Audited Summary Consolidated Financial Statements for the year ended 30 June 2016

The group delivered strong financial results this year. Markets were once again characterised by strong Australian building markets and subdued civil engineering markets globally. While local building markets have begun to taper, the group has shown good growth from this sector as it continues to increase its market share.

Revenue from continuing operations increased by 6% to R30,7b for the year ended 30 June 2016 as further growth within the group’s building divisions, both in Africa and Australia, continued to moderate the impact of lower activity levels within the mining and other civil engineering sectors.

The impact of these challenging conditions is evident within the group’s African-based operations where revenue decreased by 7% following declines in revenue from both the Roads and earthworks and Civil engineering divisions. Revenue growth in Australia reflects real growth of 8% in Australian dollar terms but was assisted by a weaker rand, where currency effects amounting to R1,5b resulted in overall growth of 18%.

Operating profit before non-trading items increased by 31% to R1b from R768m. This reflects the healthy recovery in profitability in Australia from R11m to R300m, where in the previous year losses on four civil engineering projects were recognised. Profitability from Australia this year was further supported by R45m in unrealised exchange gains following the devaluation of the Rand. Profitability from African based operations declined by 7% in line with lower activity levels.

While the overall margin of 3,3% reflects an improvement over the margin of 2,7% achieved at 30 June 2015, the volume of Australian-based projects, increased local building activity and a heavier weighting toward roadwork within the Roads and earthworks division resulted in the margin being constrained towards the lower end of the group’s targeted range of between 3% and 4,5%.

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