M&R set for ‘new strategic future’

28th August 2014

By: Natasha Odendaal

Creamer Media Senior Deputy Editor

  

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Murray & Roberts (M&R) has closed the book on its three-year recovery and growth phase and has now turned its focus to a longer-term “new strategic future” of “engineering excellence”.

The past three years have seen the international engineering-led contractor return to financial stability – and profitability – through focused interventions aimed at reorganising and re-energising the business following “huge losses” in the 2011 financial year.

The company aimed to maximise shareholder value, focus on the natural resources sectors, diversify its business model, boost its market valuation and positioning, enhance safety, performance and diversity of its employees and deliver project and commercial management excellence.

To achieve this, M&R had consolidated and renamed its operating platforms to represent its new targeted areas. These were Oil & Gas, previously called Construction Australasia Oil & Gas and Minerals; Underground Mining, previously Construction Global Underground Mining; Energy & Industrial, previously Engineering Africa; and Infrastructure & Building, previously Construction Africa and Middle East.

The group would move to resolve the Gautrain and Dubai claims, as well as the Gautrain water ingress challenge, enhance earnings before tax, improve free cash flow and return-on-investment performance and grow dividend payments.

Market presence in the oil and gas, mining, and energy and industrial markets would also be expanded, with the company also evaluating the potential of entering the water market sector.

Specialist engineering capabilities through bolt-on acquisitions would also be a focus point for the engineering group, as would the growth of commissioning and asset support and investments into selected project development opportunities.

Market evaluation and positioning would be enhanced through the repositioning of M&R and its brand with all stakeholders.

Further, project delivery and commercial management excellence would be achieved through the enhancement of engineering, procurement and construction and project management capabilities, while entrenching project, risk and commercial management practices.

The new strategic future plan followed on M&R’s recovery and growth in the past three financial years, where a focus on regaining its market leadership position, reorganisation, realignment and reenergisation, liquidity improvement and the resumption of dividend payments was maintained.

Most of what the group had set out to achieve had been completed by the end of the financial year under review, with the company now aiming to be a “leading international diversified project engineering, procurement and construction group” in selected natural resources market sectors by 2020.

ORDER BOOK
The group ended the financial year with an order book of R40.9-billion.

The Oil & Gas unit, which comprised Clough, e2o and several strategic joint ventures, including M&R Marine, reported a decrease in its order book to R16.7-billion.

The Underground Mining division, home to M&R Cementation, Cementation Canada, Cementation US, Cementation South America and RUC Cementation Mining, held an order book of R9.9-billion.

M&R Cementation received its first major order from diamond miner De Beers on the Venetia project to the value of R2.6-billion, while negotiations on the multibillion-rand Kalagadi Manganese contract continued.

Meanwhile, Energy & Industrial, comprising subsidiaries M&R Power & Energy, M&R Resources & Industrial, M&R Water, M&R Electrical & Control Systems and Genrec, boasted a R6.2-billion order book, while the Infrastructure & Building unit, which housed M&R Buildings, M&R Middle East, M&R Western Cape, M&R Botswana, M&R Namibia, M&R Infrastructure, Concor Opencast Mining and PPP Investments and Services, had a R8.1-billion order book.

Edited by Creamer Media Reporter

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