No immediate plan to list Aveng in Australia, but future listing likely amid change in reporting currency to Aussie dollar

Incoming Aveng CEO Scott Cummins

Incoming Aveng CEO Scott Cummins

20th February 2024

By: Terence Creamer

Creamer Media Editor


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JSE-listed Aveng, which recently relocated is management epicentre to Australia and changed its reporting currency from South African rands to Australian dollars, has no immediate intention of listing in Australia but acknowledges that such a move is possible in future.

Incoming CEO Scott Cummins, the Australian civil engineer who succeeds South African Sean Flanagan on March 1, reiterated that governance and control of Aveng will continue to be in South Africa, where it will remain listed on the JSE.

However, CFO Adrian Macartney, who is relocating to Melbourne to participate in the group’s newly assembled executive structure, confirmed during a results presentation that the group had been assessing a diversification of its sources of capital for some time and that an Australian listing could, thus, represent a “natural home”.

He stressed that such a move was not imminent, and that no thought had yet been given to whether it would be a primary listing or a dual listing.

The decision to change the reporting currency from rands to Australian dollars, he added, was not a precursor to a change in domicile, but rather a reflection of the fact that 91% of the group’s revenue was sourced from outside South Africa.

In addition, there were factors to consider – from tax to market recognition and receptiveness – before any listing decision could be taken.

Cummins stressed that his immediate priority was to focus the group’s infrastructure, building and contract mining brands of McConnell Dowell, Built Environs and Moolmans respectively on pursuing higher margins rather than revenue.

“One hundred percent of my focus, and that of my executive team, is on improving the week-in, week-out performance of all of our business units, where we want to raise the margin percentage that we report to the market every six months,” he said, while indicating that a listing in Australia could only be considered once a positive track-record had been firmly established.

In the interim period to the end of December, the group’s order book fell to A$3.6-billion (R44.5-billion) from A$4.2-billion (R52.2-billion) in June 2023. Headline earnings rose 74% to A$11.3-million (R137-million), from A$6.5-million (R77-million) in December 2022.

He acknowledged the prevailing difficult trading conditions for mining in South Africa but insisted that the Moolmans fleet renewal programme would remain a priority, alongside efforts to diversify the company’s client, commodity and geographic profile.

Moolmans would remain focused on surface-mining but was keen to diversify away from the current dominance of manganese in its portfolio to include other commodities such as gold and uranium, with prospects in Namibia and West Africa being actively pursued.

While transport infrastructure-related work was tapering somewhat in Australia, McConnell Dowell was moving to occupy a niche position in the growing market for new energy, including the conversion of gold mines into pumped-hydro schemes.

Cummins indicated that McConnell Dowell would seek to consolidate its pioneering position in the pumped-hydro sector, while pursuing aspects of the broader renewable-energy construction market, such as the building of near-shore structures for offshore wind farms.

Its Built Environs business, meanwhile, would continue to position itself for hospital construction work, given the relative complexity of such projects when compared with to the general building market.

There was no intention, however, to re-enter the South African infrastructure and building markets, which Aveng exited when it sold Grinaker-LTA in 2019.

Edited by Creamer Media Reporter



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