By 2020 the Group aims to be a leading international diversified project engineering, procurement and construction group in selected natural resources sectors and supporting infrastructure. In the Group’s New Strategic Future plan, specific objectives and priorities were defined to give clear expression to the Group’s strategic direction.

The Group’s strategic objectives are:

Grow profitability and cash flows;
Focus on international natural resource market sectors;
Diversify business model into higher margin segments;
Deliver project and commercial management excellence;
Enhance the safety, performance and diversity of our people; and
Enhance shareholder value.

The Group’s four business platforms, Oil & Gas, Underground Mining, Power & Water and Infrastructure & Building, deliver services across the project value chain to their respective clients, giving them regional, as well as international exposure in the opportunities they pursue.

The Group’s strategy is to change its business model by enhancing its specialist engineering, commissioning and asset support capabilities to complement its construction activities. These services yield higher margins and carry lower risk than services provided in the construction segment of the project value chain.

The Group will continue to pursue opportunities in the global natural resources market sectors. Currently, internationally focussed platforms (Oil & Gas and Underground Mining) contribute 63% of revenue and 94% of earnings before interest and tax (before corporate costs).


A subdued global economy, weak demand and a slump in commodity prices, especially oil, weighed on the Group’s financial result. Against this background, the Group did well to maintain earnings broadly in line with the previous financial year and is constantly adjusting its cost structures according to market requirements.

Revenue from continuing operations decreased to R30,6 billion (June 2014: R36 billion) and attributable profit of R881 million was recorded (June 2014: R1 261 million, which included R422 million from discontinued operations). Diluted headline earnings per share from continuing operations was 201 cents (June 2014: 205 cents).

The Group ended the financial year with a net cash balance (net of interest bearing debt) of R1,4 billion (June 2014: R1,8 billion). The reduction is mainly due to advance payments not being replaced and acquisition funding.

The Group’s order book at year end was R38,3 billion (June 2014: R40,9 billion). The reduction was mainly due to a decrease in the Oil & Gas platform order book, which was partly offset by an increase in the Underground Mining platform order book, primarily due to the awards of the R4,8 billion Kalagadi Manganese and R3 billion Booysendal projects.

Capital expenditure for the financial year was R425 million (June 2014: R961 million) of which R290 million (June 2014: R671 million) was for expansion and R135 million (June 2014: R290 million) for replacement. Underground Mining incurred the bulk of the expansion capital expenditure, all of which is project related.

The effective taxation rate decreased to 18.4% (June 2014: 33.8%) due to the utilisation of tax losses. Deferred taxation assets were not raised on all taxation losses within the Group.



The Group’s project pipeline is defined below. The timing of these opportunities remains uncertain.

R billions     Pipeline  
June Order Book   Near Orders   Category 1   Category 2   Category 3  
Infrastructure & Building 7,1   2,0   12,0   61,6   40,0  
Power & Water 6,0     14,0   12,7   21,2  
Underground Mining 16,8   5,2   29,2   11,8   22,5  
Oil & Gas 8,4   0,7   20,1   7,6   163,9  
  38,3   7,9   75,3   93,7   247,6  
Near Orders – Tenders where the Group is the preferred bidder and final award is subject to financial/commercial close.
Category 1 – Tenders the Group is currently working on (excluding Near Orders).
Category 2   – Budgets, feasibilities and prequalifications the Group is currently working on.
Category 3   – Opportunities which are being tracked and are expected to come to the market in the next 36 months



R millions Engineering   Construction
& Fabrication
and Other
June 2015   2014   2015   2014   2015   2014   2015   2014   2015   2014   2015   2014  
Revenue 4 679   4 794   705   7 096   2 085   2 466   3 384   2 013   953   1 111   11 806   17 480  
Operating profit/(loss) 666   698   103   428   51   117   389   215   (371)   (432)   838   1 026  
Margin (%) 14%   15%   15%   6%   2%   5%   11%   11%       7%   6%  
Segment assets                                         3 675   3 710  
Segment liabilities                                         2 808   3 649  
People                                         2 495   4 918  
LTIFR (Fatalities)                                         0.24(0)   0,35(1)  
Order Book 4 405   7 971     1 014   832   2 437   3 209   5 292       8 446   16 714  
5 With effect 1 July 2014, Marine is reported under the Oil & Gas platform under Global Marine

FINANCIAL PERFORMANCE: The significant fall in the oil price had an immediate impact on the platform’s business. Clients moved to reduce project scope, renegotiate contract prices and defer longer-term investment decisions, both in Australia and internationally. The financial result should be considered against this background.

