zambia. 
The platform has contract mining projects in Australia, Canada, Indonesia, South Africa and the USA and 
is pursuing new contract mining opportunities primarily in South Africa and the USA.

Competitive advantage is gained through the collaboration between Group companies. RUC Cementation Mining in
joint venture with Clough from the Group's Oil & Gas platform were supported by Cementation Canada and Murray
& Roberts Cementation in the recent award of the 1 000m deep twin shafts at Rio Tinto's Oyu Tolgoi copper
mine in Mongolia.

Exploration is at its highest level in six years and mining equipment delivery times are extending. These
key lead indicators suggest that the industry has moved into an upturn. In countries and regions where current
mining activity is high, there is a large investment pipeline of underground mining projects which is expected
to expand. The platform is well positioned to take advantage of these opportunities and most key commodities
are represented in the current portfolio of projects.

Power & Water Platform
                                                              Electrical &     Corporate &
R millions        Power1           Water       Oil & Gas     Instrumentation      other            Total
June           2018     2017   2018    2017   2018    2017    2018    2017    2018    2017     2018       2017    
Revenue       4 180    5 063     95      56    412     669     138     106       4      14    4 829      5 908    
Operating                                                                    
profit/(loss)   287      243     (8)    (20)   (87)      5      32      35     (90)    (92)     134        171    
Margin (%)       7%       5%    (8%)   (36%)  (21%)     1%     23%     33%       -       -       3%         3%    
Order book    1 278    3 198      -       -    188     483      13      26       -       -    1 479      3 707    
Segment                                                                      
assets                                                                                        1 292      1 527    
Segment                                                                      
liabilities                                                                                     956      1 341    
LTIFR                                                                        
(fatalities)                                                                                 0.12(0)    0.43(0)    
1 Including power programme contracts.

Revenue, operating profit and the order book decreased to R4,8 billion (FY2017: R5,9 billion), R134 million
(FY2017: R171 million) and R1,5 billion (30 June 2017: R3,7 billion) respectively. This overall reduction 
is due to the phased completion of the Medupi and Kusile mega projects, which for the last seven years 
underpinned the platform's financial performance.

In anticipation of the completion of Medupi and Kusile, the platform's overhead function was restructured to
prepare it for a lower revenue base, without compromising its capacity to deliver on its strategic objectives
and to pursue new work. 

The power sector in South Africa is presenting limited opportunity and the Baseload Coal Independent Power 
Producer Procurement Programme continues to be delayed. In response to the limited opportunities in the power 
plant Engineering, Procurement and Construction ("EPC") sector, the platform is proactively targeting the 
broader power sector by pursuing power plant repair and maintenance work in South Africa and high voltage 
transmission and distribution projects in South Africa and sub-Saharan Africa.

In the complementary oil and gas market, the primary focus is to support Sasol's operations at Secunda with
structural, mechanical and piping construction services. The successful completion of an EPC fuel storage
project in Takoradi Port, Ghana, has created opportunities in refined products storage facilities. During the
year, Murray & Roberts Ghana Limited obtained its petroleum commission licence, which will provide access to
projects in Ghana's developing upstream sector.

Murray & Roberts Water is in its sixth year of operation but remains sub-scale, although it is well
positioned to service the water and wastewater treatment sector. During the year, an Organica Water Reclamation
Demonstration Plant was erected and commissioned at the Verulam Wastewater Treatment Plant, to showcase this
innovative technology. As growth in the water sector is expected to flow from the wastewater treatment sub-sector, 
it is expected that this technology could bring the necessary scale to this business. During the year the
Aquamarine business performed well with supply of containerised water treatment plants to hospitals, industrial 
and agricultural users specifically in response to the water crisis in the Western Cape.

Investments
Murray & Roberts increased its investment in the Bombela Concession Company to 50%, by acquiring an
additional 17% during the first half of the year. This investment yields strong cash returns and the fair 
value adjustment for the year increased to R278 million (FY2017: R253 million). The prior period included a 
profit of R166 million in the Bombela Civils Joint Venture, following the Gautrain dispute resolution. 
Income from equity accounted investments increased to R21 million (FY2017: R7 million), largely from the 
Group's minority shareholding in the Bombela Operating Company which was sold in the current financial year. 

The Group continues to explore similar opportunities that could secure project work for its three business
platforms.
R millions                              Bombela investments            Middle East                 Total
June                                     2018         2017         2018         2017         2018         2017    
Revenue                                     -          121          468          608          468          729    
Operating profit/(loss)                   277          419          (34)        (568)         243         (149)    
Margin (%)                                  -         346%          (7%)        (93%)         52%         (20%)   
Order book                                  -            -          141          500          141          500    
Segment assets                          1 379        1 643        1 682        1 124        3 061        2 767    
Segment liabilities                        36          178        1 290        1 350        1 326        1 528    

Middle East Business 
In FY2016 the Board decided to close the business in the Middle East as part of the Group's strategic
decision to exit the civil engineering and building market. Current year losses in the Middle East of R34 million
(FY2017: R568 million) relate to overhead costs and legal fees associated with the Dubai Airport claim.
All projects are substantially completed and are expected to be handed over by December 2018. The arbitration
ruling for the Dubai Airport claim has been delayed to no later than 4 November 2018.

