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Australian business lifts profit at South Africa’s WBHO

Reporting a 23.8% rise in full-year profit.

Wilson Bayly Holmes-Ovcon (WBHO), South Africa’s biggest construction firm by market capitalisation, reported a 23.8% rise in full-year profit on Tuesday as a strong performance in Australia offset slow growth at home.

WBHO said in a statement that headline earnings per share (HEPS), South Africa’s main profit gauge that excludes certain one-off and non-trading items, increased to 1,343 cents in the year to the end of June from 1,085 cents.

“Markets were once again characterised by strong Australian building markets and subdued civil engineering markets globally,” the company said.

The builder of Mall of Africa in Midrand, between Johannesburg and Pretoria, said its order book increased 14% to R42.7 billion ($3 billion), reflecting a sharp rise in Australian building orders.

WBHO has focused on Australia where demand for shopping malls, office blocks and residential properties has helped cushion the impact of slower domestic public sector spending and cut backs from the mining industry.

Its African order book, which includes South Africa and other sub-Saharan countries such as Mozambique and Zambia, now accounts for 28% of overall orders compared with 34% a year earlier.

Revenue from WBHO’s South Africa Civil and Engineering division slumped 40% as persistent commodity price weakness continued to curb the number of mining projects, which the division relies heavily upon.

“While conditions within the civil engineering industry are considered to be at the lowest levels seen in many years, positive signs are beginning to emerge,” the company said.

Full-year revenue was up 6.3% to 30.7 billion rand from R28.8 billion in 2015.

WBHO declared a gross dividend of 448 cents per share, up 22% from 368 cents a year earlier.

Shares in WBHO, which have surged 35% this year, rose 3.60% to 159.54 rand following the results.

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