Strategic performance

The Group’s New Strategic Future plan intends to achieve sustainable growth in profitability, cash generation and returns to our shareholders. It encompasses six specific objectives and related priorities, which align to the performance dimensions against which executive management is measured.

   

GROW
PROFITABILITY
AND CASH FLOWS

 
 
Resolve the Gautrain and Dubai International Airport claims

Progress: Favourable rulings on the Sandton Cavern and Cantilever Bridges claims. The Water Ingress matter remains unresolved and will be heard in court. The balance of the Delay and Disruption claim is scheduled to be heard in calendar years 2017 and 2018. Dubai Airport City Corporation confirmed as respondent to final payment dispute.

 
Enhance EBIT, free cash flow and ROICE performance

Progress: Further decline in the Oil & Gas platform’s earnings and legacy project losses in Power & Water impacted the Group’s profitability. The robust performance in Underground Mining was not sufficient to compensate. Cost reduction remains a focus across the Group, and a strong cash position was achieved despite difficult trading conditions.

     

FOCUS ON
INTERNATIONAL
NATURAL RESOURCES
MARKET SEGMENTS

 
 
Grow LNG, metals and minerals, and power market presence

Progress: Oil & Gas established a further presence in the North American region through an acquisition and implemented regional structures to drive international growth. Underground Mining established a presence on the Canadian west coast through an acquisition. Power & Water successfully delivered a project in the power sector in Botswana, and water projects in Ghana and Kenya.

 
Enter water and wastewater treatment market sector

Progress: Aquamarine grew its revenue and increased its sales force across Africa. Murray & Roberts Water established agreements with key international technology partners in desalination and water treatment.

     

DIVERSIFY THE
GROUP’S BUSINESS
MODEL INTO HIGHER
MARGIN SECTORS

 
 
Expand specialist engineering capabilities into all project value chain segments to offer more complete project solutions
 
Grow commissioning, brownfield, and operations and maintenance capabilities
 
Invest in selected project development opportunities

Progress: Oil & Gas successfully integrated the specialist engineering and asset support companies acquired in the previous year. Underground Mining secured contract mining projects in all major regions in which it operates. Power & Water entered into a joint venture with an international EPC company to provide shut-down, operations and maintenance services in the South African power sector, and marketed its profile as an EPC and operations and maintenance contractor in the power and water sectors in Africa.

     

DELIVER PROJECT
AND COMMERCIAL
MANAGEMENT
EXCELLENCE

 
 
Enhance EPC and project management capabilities
 
Entrench project, risk and commercial management best practice

Progress: The Group continued to reduce margin erosion from loss-making and distressed projects. All platforms are focused on implementing a custom-built project management assurance system.

     

ENHANCE
THE SAFETY,
PERFORMANCE
AND DIVERSITY
OF OUR PEOPLE

 
 
Achieve industry-leading HSE performance

Progress: Regrettably, two fatalities in South Africa overshadowed safety gains. The Group achieved a record-low LTIFR and continued to roll out the MAP programme.

 
Enhance leadership capabilities and bench strength

Progress: Leadership appointments were made in all platforms, and bench strength for leadership and senior management succession is continuously assessed and supported by leadership development initiatives.

 
Improve employee relations and employee engagement

Progress: Employee engagement surveys were undertaken across the Group, with favourable results. The South African businesses and Australian mining operations were rated as employers of choice by 88% of employees in the Deloitte Best Company to Work For survey.

   

ENHANCE
SHAREHOLDER
VALUE

 
 
Reposition Murray & Roberts with all stakeholders
 
Enhance market valuation and positioning
 
Dividend policy

Progress: With the separation of the I&B platform, the better quality earnings expected from the three global natural resources-focused platforms should improve investors’ perception of Murray & Roberts’ risk profile, with a concomitant improvement in market valuation over the medium term. All platforms have developed clear strategies for the next three-year planning period, which seek to drive further progress in each of the Group’s strategic objectives. We continue to identify acquisition opportunities to strengthen the presence and capacity of the business platforms to deliver projects across the full project lifecycle in our target regions.