Basil Read has restructured some of its operating divisions as part of a plan to maintain group turnover at current levels after the conclusion this year of the bulk of the work on the first phase of the R4.6 billion St Helena airport contract.
|||Johannesburg - Basil Read has restructured some of its operating divisions as part of a plan by the listed construction group to maintain group turnover at current levels after the conclusion this year of the bulk of the work on the first phase of the R4.6 billion St Helena airport contract.
The project is the group’s current flagship contract and involved developing the island’s first airport for the St Helena government and the UK Department for International Development.
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The first phase of the project to design and construct the airport commenced in December 2011 and is now largely complete. The second phase involves Basil Read and partner Lanseria Airport operating the airport until 2026.
Come to an end
Chief executive Neville Nicolau said yesterday that the bulk of the work on phase one of the St Helena airport project and the Olifants River resource development project would come to an end this year.
He said plans were already in place to grow the group’s other divisions to maintain turnover at current levels and encouraging growth could already be seen by the awarding of new projects in the group’s mining and roads divisions.
He said new contracts awarded to the mining division included a R550 million five-year contract to provide comprehensive mining services to the Lerala Diamond Mine in Botswana and the 60-month extension of its Venetia Mine drilling contract, which is valued at R600m.
The group did not provide any details of the roads contracts awarded.
Nicolau said a decision was made to separate the buildings and developments division into two separate reporting divisions, because the developments division was viewed as a strategic differentiator due to the package that the Basil Read mixed use integrated housing development proposed for an integrated society.
“This model also generates work for our other construction divisions in the form of bulk infrastructure, road infrastructure, civils and building works. The division is perfectly aligned with government’s intention to accelerate housing delivery over the next five years,” he said.
Nicolau added the civils division was core to Basil Read and included plant that could be used across the company and the pipelines division had been consolidated into the civils division because the Olifants River water resource development project was housed in the civils division and the overlap in skills and other projects.
“The combination of skills and resultant synergies leaves Basil Read well placed to tender successfully on civils works, particularly relating to our focus area of water and sanitation purification projects, where the need to improve infrastructure is high,” he said.
No transition
Basil Read has not announced any success with its plan to try to transition the St Helena project team into another major project.
Nicolau warned in August last year if the group was unsuccessful in doing this, it would have to adjust the company size and its operating overheads “to the new size of the company”.
Basil Read yesterday reported a return of the group to profitability in the year to December despite revenue from continuing operations contracting by 12 percent to R5.5bn from R6.3bn.
Headline earnings a share improved to 143.87 cents from the headline loss a share of 298.08c in the previous year.
Shares in Basil Read dropped 2.03 percent on the JSE yesterday to close at R3.38.
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