Settlement charge costs South Africa’s WBHO earnings

WBHO was one of seven construction companies in South Africa which agreed to contribute a total of $115.76 million over the next 12 years towards a development fund.

0
39
Settlement charge costs South Africa's WBHO earnings
The firm blamed the decline in earnings on its payment towards a fund to develop skills in the sector and give black workers a bigger role.

South African construction giant Wilson Bayly Holmes-Ovcon (WBHO)has announced a 2.5% decline in full-year earnings.

The firm attributed the downward trend to its payment towards a fund to develop skills in the sector and give black workers a bigger role.

The builder was one of seven construction companies in South Africa which agreed in October to contribute a total of 1.5 billion rand ($115.76 million) over the next 12 years towards a development fund.

Read:Acacia Mining scales down Tanzania operations

WBHO said headline earnings per share from continuing operations came in at 1 308 cents for the year ended June, down from 1 342 cents the previous year. The construction firm makes 58% of revenue from Australia where it also operates.

WBHO’s total order book increased by 5% to R45 billion, which was boosted by higher margin work from its roads and earthworks division.

Group revenue increased by 4% to R31.9 billion, while operating profit before non-trading items fell 1.8% to R986 million.

“The group delivered a positive set of results in a year where market sentiment in Australia was upbeat, while locally the year was characterised by low-growth, a volatile rand exchange rate and political events which impacted South African business confidence,” WBHO said in a statement.

Also read:Tanzania’s Heidelbergcement posts 45.6% drop in profit

However, the company said that activity in the retail, commercial office and entertainment sectors boosted revenue for WBHO’s building and civil engineering division, which rose 8% to R8.1 billion. The firm declared a final gross dividend of 325 cents per share.

In June this year WBHO entered the UK market with a 40% stake in Byrne Group.

($1 = R12.9575)