Discontinued Operations
                          I&B businesses            Clough                 Genrec
R millions                  and other2            Properties            Engineering                Total
June                     2018         2017      2018      2017        2018       2017        2018         2017    
Revenue                   269        3 364         3         7         253        303         525        3 674    
Operating loss           (143)        (209)       (2)       (4)       (128)       (68)       (273)        (281)    
2 Includes Construction Products Africa.

The loss from discontinued operations for the year was R278 million (FY2017: R253 million). This includes an
operating loss of R128 million incurred by Genrec, prior to its disposal on 1 May 2018. The balance of the
loss includes a R141 million reduction on retained assets and liabilities associated with the disposal of the
Infrastructure & Building business in FY2017, mainly due to an unfavourable claim settlement.

HEALTH AND SAFETY 
The Board deeply regrets the passing away of Hendry Munardi (49), a RUC Cementation (Australia) employee, on 
17 October 2017. Hendry passed on due to asphyxiation while performing his duties at the Big Gossan mine 
in Freeport (Indonesia). 

The Group's LTIFR, which remains industry leading, deteriorated to 0.86 (FY2017: 0.52). 
The Oil & Gas platform reported LTIFR of 0.14 (FY2017: 0.25), the Underground Mining platform reported 
1.89 (FY2017: 1.23) and the Power & Water platform reported 0.12 (FY2017: 0.43)

The Group is encouraged by the positive trends noted in a number of areas of its safety programme, 
including improvements on many of the lead indicators and record safety performances by a number of 
its businesses.

UPDATE ON THE GROUP'S CLAIMS PROCESSES
Uncertified revenue as at the end of the financial year increased to R1,3 billion (FY2017: R0,9 billion),
largely represented by claims on projects in the Middle East and the remainder in the Power & Water platform. 

GRAYSTON PEDESTRIAN BRIDGE TEMPORARY WORKS COLLAPSE - UPDATE
The Department of Labour instituted a Section 32 Inquiry ("Inquiry") in November 2015 into this incident to
determine the cause or causes of the collapse of the temporary works structure. The Board would welcome an
expeditious conclusion to this Inquiry.

PROSPECTS STATEMENT
Considering current market expectations, the Group is confident that its growth plans for the next
three-year planning period are achievable. Cost management will continue to be a focus and all platforms 
are targeting levels of overhead costs of about 6% of revenue, through the commodity cycle.

Each of the Group's three business platforms are at different stages in their strategic development and they
continue to diversify their specialist service offerings, to increase growth and margin opportunity and to
mitigate risk across different international regions and phases of the project life cycle.

With a well-refined business model and strategy, and a focused portfolio of quality business assets, the
Group is committed to drive sustainable growth and earnings improvement. The Group's robust financial 
position provides the capacity to support its growth plans.

Any forward-looking information contained in this announcement has not been reviewed and reported on by the
Group's external auditors.

On behalf of the directors:
Suresh Kana                  Henry Laas                   Daniel Grobler
Chairman of the Board        Group Chief Executive        Group Financial Director

Bedfordview
29 August 2018

RESPONSIBILITY STATEMENT
The Board accepts responsibility for the information contained in this announcement and certifies that, 
to the best of their knowledge and belief, the information contained in this announcement is true and 
nothing has been omitted which is likely to affect the importance of the information. 

Registered office:            Registrar:
Douglas Roberts Centre,       Link Market Services South Africa
22 Skeen Boulevard,           Proprietary Limited
Bedfordview 2007              13th Floor, Rennie House,
                              19 Ameshoff Street, 
                              Braamfontein, 2001
                              
PO Box 1000                   PO Box 4844
Bedfordview 2008              Johannesburg 2000

Sponsor
Deutsche Securities (SA) Proprietary Limited

Website:
www.murrob.com             

E-mail:
clientservice@murrob.com 

Murray & Roberts Holdings Limited Registration No.
1948/029826/06

Directors:
SP Kana* (Chairman) HJ Laas (Managing & Chief Executive) DF Grobler R Havenstein* 
NB Langa-Royds* AK Maditsi* E Mashilwane* XH Mkhwanazi* DC McCann (Radley)* KW Spence*^ 

Secretary:
L Kok

^ Australian
* Independent non-executive 
# The operating performance information disclosed has been extracted from the Group's operational 
  reporting systems. 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 the year 
  ended, 30 June 2017.

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.