Revenue and operating profit reduced to R11,8 billion (June 2014: R17,5 billion) and R838 million (June 2014: R1 026 million) respectively and the platform’s operating margin improved to 7% (June 2014: 6%), the top-end of the Group’s aspirational margin range, whilst the order book decreased to R8,4 billion (June 2014: R16,7 billion).

OPERATIONAL PERFORMANCE: Major works were successfully completed on various projects in Australasia. In Australia, as the Liquefied Natural Gas (“LNG”) construction boom draws to an end, the future work stream has returned to a more conventional profile, representing projects of shorter duration and reduced value. This order book impact is buffered by the platform’s market-leading share of the growing commissioning market in Australia.

The commissioning business, e2o, continued its strong growth trajectory, performing work for the Gorgon, Wheatstone, Ichthys, APLNG and Gladstone LNG projects, with revenues growing by 92% in the year under review.

Two small engineering services companies were acquired during the financial year. The US-based CH-IV International grew in line with expectation, securing significantly larger contracts than prior to the acquisition, including two owners’ engineering contracts for US LNG projects, Magnolia and Freeport. Scotland-based Booth Welsh, also continued to grow, primarily due to increased work for existing customers.

During the year, the BAM Clough joint venture, providing marine design and construction services to the Australian and Papua New Guinea markets, completed three major jetty projects. The Clough AMEC joint venture, providing brownfields services, successfully completed scheduled shutdowns during the financial year.

OUTLOOK: The platform will continue to focus on expanding its Engineering, Procurement and Construction (“EPC”) services to new growth regions, particularly North America and Africa. The Commissioning and Brownfields division will target the developing Australian brownfields market, which is expected to grow to a US$5 billion per annum market as the new LNG facilities become operational.

The Marine design and construction business, as part of the Infrastructure & Marine division, will pursue jetty projects in Australia and internationally, with significant opportunity to leverage Murray & Roberts’ presence and reputation in Africa. Expansion into the government infrastructure sector in Australia is also a key focus for this division, with a number of near-term opportunities being pursued.


R millions Africa Australasia Americas Total  
June 2015 2014 2015 2014 2015 2014 2015 2014  
Revenue 3 770 3 111 830 699 2 965 2 818 7 565 6 628  
Operating profit 117 57 61 49 233 152 411 258  
Margin (%) 3% 2% 7% 7% 8% 5% 5% 4%  
Segment assets 1 170 1 060 620 636 1 613 1 415 3 403 3 111  
Segment liabilities 1 064 987 119 127 596 637 1 779 1 751  
People 5 745 6 157 659 492 1 168 1 037 7 572 7 686  
LTIFR (Fatalities) 2.25(2) 2.18(1) 0.0(0) 0.97(0) 1.67(1) 0.78(0) 2.00(3) 1  
Order book 11 877 6 157 1 812 556 3 158 3 255 16 847 9 938  

FINANCIAL PERFORMANCE: The impact of weak commodity prices contributed to the platform’s weaker performance from 2012 through to 2014. Despite challenging market conditions, mining companies’ ongoing infrastructure replacement spend to sustain their operations, contributed to the platform’s robust performance in the year under review.

Revenues increased to R7,6 billion (2014: R6,6 billion), and operating profit increased by 59% to R411 million (June 2014: R258 million). The platform’s overall margin is now within the Group’s target margin range of 5% to 7%. The order book also showed strong growth to R16,8 billion (2014: R9,9 billion).

OPERATIONAL PERFORMANCE: Murray & Roberts Cementation progressed its Africa-strategy through its Kitwe office in Zambia, strengthening its presence in the region and providing a springboard into sub-Saharan Africa. In South Africa, the challenging Impumulelo Project for Sasol is nearing completion, and the large Venetia Project for De Beers is performing to expectation.

The award of the Booysendal and Kalagadi Manganese contract mining projects substantially improved Murray & Roberts Cementation’s order book. Work on the Kalagadi Manganese contract is expected to commence in the second half of FY2016.

Market conditions in Australia remained tough, particularly for large-diameter raise boring work. Positive developments included a significant increase in the scope of work at the Freeport project in Indonesia, and the awards of the Saracen Minerals Karari mine development and Xstrata’s Lady Loretta shaft sinking projects.

