Business Day (Johannesburg)
Thabang Mokopanele
3 November 2009
Johannesburg — BROAD-based civil engineering group Protech Khuthele yesterday posted a 24% rise in revenue to R426m for the six months ended August mainly due to volume growth and new contracts.
However, operating profit dropped 15% to R73,9m from R86,6m, while earnings per share slipped 8% to 13,4c from 14,6c.
CEO Gerald Chapman said severe margin erosion was prevented, with a group operating margin of 17,5% compared to a 19% margin in the previous six months. Cash generated by operations after working capital doubled from R26m to R55,4m .
The closing cash balance of R115,9m was up almost fourfold from R31m.
"This period proved the robustness of our business model and our ability to pro-actively shift between sectors to prevent severe margin erosion," Chapman said.
He said the company's blue- chip client base ensured bad debts remained below 1% of revenue. "Contracting will continue to focus on mining to counter weak private and slow public infrastructure sector spend.
"A positive for us is that Protech's projects are of a shorter duration, which prevents us from being tied into long-term low- margin projects."
Chapman said the company had already secured 65% of last year's revenue in current contracts, with total contracts of R982m and a further R300m in imminent contract awards.
"This healthy work stream, together with cash in the bank and continued headroom in our margins, will empower us to tackle market pressures ," he said.
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