SUMMARISED CONSOLIDATED STATEMENT OF FINANCIAL PERFORMANCE 
for the year ended 30 June 2018
                                                                                        Audited        Audited     
                                                                                         Annual         Annual     
                                                                                        30 June        30 June     
R millions                                                                                 2018           2017    
Continuing operations                                                                                             
Revenue                                                                                  21 847         21 397    
- Continuing operations excluding Middle East                                            21 379         20 789    
- Middle East                                                                               468            608    
Profit before interest, depreciation and amortisation                                     1 331            963    
Depreciation                                                                               (429)          (431)    
Amortisation of intangible assets                                                           (38)           (45)    
Profit before interest and taxation (note 2)                                                864            487    
- Continuing operations excluding Middle East                                               898          1 055    
- Middle East                                                                               (34)          (568)    
Net interest expense                                                                        (41)           (42)    
Profit before taxation                                                                      823            445    
Taxation                                                                                   (298)          (161)    
Profit after taxation                                                                       525            284    
Income from equity accounted investments                                                     21              7    
Profit from continuing operations                                                           546            291    
Loss from discontinued operations (note 3)                                                 (278)          (253)    
Profit for the year                                                                         268             38    
Attributable to:                                                                                                  
- Owners of Murray & Roberts Holdings Limited                                               267             48    
- Non-controlling interests                                                                   1           (10)    
                                                                                            268             38    
Earnings per share from continuing and discontinued operations (cents)                                            
- Diluted                                                                                    66             12    
- Basic                                                                                      67             12    
Earnings per share from continuing operations (cents)                                                             
- Diluted                                                                                   134             74    
- Basic                                                                                     137             76    
Supplementary information                                                                                         
Net asset value per share (Rands)                                                            15             15    
Dividends per share (cents)                                                                  50             45    
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                   (5)           (30)    
Less: Weighted average number of shares held by the Letsema BBBEE trusts                (31 696)       (31 697)    
Less: Weighted average number of shares held by the subsidiary companies                (14 893)       (15 373)    
Weighted average number of shares used for basic per share calculation                  398 142        397 636    
Add: Dilutive adjustment                                                                  7 803          8 013    
Weighted average number of shares used for diluted per share calculation                405 945        405 649    
Earnings per share from continuing operations (cents)                                                             
- Diluted                                                                                   134             74    
- Adjusted diluted earnings per share excluding Middle East                                 142            214    
- Diluted earnings per share contributed by Middle East                                      (8)          (140)    
- Basic                                                                                     137             76    
- Adjusted basic earnings per share excluding Middle East                                   145            218    
- Basic earnings per share contributed by Middle East                                        (8)          (142)    
Headline earnings per share from continuing and discontinued operations        
(cents) (note 4)                                                               
- Diluted                                                                                    46             26    
- Basic                                                                                      47             27    
Headline earnings per share from continuing operations (cents) (note 4)                                           
- Diluted                                                                                   112             72    
- Adjusted diluted headline earnings per share excluding Middle East                        120            212    
- Diluted headline earnings per share contributed by Middle East                             (8)          (140)    
- Basic                                                                                     114             74    
- Adjusted basic headline earnings per share excluding Middle East                          122            216    
- Basic headline earnings per share contributed by Middle East                               (8)          (142)    
                                                                                                                  

SUMMARISED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 30 June 2018
                                                                                        Audited        Audited     
                                                                                         Annual         Annual     
                                                                                        30 June        30 June     
R millions                                                                                 2018           2017    
Profit for the year                                                                         268             38    
Items that will not be reclassified subsequently to profit or loss:                                               
Effects of remeasurements on retirement benefit obligations                                   3             (5)    
Items that will be reclassified subsequently to profit or loss:                                                    
Exchange gains/(losses) on translating foreign operations and realisation of reserve         96           (488)    
Total comprehensive income/(loss) for the year                                              367           (455)    
Attributable to:                                                                                                   
- Owners of Murray & Roberts Holdings Limited                                               363           (421)    
- Non-controlling interests                                                                   4            (34)    
                                                                                            367           (455)    

