Construction group Aveng reported an 8% fall in headline earnings to R1,88-billion, from R2,05-billion, for the year ended June 30, 2010, in a "difficult" operating environment characterised by low tender activity and tightening margins. The company, which is led by Roger Jardine, expected the market to remain difficult "over the next year". The company also announced that its board had approved a share repurchase programme, through which up to R1-billion-worth of shares would be bought back "when opportunities arise in the market". But it also stressed that it would continue to seek acquisitions. The group reported a 1% increase in revenue to R34-billion, while operating profit before depreciation and amortisation increased by 5% to R3,2-billion and operating profit remained constant at R2,1-billion.

Cash generated by operations increased 7% to R3,2-billion and the group ended the year with net cash of R7,5-billion, marginally higher than the R7,4-billion recorded in 2009. The group described its two-year construction order book of R31,1-billion as "healthy" and said that the Grinaker-LTA backlog of R9,7-billion could be bolstered should the South Africa's infrastructure programmes be fast-tracked. The McConnell Dowell two-year order book stood at R13,4-billion, but Aveng warned that industry margins were expected to remain under pressure. Its opencast mining segment, which had a backlog of R7-billion, was "well positioned to extend its strong performance in the year ahead". The JSE-listed group had identified a total project pipeline worth R102-billion, which it would continue to pursue.

Engineering News
Terence Creamer