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Johannesburg, 19 May 2016 – Despite a challenging trading environment, Stefanutti Stocks produced a reasonable performance this financial year. CEO Willie Meyburgh commented: “We are satisfied with the overall performance of the group given the circumstances, and while the South African construction market remains challenging and competition for available work continues to escalate, we have managed to maintain the order book in most of our divisions.”  

The group’s current order book is R12,7 billion with 38% of the total comprising work from outside of South Africa. This amounts to R4,8 billion.  

Meyburgh said that in spite of the tough environment, the group is of the view that there is potential growth in certain sectors of the economy, providing opportunities for the Roads & Earthworks, Building, Oil & Gas and Electrical & Instrumentation operations. He said that in other sectors, the group remains well positioned to take advantage of the medium-sized projects coming to the local marketplace.  

Despite contract revenue decreasing by R900 million to R9,7 billion (Feb 2015 restated: R10,6 billion), primarily due to a reduction in revenue from the Building business, the group’s operating profit increased from R335 million in the previous year to R392 million in the current year. However, after excluding the profit on sale of the investment property and fair value adjustment, operating profit increased by 10% to R370 million, with the corresponding margin improving from 3,2% to 3,8%.  

A market increasingly characterised by delayed payments and reductions in advance payments received from clients resulted in a material increase in interest-bearing borrowings to R636 million (Feb 2015: R449 million), with an associated increase in the interest charge for the year. This, together with the interest on the third and fourth instalment of the Competition Commission penalty, has had an impact on the group’s finance costs for the year. When compared with the prior year, the combined impact of the increase in the finance costs and a decline in the profits of equity accounted investees, from R33 million to R19 million, has resulted in a similar after tax profit, from continuing operations, of R265 million (Feb 2015 restated: R265 million).  

Earnings per share from continuing operations of 149,3 cents (Feb 2015 restated: 150,4 cents) and diluted headline earnings per share from continuing operations of 128,4 cents (Feb 2015 restated: 136,5 cents) decreased by 0,7 % and 5,9%, respectively. Capital expenditure for the year amounted to R157 million (Feb 2015: R186 million) of which R82 million (Feb 2015: R66 million) was incurred for maintaining capacity.  


No dividends were declared.  

During the year, the group, through a subsidiary, repurchased 1 383 792 of its own shares at an average price of R3,47 per share in and disposed of its 49% investment in Zener Steward Electromechanical LLC (“Zener”) due to deteriorating market conditions in the Middle East.  

Post-year end, the group acquired an effective 74% stake in two empowered construction businesses active in the South African petrochemical market, KLB Mkhize Electrical Projects Proprietary Limited, an electrical and instrumentation company, for a purchase consideration of R7 million and Celik Engineering Proprietary Limited, a mechanical and structural piping engineering company for a purchase consideration of R2 million.  

He concluded by saying that the group’s multi-disciplinary and geographically diversified business structure continues to provide a robust platform upon which Stefanutti Stocks is able to position itself as a strong competitor in the Southern African construction market. “We will continue to look for opportunities both in Southern Africa and on a more selective basis further afield in sub-Saharan Africa, where our primary focus will be to increase our footprint in countries where we already have established a presence. There are potential cross border contract awards in the short to medium term that will improve the order book.”  

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Contact:   Stefanutti Stocks Holdings Limited  Willie Meyburgh (CEO) – (011) 571-4367  Issued and released by:   Keyter Rech Investor Solutions  Lynne Bothma 087 351 3815 / 082 920 4395  Issue date:  19 May 2016  JSE code:  SSK  Web-site:

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