SUMMARISED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
at 30 June 2018
                                                                                        Audited        Audited     
                                                                                         Annual         Annual     
                                                                                        30 June        30 June     
R millions                                                                                 2018           2017    
ASSETS                                                                                                            
Non-current assets                                                                        5 253          5 049    
Property, plant and equipment                                                             1 996          2 058    
Investment property                                                                           -             19    
Goodwill (note 5)                                                                           616            607    
Deferred taxation assets                                                                    385            585    
Investments in associate companies                                                            3              8    
Investment in joint venture                                                                  72             73    
Amounts due from contract customers (note 6)                                                568            542    
Other non-current assets                                                                  1 613          1 157    
Current assets                                                                            8 982          8 757    
Inventories                                                                                 279            280    
Trade and other receivables                                                               1 076          1 167    
Amounts due from contract customers (note 6)                                              5 089          4 914    
Current taxation assets                                                                      74             23    
Derivative financial instruments                                                              -              2    
Cash and cash equivalents                                                                 2 464          2 371    
Assets classified as held for sale                                                           51            397    
Total assets                                                                             14 286         14 203    
EQUITY AND LIABILITIES                                                                                            
Total equity                                                                              6 744          6 605    
Attributable to owners of Murray & Roberts Holdings Limited                               6 696          6 541    
Non-controlling interests                                                                    48             64    
Non-current liabilities                                                                     505            665    
Long term liabilities3                                                                      147            220    
Long term provisions                                                                        126            145    
Deferred taxation liabilities                                                                75            121    
Other non-current liabilities                                                               157            179    
Current liabilities                                                                       7 037          6 791    
Amounts due to contract customers (note 6)                                                1 527          1 571    
Accounts and other payables                                                               5 102          4 819    
Current taxation liabilities                                                                 63             39    
Bank overdrafts3                                                                            111            118    
Short term loans3                                                                           234            244    
Liabilities classified as held for sale                                                       -            142    
Total equity and liabilities                                                             14 286         14 203    
3 Interest-bearing borrowings.                                                                                    


SUMMARISED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 30 June 2018                                 
                                                                           Attributable               
                                                                              to owners               
                                                                              of Murray                 
                                                                              & Roberts          Non-              
                                            Stated      Other   Retained       Holdings   controlling    Total       
R millions                                 capital   reserves   earnings        Limited     interests   equity   
Balance at 30 June 2016 (Audited)            2 552      1 538      3 111          7 201            63    7 264    
Total comprehensive (loss)/income         
for the year                                     -       (469)        48           (421)          (35)    (456)    
Treasury shares disposed (net)                  14          -          -             14             -       14    
Recognition of share-based payment               -         33          -             33             -       33    
Utilisation of share-based                
payment reserve                                  -        (55)         -            (55)            -      (55)    
Transfer to retained earnings                    -        (26)        26              -             -        -    
Realisation of non-controlling interests         -        (24)       (12)           (36)           36        -    
Dividends declared and paid4                     -          -         (8)            (8)            -       (8)    
Dividends declared and paid to owners of                                                               
Murray & Roberts Holdings Limited                -          -       (187)          (187)            -     (187)    
Balance at 30 June 2017 (Audited)            2 566        997      2 978          6 541            64    6 605    
Total comprehensive income for the year          -         96        267            363             4      367    
Treasury shares disposed (net)                  25          -          -             25             -       25    
Recognition of share-based payment               -         22          -             22             -       22    
Utilisation of share-based                
payment reserve                                  -        (55)         -            (55)            -      (55)    
Transfer to retained earnings                    -         (1)         1              -             -        -    
Repayment of equity loans from                                                                         
non-controlling interests                        -          -          -              -           (20)     (20)    
Dividends declared and paid4                     -          -        (14)           (14)            -      (14)    
Dividends declared and paid to owners of                                                               
Murray & Roberts Holdings Limited                -          -       (186)          (186)            -     (186)    
Balance at 30 June 2018 (Audited)            2 591      1 059      3 046          6 696            48    6 744    
4 Dividends relate to distributions made by entities that hold treasury shares.


SUMMARISED CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 30 June 2018
                                                                                        Audited        Audited     
                                                                                         Annual         Annual     
                                                                                        30 June        30 June     
R millions                                                                                 2018           2017    
Cash generated by operations                                                                934          1 055    
Interest received                                                                            66             88    
Interest paid                                                                              (112)          (138)    
Taxation paid                                                                              (174)          (210)    
Operating cash flow                                                                         714            795    
Dividends paid to owners of Murray & Roberts Holdings Limited                              (200)          (194)    
Net cash inflow from operating activities                                                   514            601    
Dividends received from associate companies                                                  20             19    
Investment in joint venture held for sale                                                     -             (2)    
Purchase of intangible assets other than goodwill                                           (13)           (24)    
Purchase of property, plant and equipment by entities classified as held for sale            (1)           (53)    
Purchase of property, plant and equipment                                                  (311)          (264)    
- Replacements                                                                              (78)          (116)    
- Expansions                                                                               (358)          (395)    
- Capitalised finance leases raised (non-cash)                                              125            247    
Proceeds on disposal of property, plant and equipment                                       116             45    
Net inflow/(outflow) on disposal of business                                                 40           (323)    
Proceeds on disposal of intangible assets other than goodwill                                 -              7    
Proceeds on disposal of investment in associate                                              87              -    
Proceeds on disposal of assets held for sale                                                  -             37    
Cash related to assets held for sale                                                          2            259    
Proceeds from realisation of investment                                                     220            170    
Purchase of additional investment                                                          (358)             -    
Other (net)                                                                                  (2)             2    
Net cash outflow from investing activities                                                 (200)          (127)    
Net movement in borrowings                                                                 (217)          (661)    
Net acquisition of treasury shares                                                          (29)           (41)    
Net cash outflow from financing activities                                                 (246)          (702)    
Total increase/(decrease) in net cash and cash equivalents                                   68           (228)    
Net cash and cash equivalents at beginning of year                                        2 253          2 737    
Effect of foreign exchange rates                                                             32           (256)    
Net cash and cash equivalents at end of year                                              2 353          2 253    
Net cash and cash equivalents comprises:                                                                          
Cash and cash equivalents                                                                 2 464          2 371    
Bank overdrafts                                                                            (111)          (118)    
Net cash and cash equivalents at end of year                                              2 353          2 253    
                                                                                     
