Johannesburg — CIVIL engineering and construction group Sanyati Holdings has beaten its pre-listing forecasts by 6,1% to post solid results for its maiden year to February.

Management attributed the strong performance to buoyant market conditions. The group recorded net profit of R24,2m after forecasting R22,7m when it listed on AltX in June last year.

Revenue increased 47% to R379,6m from R259m. The group had forecast 65% growth to R430m.

Headline earnings a share of 1178c exceeded forecasts by 6,2%.

CEO Rick Jackson said profitability leapt ahead of forecasts despite revenue dipping 11,2% lower than expected.

He said margins were high particularly in its Sanprop division because of growth in commercial property developments, which offset the lower than forecast revenue.

He said the drop in forecast revenue was caused by unusual weather conditions that saw projects delayed and the slow award of anticipated road surfacing contracts at the start of the year.

African Construction remains the group's primary contributor to revenue. The subsidiary secured major contracts including a R134m upgrade of a tourist road linking Barberton to Bulembu for Mpumulanga's transport department and a R37m Umgeni Water contract.

"Most of the remaining divisions also performed well in the face of challenging conditions and further bolstered the group's order book," said Jackson.

The group's R195m acquisitions of civil engineering specialists Ruthcon Civil Contractors and GEM Earthworks, concluded in April, expanded the group's footprint outside KwaZulu-Natal and into Gauteng, Eastern Cape and Mpumulanga, establishing a presence for Sanyati in five provinces.

"The acquisitions have already proved a good contributor to future revenue growth," said Jackson.

Ruthcon was recently awarded a civil engineering contract worth R37m for the Ngwenya River Estate and another R39m for the Eye of Africa Golf Estate.

"With Ruthcon's proven ability to deliver quality work quickly it is ideally suited to both contracts as they require completion within seven months," said Jackson.

He said the acquisitions followed on the earlier purchase during the year of Mega Pile (formerly KZN Piling) for R49,2m, which enhanced Sanyati's capacity to service increasing demand from the construction sector. To help fund the acquisitions, the group recently issued 48-million shares to empowerment enterprises, pushing its empowerment shareholding to 42%.

The group said it was confident that it would meet forecasts of R1bn turnover for the year ahead as 90% of its order book was already secured only two months into the new financial year.

"This is attributable to a combination of factors -- good organic growth capitalising on strong BEE credentials, an ISO 9001 accreditation, the multiple benefits of our acquisitions and market conditions returning to anticipated levels of activity as climate conditions normalise," said Jackson.

Sanyati's share debuted at R1,48 in June last year and closed the year at R2,33. Yesterday it closed 1,89% firmer at R2,70.