Cementation USA, reporting a full order book, continued to perform well at Lundin’s Eagle mine and Rio Tinto’s Kennecott mine. Despite a soft market, Cementation Canada demonstrated the value of its engineering capability and project delivery track record by securing the R1,2 billion Compass Minerals Goderich shaft rehabilitation project.

OUTLOOK: Continuing demand for infrastructure replacement work on operating mines, which historically represented more than 80% of this platform’s work, is being experienced across all regions. There is a large pipeline of underground mining projects, including new mine developments, and the platform is well positioned with its global footprint and through its established relationships with top-tier mining clients active in all key commodities, to benefit from these opportunities as and when the commodity cycle turns.


R milions Power
Engineering7 Total  
June 2015 2014 2015 2014 2015 2014  
Revenue 3 154 3 685 1 084 1 070 4 238 4 755  
Operating profit/(loss) 189 238 (323) (94) (134) 144  
Margin (%) 6% 6% (30%) (9%) (3%) 3%  
Segment assets 845 1 130 1 019 571 1 864 1 701  
Segment liabilities 719 1 111 469 327 1 188 1 438  
People 4 995 6 097 1 279 1 628 6 274 7 725  
LTIFR (Fatalities) 0.36(0) 0.89(0) 0.40(0) 0.44(0) 0.37(0) 0.8(0)  
Order Book 5 194 5 503 804 657 5 998 6 160  
6 Power programme contracts and Genrec power programme contracts.
7 Includes Electrical & Control Systems, Resources & Industrial, Water and Power & Energy non-power programme projects and Genrec non-power programme contracts.

FINANCIAL PERFORMANCE: Market conditions and operational requirements resulted in a major restructuring of this platform, previously called Energy & Industrial, and was renamed Power & Water. Two businesses, Murray & Roberts Resources & Industrial and Murray & Roberts Electrical & Control Systems were merged with Murray & Roberts Power & Energy, following poor operational performance and their inability to secure meaningful projects in a subdued market. The platform’s market sector focus has been narrowed to predominantly the power and water sectors.

Revenues decreased to R4,2 billion (June 2014: R4,8 billion), whilst an operating loss of R134 million (June 2014: R144 million operating profit) was recorded. Profit from the power and water businesses was eroded by business development costs and project losses in the two now restructured businesses, as well as related restructuring costs. The order book decreased marginally to R6 billion (June 2014: R6,2 billion), of which 87% relates to the power programme.

OPERATIONAL PERFORMANCE: The platform remains dependent on its primary power projects, Medupi and Kusile, where it is undertaking boiler erection work for Mitsubishi Hitachi Power South Africa. Work was completed on the re-heater and super heater at Kusile boiler 1 and Medupi boiler 5. Medupi boiler 6 successfully synchronised with the national grid and is delivering its designed output of 800MW.

In line with its focus on providing repair, operations and maintenance services to the power market, the platform (through its joint venture with WorleyParsons), undertook planned shutdowns and repairs of industrial boilers in South Africa, Mozambique, Malawi and Swaziland. The platform successfully completed maintenance shutdowns for private power station clients in Southern Africa, and will continue to pursue opportunities directly with Eskom.

During the year, Murray & Roberts Water successfully completed the front-end engineering and design work for a mine water treatment project in Ghana, and provided containerised water filtration units in Kenya. The platform also acquired a specialist water treatment company, Aquamarine, to further realise water opportunities on the continent, specifically through Aquamarine’s extensive sales network in Africa.

After having completed the steel fabrication for Medupi and Kusile, Genrec is operating in a market with weak demand for heavy structural steel. It is extending its product line to the mining sector and successfully completed repairs on truck load bodies and dragline buckets. During the financial year it also secured several small refurbishment contracts for the Matimba power station in Limpopo province, which are progressing well.

OUTLOOK: The Department of Energy’s Baseload Coal IPP Programme was announced in 2015 and presents significant opportunity, which will be pursued in partnership with key technology vendors. The platform is also well positioned for opportunities in the renewable power sector, such as the Ilanga solar project. Operations and maintenance work in the power sector is another focus area holding strong potential.

Aquamarine’s containerised water treatment systems, which are capacity scalable and highly transportable, are ideal for industrial water treatment and will be promoted into African markets.