                                                                                     
SUMMARISED CONSOLIDATED SEGMENTAL ANALYSIS                                           
for the year ended 30 June 2018                                                      
                                                                                        Audited        Audited     
                                                                                         Annual         Annual     
                                                                                        30 June        30 June     
R millions                                                                                 2018           2017    
Revenue5                                                                                                          
Bombela & Middle East                                                                       468            729    
Power & Water                                                                             4 829          5 908    
Underground Mining                                                                        8 004          8 046    
Oil & Gas                                                                                 8 542          6 714    
Corporate & Properties                                                                        4              -    
Continuing operations                                                                    21 847         21 397    
Discontinued operations                                                                     525          3 674    
                                                                                         22 372         25 071    
Continuing operations                                                                                             
Profit/(loss) before interest and taxation6                                                                       
Bombela & Middle East                                                                       243           (149)    
Power & Water                                                                               134            171    
Underground Mining                                                                          471            464    
Oil & Gas                                                                                   209            217    
Corporate & Properties                                                                     (193)          (216)    
Profit before interest and taxation                                                         864            487    
Net interest expense                                                                        (41)           (42)    
Profit before taxation                                                                      823            445    
Discontinued operations                                                                                           
Loss before interest and taxation6                                                         (273)          (281)    
Net interest expense                                                                         (5)            (9)    
Loss before taxation                                                                       (278)          (290)    
5 Revenue is disclosed net of inter-segmental revenue. Inter-segmental revenue for the Group is R126 million 
  (FY2017: R70 million).                                   
6 The chief operating decision maker utilises profit/(loss) before interest and taxation in the assessment 
  of a segment's performance.                                  


SEGMENTAL ASSETS (CONTINUING & DISCONTINUED) 
at 30 June 2018 
                                                                                        Audited        Audited     
                                                                                         Annual         Annual     
                                                                                        30 June        30 June     
R millions                                                                                 2018           2017    
Bombela & Middle East7                                                                    3 061          2 767    
Power & Water7                                                                            1 292          1 527    
Underground Mining                                                                        3 757          3 615    
Oil & Gas                                                                                 2 808          2 528    
Corporate & Properties7/8                                                                   324            412    
Continuing operations                                                                    11 242         10 849    
Discontinued operations9                                                                    121            375    
                                                                                         11 363         11 224    
Reconciliation of segmental assets                                                                                
Total assets                                                                             14 286         14 203    
Deferred taxation assets                                                                   (385)          (585)    
Current taxation assets                                                                     (74)           (23)    
Cash and cash equivalents                                                                (2 464)        (2 371)    
                                                                                         11 363         11 224    

SEGMENTAL LIABILITIES (CONTINUING & DISCONTINUED)
at 30 June 2018 

                                                                                        Audited        Audited     
                                                                                         Annual         Annual     
                                                                                        30 June        30 June     
R millions                                                                                 2018           2017    
Bombela & Middle East7                                                                    1 326          1 528    
Power & Water7                                                                              956          1 341    
Underground Mining                                                                        1 995          1 909    
Oil & Gas                                                                                 2 334          1 978    
Corporate & Properties8                                                                     460            422    
Continuing operations                                                                     7 071          7 178    
Discontinued operations9                                                                    222            142    
                                                                                          7 293          7 320    
Reconciliation of segmental liabilities                                                                           
Total liabilities                                                                         7 542          7 598    
Deferred taxation liabilities                                                               (75)          (121)    
Current taxation liabilities                                                                (63)           (39)    
Bank overdrafts                                                                            (111)          (118)    
                                                                                          7 293          7 320    
7 Adjustment of the 2017 figure to exclude the discontinued operations.                                  
8 Corporate segmental assets and liabilities include the inter-segment eliminations of group balances 
  and transactions.                                  
9 Discontinued operations include Genrec operations and the retained assets and liabilities of the Southern African 
  Infrastructure & Building businesses that were sold during the current and prior financial years.

NOTES
1. BASIS OF PREPARATION
The Group operates in the mining, oil & gas and power & water markets 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 2018 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 minimum
requirements of the International Accounting Standards ("IAS") 34, Interim Financial Reporting, SAICA Financial
Reporting Guidelines as issued by the Accounting Practices Committee and the Financial Pronouncements as issued 
by the Financial Reporting Standards Council and the Companies Act, No. 71 of 2008 ("Act"). These provisional
summarised consolidated financial statements and full set of consolidated financial statements were compiled under
the supervision of DF Grobler (CA)SA, Group financial director and have been audited in terms of Section 29(1)
of the Act and signed by the directors on 29 August 2018.

