Renewed focus returns Basil Read to profitability

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The construction, engineering, mining and property development group saw revenue increase to 6.3 billion rand for the year ending 31 December 2013 from 5.4 billion rand for the same period in 2012.

“The South African trading environment continues to be subdued, with little improvement in market conditions and business confidence remaining low. Endemic labour unrest continues to hamper productivity, particularly in the mining division,” Basil Read Holdings Limited said.  

“The continued slow roll out of projects and a difficult contractual environment have proven to be challenging and have contributed to margins remaining compressed. Despite the difficult environment, Basil Read demonstrated a return to profitability through renewed focus on core operations and a period of consolidation.”

(READ MORE: Scars from Competition Commission inquiry still sting for Basil Read)

Operating profit for the year, before provision for the Competition Commission, was at 87 million rand in 2013, up from a loss of 105 million rand in 2012.

The company reported its profit for the year before taxation at 126 million rand from a loss of 210 million rand in the previous year. Its order book however grew to 12.5 billion rand in 2013 from 10.2 billion rand in 2012.

Its earnings stood at 310.7 million rand while diluted earnings per share increased to 235.9 cents in 2013 from a loss of 136.5 cents in 2012.

(READ MORE: Basil Read expects EPS turnaround)

“Trading conditions in the South African construction sector remain challenging and the roll out of public sector work remains slow. To offset the weak local conditions, the group is targeting further expansion into other African countries, where significant opportunities exist across all divisions,” the company said.

“The 2013 financial year was a year of consolidation and stabilisation following a poor operational performance in 2012. With significant prospects, a strong order book and a substantially stronger balance sheet, we are optimistic that the basics are in place for a successful year ahead and the ongoing sustainability and growth of the group.”