Our opinion on the current state of M&R-HLD(MUR)
Murray and Roberts (MUR) is a large South African construction company that has suffered from the sub-prime crisis and the slump in construction spending following the 2010 World Cup. This brought the share down from a massive double-top formation at around R100 per share to a low below R5 in May 2020. The company has been consolidating and reducing costs. It has transformed itself into a "...multinational engineering and construction Group focused on the natural resources market sectors..." with three primary business platforms: underground mining, oil & gas, and power & water.
On 27th March 2023, the company announced that it had sold its Australian operations (65% of Insig Technologies) for A$1, thus disposing of A7m in liabilities. On 8th December 2023, the company reported that it would be able to reduce its debt from R2bn in April 2023 to R350m as a result of "Cementation Canada Inc's recently renewed banking facility agreement with a Canadian bank will provide for Cementation Canada to pay CAD40 million."
In its results for the six months to 31st December 2023, the company reported revenue of R6,6bn, up from R5,9bn in the previous period. The company made a headline loss of 16c per share, compared to the loss of 27c made in the previous period. The order book fell from R16,1bn to R14,7bn and net debt reduced to R247m from R1,96bn. The company said, "Interest for the reporting period decreased to R75 million (FY2023 H1: R134 million*) and the tax charge was R81 million (FY2023 H1: R65 million*). Interest is expected to not exceed circa R100 million per annum, as from the new financial year."
Murray and Roberts remains a relatively risky penny stock, but there are signs that it may be on a recovery path. On 15th July 2024, the company announced that it had won a 200m multi-year contract in Latin America.
The company's transformation and recent contract wins suggest potential for recovery, but caution is advised due to its historical volatility and current penny stock status. Investors should monitor the company's performance and news closely for further signs of stabilization and growth.
On 27th March 2023, the company announced that it had sold its Australian operations (65% of Insig Technologies) for A$1, thus disposing of A7m in liabilities. On 8th December 2023, the company reported that it would be able to reduce its debt from R2bn in April 2023 to R350m as a result of "Cementation Canada Inc's recently renewed banking facility agreement with a Canadian bank will provide for Cementation Canada to pay CAD40 million."
In its results for the six months to 31st December 2023, the company reported revenue of R6,6bn, up from R5,9bn in the previous period. The company made a headline loss of 16c per share, compared to the loss of 27c made in the previous period. The order book fell from R16,1bn to R14,7bn and net debt reduced to R247m from R1,96bn. The company said, "Interest for the reporting period decreased to R75 million (FY2023 H1: R134 million*) and the tax charge was R81 million (FY2023 H1: R65 million*). Interest is expected to not exceed circa R100 million per annum, as from the new financial year."
Murray and Roberts remains a relatively risky penny stock, but there are signs that it may be on a recovery path. On 15th July 2024, the company announced that it had won a 200m multi-year contract in Latin America.
The company's transformation and recent contract wins suggest potential for recovery, but caution is advised due to its historical volatility and current penny stock status. Investors should monitor the company's performance and news closely for further signs of stabilization and growth.
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