The accounting policies and methods of computation used in the preparation of these results are in
accordance with IFRS and are consistent in all material respects with those used in the audited consolidated 
financial statements for the year ended 30 June 2017. There have been no new Standards and Interpretations 
applied in the current financial year.

The external auditors, Deloitte & Touche, have issued their opinion on the Group's consolidated financial
statements for the year ended 30 June 2018. The audit was conducted in accordance with International Standards
on Auditing. The auditor responsible for the audit is G Berry. 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. Copies of their audit reports on the consolidated
financial statements and on these provisional 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. The auditor's report does not
necessarily report on all of the information contained in this announcement. Shareholders are therefore
advised that in order to obtain a full understanding of the nature of the auditor's engagement they should 
obtain a copy of that report together with the accompanying financial information from the issuer's registered 
office.

The information presented in the notes below represent audited results for the years ended 30 June 2017 and
for 30 June 2018.

2. PROFIT BEFORE INTEREST AND TAXATION
                                                                                        30 June        30 June     
R millions                                                                                 2018           2017    
Items by function                                                                                                 
Cost of sales                                                                           (19 597)       (19 552)    
Distribution and marketing expenses                                                         (13)           (11)    
Administration costs                                                                     (1 984)        (2 104)    
Other operating income                                                                      611            757    

3. LOSS FROM DISCONTINUED OPERATIONS
Discontinued operations include Genrec operations and the retained assets and liabilities of the Southern African 
Infrastructure & Building businesses that were sold during the current and prior financial years. These operations 
met the requirements in terms of IFRS 5 Discontinued Operations and have been presented as discontinued operations 
in the Group's statement of financial performance.

3.1 LOSS FROM DISCONTINUED OPERATIONS
                                                                                        30 June        30 June     
R millions                                                                                 2018           2017    
Revenue                                                                                     525          3 674    
Loss before interest, depreciation and amortisation                                        (273)          (279)    
Depreciation and amortisation                                                                 -             (2)    
Loss before interest and taxation (note 3.2)                                               (273)          (281)    
Net interest expense                                                                         (5)            (9)    
Loss before taxation                                                                       (278)          (290)    
Taxation credit                                                                               -             37    
Loss after taxation                                                                        (278)          (253)    
Income from equity accounted investments                                                      -              -    
Loss from discontinued operations                                                          (278)          (253)    
Attributable to:                                                                                                  
- Owners of Murray & Roberts Holdings Limited                                              (278)          (253)    
- Non-controlling interests                                                                   -              -    
                                                                                           (278)          (253)    

3.2 LOSS BEFORE INTEREST AND TAXATION
                                                                                        30 June        30 June     
R millions                                                                                 2018           2017    
Loss before interest and taxation includes the following significant items:                                       
Loss on disposal of businesses (net of transaction and other costs)                           -            (28)    
Fair value adjustment on disposal group held for sale                                       (13)           (96)    
Voluntary Rebuild Programme charge                                                            -           (170)    

3.3 CASH FLOWS FROM DISCONTINUED OPERATIONS INCLUDE THE FOLLOWING:

                                                                                        30 June        30 June     
R millions                                                                                 2018           2017    
Cash flow from operating activities                                                        (172)          (110)    
Cash flow from investing activities                                                          40            (78)    
Cash flow from financing activities                                                          (2)            25    
Net decrease in cash and cash equivalents                                                  (134)          (163)    

4. RECONCILIATION OF HEADLINE EARNINGS
                                                                                        30 June        30 June     
R millions                                                                                 2018           2017    
Profit attributable to owners of Murray & Roberts Holdings Limited                          267             48    
Loss on disposal of businesses (net)                                                          -             28    
Profit on disposal of property, plant and equipment (net)                                   (13)           (30)    
Profit on disposal of investment in associate                                               (80)             -    
Profit on sale of assets held for sale (net)                                                  -            (17)    
Impairment of assets (net)                                                                    -             11    
Reversal of impairment of property, plant and equipment (net)                                (2)            (1)    
Fair value adjustment on disposal group classified as held for sale                          13             96    
Fair value adjustments on investment property                                                 -             (7)    
Taxation effects on adjustments                                                               3            (22)    
Headline earnings                                                                           188            106    
Adjustments for discontinued operations:                                                                          
Loss from discontinued operations                                                           278            253    
Loss on disposal of businesses (net)                                                          -            (28)    
Profit on disposal of property, plant and equipment (net)                                     -              8    
Profit on sale of assets held for sale (net)                                                  -             17    
Fair value adjustment on disposal group classified as held for sale                         (13)           (96)    
Fair value adjustments on investment property                                                 -              7    
Taxation effects on adjustments                                                               -             26    
Headline earnings from continuing operations                                                453            293    

5. GOODWILL
                                                                                        30 June        30 June     
R millions                                                                                 2018           2017    
At beginning of year                                                                        607            642    
Foreign exchange movements                                                                    9            (35)    
                                                                                            616            607    

The Group tests goodwill annually for impairment or more frequently if there are indications that goodwill
might be impaired. Based on the assessment performed as at 30 June 2018, no impairment was recorded.

