Johannesburg - An increase in contracts for civil engineering works filled the gap caused by a decline in building contracts undertaken by Wilson Bayly Holmes-Ovcon (WBHO), Brian Holmes, the group chairman, said yesterday.
The company had pursued the Stocks Civils acquisition because it provided the group with civil engineering, roads, earthworks and mining capacity and broadened the group's footprint.
Angus MacKenzie, WBHO's financial director, said the company's prospects were a lot more buoyant as a result of being awarded civils work since the beginning of the year amounting to more than R335 million.
The building sector had been depressed and conditions had been tough, but casino contracts added some lustre to the industry.
Operating income for the six months to December rose 23 percent to R32 million on a turnover increase of 15 percent to R735 million. WBHO said turnover from local operations had increased, while that from international operations had decreased.
That runs contrary to most construction groups' objectives of targeting international expansion ahead of domestic operations. Earnings a share rose 22 percent to 50,3c.
Government spending on infrastructure has been virtually non-existent, though that was expected to change with the announcement in last week's Budget that R7,8 billion would be devoted to infrastructure projects.
The group is in the final stages of completing a major offshore acquisition, an announcement of which will be made shortly. It will be the first acquisition offshore for the company. WBHO intends to tender for projects further north than its usual domain such as Tanzania and Ethiopia.
The group expected an improved second half and forecast higher results in the second half of the year than the six months under review. WBHO starts the new year with an order book of R1,5 billion excluding the N4 Platinum tollroad contract.
WBHO closed 15c higher at R4,55 yesterday.