Basil Read reports increase in profits

Construction and engineering group Basil Read Holdings’ reported a return to profitability in its interim results to June 30 2013 despite difficult trading conditions.

The company on Thursday reported headline earnings per share of 43.69 cents, up 196% from 14.75 cents in June last year while operating margins increased from 0.5% to 2.7%. It also increased its order book by 20% to R12.2-billion.

Marius Heyns, the chief executive officer, said in a statement that Basil Read’s results were achieved despite "a tough trading environment in the South African construction sector and the continued slow roll-out of projects, endemic labour unrest and difficult contractual environment which … contributed to margins remaining compressed."

"The volatile labour environment in the South African mining industry, led to several unprotected strike actions at the Group’s mining division sites, resulting in decreased productivity," he said.

"Labour relations continue to be fragile and are being managed on an ongoing basis."

Heyns said contractual risk continues to be a concern as routine claims take longer to be resolved, which places pressure on cash flows. "Liquidity is being further affected by delayed or non-payment of debtors which is, in turn, hampering growth," he said.

The company’s revenue increased by 10% to R3-billion and total debt decreased by 27% to R639.1-million.


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