Mar 15, 2013
Basil Read shares fall on earnings warningBack
Construction|Civils|Roads|SIOC CDT Investment Holdings|TWP|TWP Holdings|WorleyParsons|Basil Read
© Reuse this
Headline earnings for the year were predicted to be between 185% and 195% lower than in the previous financial year.
The group’s share price fell to a low of R10.75 in early morning trade, but recovered somewhat, trading at R10.99 by 15:30, down 7.26% on Thursday’s close of R11.85.
The group attributed its disappointing performance to several factors, including a nonrecurring noncash charge relating to a recently concluded broad-based black economic-empowerment transaction with SIOC CDT Investment Holdings for an amount of R60.5-million.
In addition, a noncash write-down of R27-million for development land relating to the group’s investment in the Rolling Hills Estate, in Mpumalanga, as well as a charge of R65-million raised in relation to the Competition Commission’s investigation into the construction industry, contributed to the contraction in margin.
“Moreover, difficult trading conditions, particularly in the construction sector, have led to the group incurring substantial losses on certain contracts,” the company said.
During the year, the group’s roads and civils business was challenged by labour unrest, unrealised production targets and unseasonal rain.
Meanwhile, despite having a signed settlement agreement and the receipt of a part payment relating to the outstanding amounts owing by the Free State Provincial Government (FSPG), Basil Read said it was still due payments totalling some R80-million.
“However, the FSPG has confirmed that the outstanding monies will be paid in the province’s next financial year and the group’s expectation is that this will be in May,” it reported.
The group’s order book remained steady at a level of R10.1-billion, adjusted for the sale of subsidiary TWP Holdings to WorleyParsons for a cash consideration of R900-million.
Meanwhile, a special dividend to shareholders for the period equating to R230-million had been approved, with the company declaring a special gross dividend of 175c a share, or 148.75c a share net of 15% dividend withholding tax.
The group’s full-year results would be published on or about March 27.
Edited by: Chanel de Bruyn© Reuse this Comment Guidelines (150 word limit)
Other Construction News
Updated 4 hours ago Human Settlements Minister Lindiwe Sisulu was considering the formation of a Women Construction Bank to focus on financing women-led cooperatives and construction companies involved in community infrastructure and human settlements projects. Delivering a keynote...
Updated 5 hours ago Redefine Properties CEO Marc Wainer has been appointed executive chairperson, succeeding Dines Gihwala, who resigned in June, citing personal reasons. Redefine FD Andrew Konig has been appointed CEO and a new FD will be recruited in due course.
Updated 1 hour 1 minute ago Changes had to be made in South Africa’s water and sanitation sector to ensure challenges were resolved effectively, as well as to fast-track the country’s socioeconomic transformation, Water and Sanitation Minister Nomvula Mokonyane told delegates at the 2014...
Updated 1 hour 18 minutes ago Steel producer ArcelorMittal South Africa (AMSA) has confirmed that the reline project at its Newcastle mill, in KwaZulu-Natal, has hit snags and that the project, which was initially expected to be completed four months after the May 12 shutdown began, will be...
Updated 1 hour 37 minutes ago The World Trade Organization failed on Thursday to reach a deal to standardise customs rules, which would have been the first global trade reform in two decades but was blocked by India's demands for concessions on agricultural stockpiling. "We have not been able to...
Recent Research Reports
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
Real Economy Insight: Road and Rail 2014 (PDF Report)
This six-page brief covers key developments in the road and rail industries over the past 12 months, including details of South Africa’s road and rail network and prospects for both sectors.
Real Economy Insight: Steel 2014 (PDF Report)
This four-page brief covers key developments in the steel industry over the past 12 months. It provides an overview of the global and South African steel and stainless steel markets, South Africa’s major steel producers and events that have shaped these markets.
This Week's Magazine
South African construction company Group Five says work on the rehabilitation of the 800 km stretch of the Plumtree–Mutare highway, in Zimbabwe, should be completed by the end of this year. Giving evidence before the Parliamentary Porfolio Committee on Transport...
The Space Operations division of the South African National Space Agency (Sansa) revealed on July 17 that it had supported the successful launch of the US National Aeronautics and Space Administration’s Orbiting Carbon Observatory-2 (OCO-2) satellite on July 2. The...
Phase 1A of Johannesburg’s Rea Vaya bus rapid transit (BRT) system should carry around 42 000 people a day, while it was been expected that Phase 1B, rolled out last year, would add another 60 000 daily passengers. However, the entire system is currently carrying...
A stormwater project in Bedforview, east of Johannesburg, has stalled for eight months after project managers in the Ekurhuleni municipality resigned and municipal managers were placed on special leave without designating replacements. Construction to reinforce the...
The design of the Beit Bridge border post is the biggest impediment to efficient freight movement between Zimbabwe and South Africa, says Cross-border Road Transport Agency CEO Sipho Khumalo. Beit Bridge is the busiest border post in Africa. A research study on the...