Prospects

The group’s total secured Contracting order-book (Construction and Engineering & Construction) stands at R13,5 billion (June 2012 R11,3 billion and December 2011: R10,3 billion). In addition, the group reported R4,6 billion in secured operations and maintenance contracts (June 2012: R4,8 billion). The overall group reported order-book at December 2012 thus stands at R18,1 billion.

The value of the group’s target opportunity pipeline stands at R124 billion, which is down from R148 billion at June 2012 and R144 billion at December 2011 due to a more conservative targeting of key sector and projects and some awards having been secured. The pipeline indicates a swing in favour of power, with mining, transport and real estate strong.

The Investments and Concessions cluster is delivering annuity business growth, with group-wide opportunities in active infrastructure sectors in increasing geographies. Manufacturing has been refocused and its performance is improving on higher sales volumes to a broadening number of markets. The disposal of the loss-making Construction Materials cluster has resulted in the reduction in cash drain from this part of the group. The Middle East operations have been substantially reduced and contract close-outs progressing well, thus further reducing the drag on group performance.

Based on the group’s positioning in the key infrastructure growth sectors of power, mining, oil and gas, water and transport and in the concessions and PPP market for specific projects, underpinned by the group’s strong cash position, management expects a further recovery in group activity levels. This should support continued improvement in the group’s trading performance from H2 F2013.