Raubex is no longer a South African National Roads Agency Limited (Sanral) or a road-building company, but a diversified infrastructure and materials group, says CEO Rudolf Fourie.

A spate of acquisitions, aimed at achieving the goal of diversification, as well as a growing order book, has seen the company increase revenue by 14.5%, to R7.25-billion, for the year ended February 28, with operating profit up 15.2% to R622.2-million.

A strike in Namibia and flooding in Mozambique had a combined R10-million effect on the bottom line, says Fourie.

The group’s operating profit margin was 8.6% for the year.

Employment increased from 8 306 people in the previous financial year to 9 598 people.

Recent acquisitions include a 60% share in Shisalanga Construction for R38.4-million in June last year, and a 70% share in OMV Crushers for R70.3-million in July last year.

Raubex acquired 100% of Buildmax Quarries on September 1 for R59.7-million, and 70% of Empa Structures on November 1 for R25.5-million.

Empa Structures was specifically acquired to gain expertise in concrete structures such as reservoirs and bridges, says Fourie.

The most recent newcomer to the company’s fold is Belabela Quarry, in Botswana.

Raubex acquired 74% of the company on April 18 for R43-million.

“We can use Belabela as a springboard to gain access to the very important Botswana market,” notes Fourie.

Around 25% of the group’s R8.68-billion three-year order book is outside South Africa, with greenfield road projects in Zambia making up a substantial part of the percentage.

There is no target for a percentage of revenue to be earned outside South Africa, says Fourie; instead, there is a target to achieve double-digit margins.

Sanral makes up 27% of the 2015 order book, down from 31% in 2014, and the roughly 45% before.

Fourie says one of the noticeable changes in the 2015 order book is the increase in contracts from municipalities and provincial governments, from 7% of the order book in 2014 to 13% in 2015.

“More than half of South Africa’s black roads are in these sectors. We have seen an increase in work in the last six months, which is quite encouraging. We picked up work in the Eastern Cape, Ekurhuleni and Tshwane.

“I’m not saying it is a turnaround, but I have hope – this is where the bad roads are and it would be very good for us if this trend continues.”

Looking at the broader construction sector, Fourie expects competitive conditions in the South African construction sector to continue, with margins to remain tight.

“It has not got worse, but it certainly has not improved either.

Fourie emphasises that Raubex’ healthy order book allows it to tender selectively, with the focus in many instances on higher-margin work.

Risks to the group in the year ahead include industrial action and commodity prices. The volatile oil price has, for example, been causing havoc with bitumen costs.