Construction, mining, development and engineering group Basil Read late on Wednesday posted heavy losses for the six months to June, as lossmaking contracts, a “difficult” contractual environment, labour unrest and slow infrastructure spend weighed on the JSE-listed group’s interim performance.

However, the company was confident of a return to profitability as new management was appointed and an 18-month turnaround strategy got under way to stabilise the company.

Basil Read posted a first-half headline loss a share of 145.74c – a 434% contraction on the headline earnings a share of 43.69c delivered during the comparative six-month period the year before.

Earnings a share fell 175%, from 195.28c in the first half of 2013, to a loss of 145.75c apiece in the six months to June 30.

“The period under review has proven to be challenging for Basil Read, characterised by the continued slow roll-out of infrastructure spend, endemic labour unrest – particularly in the mining sector – and a difficult contractual environment,” interim CEO Des Hughes explained in a statement.

A number of lossmaking contracts in the construction division and difficult trading conditions in the engineering division had further hampered performance.

The group’s financial performance for the period under review was impacted by executive management changes; however, Hughes said this had “afforded an opportunity” to critically evaluate the business and effect changes.

The company’s operating loss from continuing operations was reported at R295.5-million, compared with a profit of R80.2-million during the six months to June 2013.

The reported financial results for the first half of the year included the R183-million profit on the disposal of the TWP group.

Basil Read delivered a 10% increase in revenue to R3.3-billion.

The group’s cash position was negatively impacted by the losses posted, decreasing to R803.8-million.

“The group has successfully maintained the order book at R12.4-billion, with work performed in the first half of the 2014 financial year being successfully replaced through the awarding of additional work,” Hughes added.

This excluded construction work valued at R4.5-billion that would be realised as large-scale integrated housing developments progressed.

“While trading conditions remain challenging, opportunities do exist, particularly in other African countries where the group is steadily establishing a presence,” he said.

Basil Read aimed to ensure that the current lossmaking contracts were successfully completed “as quickly and efficiently as possible”.

In line with this, an 18-month turnaround strategy was developed, focusing on the critical evaluation and shifting of the various businesses and assets in the group into core and noncore categories.

“Mechanisms that will afford greater opportunities for synergy between the various teams and divisions are also in the early stages of implementation, with a view to creating a simplified structure and possible centralisation of support services.”

Neville Nicolau would take over as CEO on September 1, while a new CFO would be appointed before the end of the financial year.