Infrastructure development and construction materials group Raubex has declared a final cash dividend from income reserves of 29c a share for the financial year ended February 28.
Its secured order book was at a record level following a recovery during the second half of the financial year.
The group’s secured order book increased by 68.9% to R17.1-billion, up from R10.1-billion, and the unsecured contract opportunities, which have been tendered and are still pending adjudication, are “significant”, the company reports.
The group will be looking to participate in these projects from both a construction and materials supply perspective, it points out.
The company posted mixed results amid tough industry conditions and unforeseen challenges, such as the Covid-19 pandemic, and the company demonstrated its resilience over the past year, says Raubex Group CEO Rudolf Fourie.
"We are further encouraged by the good recovery that was made by the group in the second half of the year, a significant increase in tender activity and some major construction contracts that were awarded to the group."
Revenue increased by 1.3% to R8.85-billion, while operating profit decreased by 24.1% to R364.5-million from R480.5-million during the prior financial year, mainly as a result of the Covid-19-related lockdowns, which impacted on operations in various jurisdictions during the first half of the financial year.
Group operating profit margin decreased to 4.1% from 5.5% during the prior year. Earnings a share decreased by 37.1% to 87.4c from 139c with headline earnings a share decreasing by 49.4% to 81.9c from 161.7c.
Further, Raubex’s finance costs decreased to R22-million from R34.3-million in the prior year. Cash generated from operations increased by 68.2% to R1.33-billion, up from R790.2-million in the previous year, before finance charges and taxation, with the strong cash generation during the year attributable to a decrease in working capital.
The group had a net cash inflow for the year of R872.1-million, and total cash and cash equivalents at the end of the year of R1.88-billion up from R1.01-billion during the prior year.
Meanwhile, borrowings decreased by 0.3% to R795.2-million, and consist mainly of instalment sale agreements relating to plant and equipment, which are repayable in monthly instalments.
Capital expenditure on property, plant and equipment decreased by 28.3% to R417.2-million, mainly owing to the timing of replacements in the materials division and delayed expansion opportunities.
Contract liabilities increased by 193.9% to R666.6-million. This was mainly owing to an advance payment received as a loan for mobilisation on the Beitbridge Border Post project in an amount of $23.6-million, as well as an increase in progress billings in excess of costs incurred plus profits recognised on various other projects during the year, the company says.
Opportunities to participate in public-private partnership projects have started coming to the fore in the South African market and the group will review these opportunities and look to participate in these projects on a selective basis. These projects are often complex and entail lengthy development lifecycles before financial closure can be reached.
"With the secured order book now at a record level, the group's strong management team, supported by a healthy balance sheet, position Raubex well for future growth," Fourie says.