6. CONTRACTS-IN-PROGRESS AND CONTRACT RECEIVABLES
                                                                                        30 June        30 June     
R millions                                                                                 2018           2017    
Contracts-in-progress (cost incurred plus recognised profits,                                       
less recognised losses)                                                                   1 796          1 903       
Uncertified claims and variations less payments received on                                         
account of R288 million (FY2017: R445 million) (recognised in                                       
terms of IAS 11: Construction Contracts)                                                  1 292            914      
Amounts receivable on contracts (net of impairment provisions)                            2 386          2 343    
Retentions receivable (net of impairment provisions)                                        183            296    
                                                                                          5 657          5 456    
Amounts received in excess of work completed                                             (1 527)        (1 571)    
                                                                                          4 130          3 885    
Disclosed as:                                                                                                     
Amounts due from contract customers - non-current10                                         568            542    
Amounts due from contract customers - current                                             5 089          4 914    
Amounts due to contract customers - current                                              (1 527)        (1 571)    
                                                                                          4 130          3 885    
10 The non-current amounts are considered by management to be recoverable.

7. FINANCIAL INSTRUMENTS
The Group's financial instruments consist mainly of deposits with banks, local money market instruments,
short-term investments, accounts receivable and payable and interest-bearing borrowings.

                                                                                        30 June        30 June     
R millions                                                                                 2018           2017    
Categories of financial instruments                                                                               
Financial assets                                                                                                  
Financial assets designated as fair value through profit or loss (level 3)                1 308            893    
Loans and receivables                                                                     6 094          6 109    
Available-for-sale financial assets carried at fair value (level 1)                           -              -    
Derivative financial instruments (level 2)                                                    -              2    
Financial liabilities                                                                                             
Loans and payables11                                                                      4 746          4 528    
11 The prior year amounts reflected in financial liabilities have been adjusted due to the incorrect 
   inclusion of provisions.

7.1 FINANCIAL ASSETS DESIGNATED AS FAIR VALUE THROUGH PROFIT OR LOSS
                                                                                        30 June        30 June     
R millions                                                                                 2018           2017    
Investment in infrastructure service concession (level 3)12                                                       
At beginning of year                                                                        893            811    
Additions                                                                                   357              -    
Realisation of investment                                                                  (220)          (170)    
Fair value adjustment recognised in the statement of financial performance                  278            252    
                                                                                          1 308            893    
12 The Group concluded the acquisition of a further 17% in the Bombela Concession Company (RF) Proprietary 
   Limited ("BCC") for an adjusted purchase price of R357 million in December 2017 (original purchase price 
   of R405 million adjusted for dividends declared and interest from 1 October 2017). The Group's investment 
   in BCC has therefore increased to 50%. Post the transaction, the investment is still reflected at fair 
   value through profit or loss, as the investment meets the requirement of IAS 28.18 with regards to venture 
   capital organisations or similar entities, as the transaction does not result in a change of control.

   The fair value of BCC is calculated using discounted cash flow models and a market discount rate of 18.5% 
   (FY2017: 18.5%). The discounted cash flow models are based on forecast patronage, operating costs, 
   inflation and other economic fundamentals, taking into consideration the operating conditions experienced 
   in the current financial year. The future profits from the concession are governed by a contractual 
   agreement and are principally based on inflationary increases in the patronage revenue and operating 
   costs of the current financial year.                                 

   A once off fair value gain of R50 million (FY2017: R100 million) was recognised following an amendment 
   in the operating company fee structure due to a non-recurring event in each of the respective years 
   which has resulted in a reduction of the fee payable to the operator. The reduction in the operator 
   fee is a cost input in the fair value model which resulted in a corresponding increase in the fair 
   value of the investment.                                

   Operating cost includes an operating fee that is payable to the Bombela Operating Company Proprietary 
   Limited ("BOC"), the company responsible for the operation and maintenance of the Gautrain. The fee 
   payable to BOC is subject to annual inflationary increases. The contract is subject to review every 
   fifth year where increases of more than inflation are considered. An annual operating fee increase 
   of 1% above inflation will result in a decrease in the value of the concession investment of 
   approximately R9,0 million (FY2017: R17,7 million).                                

