Murray & Roberts concludes recovery year and prepares for growth

29 August 2012

Johannesburg, 29 August 2012 - Murray & Roberts today announced its annual results for the year ended 30 June 2012.

Revenue from continuing operations increased by 16% to R35,4 billion (2011: R30,5 billion). An attributable loss of R736 million (2011: R1 735 million) was incurred, of which R208 million was recorded for the second half of the year, after accounting for significant charges and contract completion costs.

The Group ended the year with an order book of R45,3 billion. The average margin in the order book is within the Group's strategic range of 5,0% to 7,5%.

Henry Laas, group chief executive comments: ‘The Recovery year has been an exceptional one for the Group, in the context of the achievement of the objectives that were set more than 12 months ago. Two of the five operating platforms that are mostly dependant on the South African construction sector, continued to experience challenging market conditions. However, the Group's resilience was ensured through the diversity of its operations and markets."
 
The Group's commitments on the Gorgon Pioneer Material Offloading Facility were discharged, although later and at a greater cost than had been anticipated. The Board is however pleased to announce that the arbitration rulings on the first three disputes on this project, relating primarily to scope changes from the tendered design, have been awarded in the Group's favour.

The achievement of Operating Commencement Date 2 ("OCD2") on the Gautrain Rapid Rail Link was a big achievement for the Group within the year. OCD2 was certified by the Independent Certifier after the remedial work to address water ingress in the Rosebank to Park Stations section of tunnel was completed.

The Group is also pleased to announce that a resolution of major commercial issues on the Medupi Power Station Civils contract with Eskom was reached in the year under review. The arbitration on the Dubai International Airport is following its course and the Group expects resolution towards the end of the 2013 calendar year.

The Steel Business, including Cisco, was disposed of at book value subsequent to the year-end in two separate transactions. The Steel Business transaction, excluding Cisco, is subject to Competition Commission ("Commission") approval.

The Group ended the year with a lost time injury frequency rate of 1,14, the lowest rate yet recorded and two operations achieved 12 months without a lost time injury.

Significant strides were made on risk management. The internal audit function was further strengthened and a regulatory compliance function was established, which together with risk management form the three pillars of integrated assurance.

The Group has not yet reached finality with the Commission regarding the potential applications and penalty relating to historic anti-competitive practices and the Board is of the view that the provision held as at 30 June 2012 is adequate.

"The Group's focus on growth is motivated by the objective to enhance shareholder value through a return to profitability as soon as practically possible. The growth strategy envisages aligning the Group's portfolio of businesses selectively with market segments and geographies that present sustainable growth potential, simultaneously expanding its offshore revenue base," concludes Laas.

*Please note that this media statement contains extracts from the full Preliminary Report for the year ended 30 June 2012 and should be read in conjunction with the full Preliminary Report available on www.murrob.com.

For further information contact:

Mr Ed Jardim
Group Communications Executive
Mobile +27 (0) 83 357 6282
E-mail: eduard.jardim@murrob.com

Murray & Roberts Client Service
Tel: +27 (0)11 456 1144
Fax: +27 (0)86 637 0113
E-mail: clientservice@murrob.com

Disclaimer

This media statement is not an offer for the sale of securities. The securities discussed herein have not been and will not be registered under the U.S. Securities Act of 1933 ("U.S. Securities Act"), or under any securities laws of any state or other jurisdiction of the United States and may not be offered, sold, taken up, exercised, resold, renounced, transferred or delivered, directly or indirectly, within the United States absent an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States.

This media statement includes certain various "forward-looking statements" within the meaning of Section 27A of the US Securities Act 10 1933 and Section 21 E of the Securities Exchange Act of 1934 that reflect the current views or expectations of the Board with respect to future events and financial and operational performance. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements, including, without limitation, those concerning: the Group's strategy; the economic outlook for the industry; use of the proceeds of the rights offer; and the Group's liquidity and capital resources and expenditure. These forward-looking statements speak only as of the date of this media statement and are not based on historical facts, but rather reflect the Group's current expectations concerning future results and events and generally may be identified by the use of forward-looking words or phrases such as "believe", "expect", "anticipate", "intend", "should", "planned", "may", "potential" or similar words and phrases. The Group undertakes no obligation to update publicly or release any revisions to these forward looking statements to reflect events or circumstances after the date of this media statement or to reflect the occurrence of any unexpected events.  

Neither the content of the Group's website, Clough's website nor any website accessible by hyperlinks on the Group's website is incorporated in, or forms part of, this media statement.

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