Sharenet Sites 
Sharenet Sites
Business Update and Trading Statement in respect of the six months ended 31 December 2020
WILSON BAYLY HOLMES - OVCON LIMITED
Building and civil engineering contractors
(Registration no. 1982/011014/06)
ISIN No: ZAE 000009932
Share code: WBO
(“WBHO” or “the Company”)
BUSINESS UPDATE AND TRADING STATEMENT IN RESPECT OF THE SIX MONTHS ENDED 31 DECEMBER 2020
WBHO’s operations in Africa and the United Kingdom produced solid results over the first six months of the financial year
amidst a challenging environment. The Group will return to operating profitability even though it has been negatively
affected by further previously unidentified costs to complete the WRU project.
Building and civil engineering
The division has performed well over the period and revenue is expected to have improved substantially over that of the second
half of the prior year and be approximately 4% down over the comparative period which was prior to the impact of COVID-19 .
The operating margin is expected to be broadly in line with the comparative period at 3,6%.
Roads and earthworks
Revenue from this division is also expected to have recovered considerably when compared to the second half of the prior year
but will have likely declined by approximately 11% over the comparative period. The operating margin has however improved
significantly over the comparative period and is expected to be in the region of 5,8%.
Australia
Revenue from the Australian operations is expected to have decreased from the levels achieved both in the second half of the
prior year and the comparative period by approximately 18% and 15% respectively. This can be attributed to the winding down of
the physical works in respect of WRU as the project progressed toward completion and a hard lockdown implemented in Victoria
that affected the operations of the Building business for 7 weeks during the six month period to 31 December 2020.
The Covid-19 related lockdown that spanned from 7 August 2020 to 28 September 2020 in Victoria, once-off costs incurred by
WBHO Australia in respect of the unsuccessful sale of Probuild and further issues on the problematic Western Roads Upgrade
(WRU) Project have all negatively impacted profitability from the region over the reporting period.
The 8 individual projects comprising the WRU project are now physically complete but to achieve physical completion, further
material costs were incurred when replacing the lead subcontractors on Projects 3 and 7. Subsequent to their replacement, a
sizeable number of defects were identified which require rectification. The project continued to experience utility clashes and
increased utility charges which were not identified at September 2020. Based on the current progress toward achieving of the
quality handover certification and commercial acceptance and the ability to retain employees, the contractual date for this process
is considered to be at risk and significant additional costs have been provided in this regard. As such, a further loss of A$ 28 million
has been provided for.
The combined effect of each of these events is expected to result in the Australian operations operating profit excluding WRU
essentially breaking even for the period and an overall operating loss from Australia of approximately A$ 28 million.
United Kingdom
Revenue is expected to be in line with the second half of last year but 10% down in relation to the comparative period. The
operating margin is also expected to remain in line with the comparative period at approximately 4,3%.
Construction materials
The Construction Materials businesses within the Group have performed admirably over the first half of the reporting period with
revenue expected to have increased by around 28% over the comparative period with the division returning to profitability.
Investment income
Interest earnings have been affected by lower interest rates and lower cash balances due to the funding of WRU and is expected
to be materially less than that of the comparative period.
Liquidity
WBHO continues to generate sufficient cash to meet both its operational funding and capital requirements and this has
contributed toward healthy cash reserves of R5 billion and a strong balance sheet at 31 December 2020. The Group has the
appropriate processes and systems in place to provide the necessary information to proactively manage cash and liquidity and
liquidity in each region has been forecast to the end of November 2021. Consideration has been taken of the impact of Covid-19
on the economies in the countries in which the Group operates and these pressures, as well as the further capitalisation of WBHO
Australia stemming from the further anticipated loss in respect of WRU, have been forecast into the future expected cash flows.
Cash reserves in the United Kingdom and Africa remain strong.
Trading statement
In terms of the JSE Limited listing requirements (“listing requirements”), companies are obligated to publish a trading statement
as soon as they are satisfied that a reasonable degree of certainty exists that the financial results for the period to be reported
upon next will differ by at least 20% from the financial results for the previous corresponding reporting period.
Shareholders are accordingly advised that when compared to the earnings per share (“EPS”) of 412 cents per share and headline
earnings per share (“HEPS”) of 411 cents per share for the half year ended 31 December 2019, the EPS and HEPS of the Company
for the period ended 31 December 2020 are expected to be lower by at least 94% and 84% respectively, equating to 25 cents and
67 cents, respectively.
The financial information on which this trading statement is based, has not been reviewed and reported on the by the Company’s
external auditors.
The results for the six months ended 31 December 2020 are expected to be announced on SENS on 2 March 2021.
By order of the board
Johannesburg
17 February 2021
Sponsor: Investec Bank Limited
Date: 17-02-2021 02:28:00
Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