   Operating cost also includes a Railway Usage Fee ("RUF") which constitutes a fee for the use of the 
   system owned by Gauteng province. The fee is 50% of the concessionaires excess free cash flow above 
   a 18% real rate of return. The fee reduces to 35% should the concessionaire comply with certain 
   Socio Economic Development ("SED") obligations. Historically the SED obligations have been achieved 
   and the valuation is based on the SED obligations being achieved. If these obligations are not 
   achieved, then the result would be a decrease in the value of the concession investment of 
   R301 million (FY2017: R191 million).                                

   Revenue based on patronage is underpinned by the Gauteng province. The Patronage Guarantee is the 
   difference between the Minimum Required Total Revenue ("MRTR") and the Actual Total Revenue ("ATR") 
   in each month. Due to the predictable nature of revenue it is not considered to be a significant 
   unobservable input and therefore no quantitative information is provided.

   A decrease of 1% in the discount rate would result in an increase in the value of the concession 
   investment of approximately R46,2 million (FY2017: R31,2 million).                                

8. CONTINGENT LIABILITIES
The Group is from time to time involved in various disputes, claims and legal proceedings arising in the
ordinary course of business. The Group does not account for any potential contingent liabilities where a
back-to-back arrangement exists with the clients or subcontractors and there is a legal right to offset 
(R2,3 billion). The Board does not believe that adverse decisions in any pending proceeding or claims 
against the Group will have a material adverse effect on the financial condition or future of the Group.

                                                                                        30 June        30 June     
R millions                                                                                 2018           2017    
Operating lease commitments                                                               1 215          1 314    
Contingent liabilities                                                                    2 297          1 943    
Financial institution guarantees                                                          6 222          5 881    


Update on the Group's claim processes
Uncertified revenue as at the end of the financial year increased to R1,3 billion (FY2017: R0,9 billion),
largely represented by claims on projects in the Middle East and the remainder in the Power & Water platform. 

Grayston Pedestrian Bridge Temporary Works Collapse - Update
The Department of Labour instituted a Section 32 Inquiry ("Inquiry") in November 2015 into this incident to
determine the cause or causes of the collapse of the temporary works structure. The Board would welcome an
expeditious conclusion to this Inquiry.

9. IMPLEMENTATION OF IFRS 15 (REVENUE FROM CONTRACTS WITH CUSTOMERS) AND IFRS 9 (FINANCIAL INSTRUMENTS)
In the 2019 financial year IFRS 15 and IFRS 9 will be implemented, as they are applicable to financial years
commencing on or after 1 January 2018.

The Group has decided that it will apply the modified retrospective approach to transition from existing
IAS's to IFRS 15 and IFRS 9. Therefore comparatives will not be restated. The cumulative effect of initially
applying IFRS 15 and IFRS 9 will be an adjustment to the opening balance of retained earnings at the date of
initial application, being 1 July 2018. 

IFRS 15:56 states that variable consideration should only be included in the transaction price, when
recognising revenue, to the extent that it is highly probable that a significant reversal will not occur 
when the uncertainty associated with the variable consideration is subsequently resolved. IFRS 5 defines 
"highly probable" as "significantly more likely than probable", where "probable" means "more likely than 
not" (IFRS 5: Appendix A).

Uncertified claims and variations of R1,3 billion (FY2017: R914 million) are disclosed separately under
amounts due from contract customers (note 6) in the statement of financial position. These claims and 
variations are yet to be finalised and may be subject to arbitration and/or negotiations. IFRS 15 will 
result in the delayed recognition of variable consideration until such time that it is not highly 
probable that the revenue will not be reversed when the uncertainty is resolved.

The cumulative effect of initially applying IFRS 15 is currently estimated to be between R 0,7 billion 
and R 1,0 billion as at 1 July 2018. The estimated IFRS 15 adjustment consists mostly, but not entirely, 
of the R1,3 billion uncertified revenue disclosed separately under amounts due from contract customers 
(note 6) in the statement of financial position. The IFRS 15 adjustment relates mainly to amounts in the 
Middle East and the Power & Water platforms. The Group remains confident that post the implementation 
of IFRS 15 the uncertified claims and variations will be recognised at a later date, once the uncertainty 
has been resolved.

The impairment requirements under IFRS 9 are based on an expected credit loss ("ECL") model that replaces
the IAS 39 incurred loss model.

The cumulative effect of initially applying the ECL model to assess impairments of receivables in IFRS 9 is
currently estimated to be less than R150 million.

10. DIVIDEND
A gross annual dividend, relating to the 30 June 2018 financial year, of 50 cents per share was declared in
August 2018. In line with the approved dividend policy, the board of directors will only consider paying an
annual dividend.

11. RELATED PARTY TRANSACTIONS
There have been no significant changes to the nature of related party transactions since 30 June 2017 or 
any transactions outside the normal course of business.

12. EVENTS AFTER REPORTING DATE
The directors are not aware of any matter or circumstance arising after the year ended 30 June 2018, not
otherwise dealt with in the Group's annual results, which significantly affects the financial position 
at 30 June 2018 or the results of its operations or cash flows for the year then ended.

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