R millions Construction Africa Marine5 Middle East Total  
June 2015 2014 2015 2014 2015 2014 2015 2014  
Revenue 6 019 5 740 496 940 940 6 959 7 176  
Operating profit/(loss) 177 (189) 302 28 83 205 196  
Margin (%) 3% (3%) 61% 3% 9% 3% 3%  
Segment assets 2 866 3 172 432 2 669 2 001 5 535 5 605  
Segment liabilities 2 458 2 542 198 2 411 1 988 4 869 4 728  
People 6 547 8 357 152 6 552 8 711 13 099 14 220  
LTIFR (Fatalities) 1.18(1) 0.87(2) 0(0) 0.06(0) 0(0) 0.58(1) 0.5(2)  
Order Book 4 874 5 881 125 2 216 2 073 7 090 8 079  
5 With effect 1 July 2014, Marine is reported under the Oil & Gas platform under Global Marine.

FINANCIAL PERFORMANCE: The platform reported a profit for the second consecutive year under continuing difficult market conditions.

Revenues decreased marginally to R7 billion (June 2014: R7,2 billion), while operating profit increased to R205 million (June 2014: R196 million). The core construction business, excluding the Bombela Concession Company (“BCC”) fair value adjustment, remained profitable. The order book decreased to R7,1 billion (June 2014: R8,1 billion), but is of a better quality than in previous years due to an improved margin to risk balance.

OPERATIONAL PERFORMANCE: In FY2015, Murray & Roberts Buildings completed seven shopping centres throughout South Africa and Namibia. Although its financial performance varied across these projects, it has established itself in the delivery of shopping centres.

Murray & Roberts Infrastructure delivered a reasonable performance. The local market is presenting several opportunities for roads projects, although there is limited demand for major civil works, given the low volume of both public and private sector investment in civil construction. The business is participating in renewable energy projects and has been awarded the civil subcontract work on three new wind farms, which have recently achieved financial close.

Concor Opencast Mining has delivered an acceptable operational performance, but is faced with a constrained market environment with a scarcity of new prospects.

Murray & Roberts Middle East’s Tech 4 Building project in Qatar, involving the design and construction of Phase 2 of the technology and workshop facility campus, is progressing well and a new hotel project was secured in Oman. The Mafraq hospital project in Abu Dhabi, has been particularly challenging.

During the year, the platform cautiously re-entered the residential property market with two developments in progress.

OUTLOOK: The platform is largely dependent on opportunities in South Africa, and meaningful growth is subject to increased government and private sector investment.

To mitigate against the risk of low margins and a soft construction market, the platform will pursue select opportunities in the upstream and downstream segments of the project value chain. This will be achieved through participation in select property development opportunities and projects outside South Africa.


R millions Tolcon Steel
Clough Marine
Services &
June 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014
  89 414 2 113 3 12 2 (6) 1 484 88 2 025
Operating profit/(loss) 18 50 14 47 (4) (45) 6 (9) 522 19 580
8 Includes Hall Longmore and UCW.


The safety of its employees is of specific importance to the Group. Good safety performance is not only a moral obligation, but it positions the Group as a contractor of choice.

The board of Murray & Roberts (“Board”) deeply regrets the death of four (June 2014: 4) employees (three employees and one subcontractor) who sustained fatal injuries whilst on duty. The Group’s lost time injury frequency rate (“LTIFR”) was maintained at an industry-leading level of 0.79 (June 2014: 0.80).

During the new financial year, the Group will be implementing a Major Accident Prevention programme in order to mitigate fatal risks in its operations.



Gorgon Pioneer Materials Offloading Facility (“GPMOF”) – The claim process has been closed out and the final payment was received in October 2014. The certificate for final completion is being issued and the guarantees have been returned.

Gautrain Sandton Cavern Claim – This claim, on its merits, was ruled in favour of the Bombela Civil Joint Venture (“BCJV”) in October 2013. The quantum award is expected during September 2015.


Gautrain Water Ingress Dispute – In November 2013, in the dispute between Gauteng Province and BCC, the arbitration panel ruled in favour of Gauteng Province. The Company raised a provision of about R300 million in the prior financial year for its share of potential construction costs to be incurred by the BCJV (Murray & Roberts shareholding of 45%). The extent of any other potential financial impact, if any, related to the matter is yet to be determined. Various matters between the parties, relating to the arbitration award, remain unresolved and will be heard in court. Consequently, the timing of any future work is uncertain.


