Murray & Roberts steadies after hefty write-downs

ONSTRUCTION and engineering group Murray & Roberts expects diluted headline earnings per share for the year to June to increase between 15% and 20%, while its order book has stabilised at R42bn after write-downs due to project cancellations and postponements.

The headline earnings growth is way below the 70% level the group reported for the same period last year before the construction sector began to feel the squeeze from the global economic downturn.

For the year to June last year Murray & Roberts reported a 69% jump in full-year headline earnings and forecast a diluted headline earnings growth of between 25% to 35% for this year.

Murray & Roberts, which releases its annual results on August 26, also said in a trading statement this week it expected to maintain its group operating margin within a range of 7,5% to 10%.

The group said overall performance for the second half-year had been affected by steel-related stock write-downs, project terminations, major project start-up delays and the expectation of the stronger local currency.

Its order book was R42bn in March and had stabilised at this level after a number of previous project cancellations in the Middle East and SA worth R10bn.

This year’s order book level is down compared with same period last year.

The group reported that it had grown 144% to R55bn.

Murray & Roberts as well as other companies in the sector are expected to weather the volatile economic conditions largely due to the government’s multibillion-rand stimulus package that is largely focused on infrastructure development.

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