Basil Read explores project partnerships across Africa

BASIL Read, the listed building and engineering group, is hankering for international business and will explore opportunities across Africa, the Middle East and Australia, according to chief executive Marius Heyns.

‘While the global outlook for growth remains slow, opportunities for infrastructural development exist in various countries and Basil Read will look to join forces with international partners to obtain a share of the work on offer,’ Heyns said yesterday.The group, which aims to turn N$10 billion a year by 2013, last week reported a 35 per cent growth in diluted headline earnings a share to N$15,36 in the six months to June from N$11,22 in the previous corresponding period. Turnover increased by 47 per cent to N$2,1 billion from N$1,4 billion.Operating profit rose by 43 per cent to N$181,8 million from N$126,9 million, with the net margin deteriorating slightly to 5,9 per cent from 6,1 per cent.The group opted not to declare an interim dividend.Heyns said that the group had secured N$2 billion in new contracts in the period under review. Its order book was a healthy N$6,2 billion, compared with N$5,4 billion in the previous corresponding period.Heyns said the group’s results were sound in a period characterised by global financial turmoil and discouraging local economic data, confirming South Africa was in a recession.In South Africa, the group is in the process of acquiring the Gerolemou/Mvela group for N$360 million. The group has a current order book of N$1,2 billion.The Competition Commission has already approved the transaction and the general meeting to obtain shareholder approval is scheduled to take place on September 8. If the transaction is approved, the Basil Read group will have a combined order book of N$7,4 billion.The group advised shareholders earlier this month that it was in discussions with JSE-listed TWP Holdings about a possible merger. But Heyns said opportunities for acquisition would continue to be explored.He said despite uncertain economic times, the trend of development, particularly in sub-Saharan Africa, was expected to resume in the near future even if the growth trajectory was flatter.He added that although the government had committed to continued infrastructural spend, a definite delay in the roll-out of projects had been noted.However, Heyns said budgetary constraints in certain municipalities created opportunities for the Basil Read group to partner with local government in creating innovative ways of financing future projects, particularly relating to the group’s developments division.The private-public project model continued to evolve and remained a feasible method of undertaking larger contracts.Heyns said the group continued to forge long-term and robust partnerships with international construction conglomerates and turnkey contractors, such as Bouygues, Sodexo and Alstom, which would serve the group well when bidding on these types of projects.He said various public-private partnerships (PPP) projects were in the pipeline. Basil Read had pre-qualified for a number of these.The combined construction value for the group’s targeted PPPs exceeded N$15 billion. -Business Report