Gautrain Delay & Disruption Claim – The legal process in this multi-billion rand claim is progressing. Due to the complexity of this arbitration, the initial arbitration hearings were focussed on addressing the legal interpretation of various clauses in the Gautrain concession agreement.

The Group reported on 8 July 2015 that the first two arbitration rulings (the right to proceed with a claim for additional costs incurred on two cantilever bridges and to an extension of time and compensation due to late handover of land) were largely in favour of the BCC. The legal bases of these claims have now firmly been established. It is important to note that the merit and quantum hearings will only be heard as from the first quarter of calendar year 2016 with financial conclusion only likely the following year. Any award will attract interest dating from 2009 to the date of award.

Dubai International Airport – The arbitration process for the Dubai International Airport claim is ongoing. A process of amicable engagement with the Dubai government is running in parallel with the legal proceedings. The claim is expected to be resolved during the 2016 calendar year.


The Board has considered and approved a new dividend policy. The dividend payment is subject to an annual review as distributions may be influenced by global market conditions, possible merger and acquisition activity and/or relative balance sheet strength. In terms of this policy the Board will consider paying an annual dividend, of between three and four times earnings cover.

The Board has declared a gross annual dividend of 50 cents per ordinary share in respect of the year ended 30 June 2015 and will be subject to the dividend tax rate of 15%, which will result in a net dividend of 42,5 cents per share to those shareholders who are not exempt from paying dividend tax.

The dividend has been declared from income reserves.

In terms of the Dividends Tax effective 1 April 2012, the following additional information is disclosed:

The number of shares in issue at the date of this declaration is 444 736 118 and the Company’s tax reference number is 9000203712
Last day to trade (cum-dividend) Friday, 2 October 2015
Shares to commence trading (ex-dividend) Monday, 5 October 2015
Record date (date shareholders recorded in books) Friday, 9 October 2015
Payment date Monday, 12 October 2015

No share certificates may be dematerialised between Monday, 5 October 2015 and Friday, 9 October 2015, both dates inclusive.

On Monday, 12 October 2015, the dividend will be electronically transferred to the bank accounts of all certificated shareholders where this facility is available. No dividend cheques will be paid to shareholders who have not provided their banking details to the transfer secretaries: Link Market Services. Accordingly, the cash dividend will remain unpaid until such time as the shareholder has provided their relevant banking details to the transfer secretary, to receive the cash dividend by electronic funds transfer. No interest will be paid for unpaid dividends.


The Group has been fortunate to attract some exceptional independent non-executive directors to our Board. Mr. Ralph Havenstein was appointed to the Board on 1 August 2014, as chairman of the health, safety & environment committee and is a member of the social & ethics committee. Dr. Suresh Kana, was appointed to the Board on 1 July 2015 and is a member of the audit & sustainability and remuneration & human resources committees. Dr. Xolani Mkhwanazi, joined the Board on 1 August 2015 and is a member of the risk management committee.

Mr. Michael McMahon stepped down from the health, safety & environment and the remuneration & human resources committees during the year, but continues to serve as chairman of the risk management committee and is a member of the nomination and audit & sustainability committees.

Mr. Bill Nairn retired from the Board with effect from 1 January 2015. The Board thanks Mr. Nairn for his contribution to the Company over the last five years and wishes him well.


The Group expects a more challenging FY2016 and the declining order book over the past two years reflects the reality of a subdued global economy and weak demand for commodities, coupled with low investment in fixed capital formation in South Africa. Consequently, earnings for FY2016 will come under pressure.

The natural resources market sectors are cyclical and despite more difficult trading conditions expected in the financial year ahead, the Group is well placed to realise its vision for 2020.

Our balance sheet strength will enable us to extend the success of our bolt-on acquisition strategy, as we grow our capability to provide services in all segments of the project value chain.

The information on which this prospects statement is based has not been reviewed and reported on by the Group’s external auditors.

Mahlape Sello
Chairman of the Board
Henry Laas
Group Chief Executive
Cobus Bester
Group Financial Director

26 AUGUST 2015

# The operating performance information disclosed has been extracted from the Group’s operational reporting systems. The Corporate & Properties segment is excluded from the operational analysis. Unless otherwise noted, all comparisons are to the Group’s performance as at and for the year ended 30 June 2014.