Wilson Bayly Holmes-Ovcon (WBHO) has reported solid growth in its operations for the period ending December 2024, with a 10% increase in group revenue, rising to R14.7 billion.

Despite facing challenges in various international markets, the group has continued to benefit from robust performance in South Africa, particularly in the country’s coastal areas.

Key Highlights

-Group Revenue: Increased by 10% to R14.7 billion
-Operating Profit: Rose by 15% to R695 million
-Headline Earnings Per Share: 19.5% increase to 1,072 cents per share

WBHO’s board has declared an interim gross dividend of 300 cents per share, reflecting a 30% increase from the previous year.

Performance in South Africa

Activity in South Africa has remained strong, WBHO said, particularly in its Roads and Earthworks division, which recorded a 19% increase in revenue. The company’s Building and Civil Engineering divisions also saw moderate growth.

The Western Cape and Kwa-Zulu Natal (KZN) regions enjoyed strong markets, resulting in heightened activity, however, the Gauteng market experienced a softening of building activity, though forward-looking projections for the region remain positive, it said.

Internationally, WBHO’s operations in the rest of Africa have been promising, with key projects progressing in countries such as Liberia, Ghana, Mozambique, Tanzania, Botswana, and Zambia.

The company’s African operations delivered a segment operating profit of R684 million, marking a 22% year-on-year increase, driven by healthy revenue growth and successful project completions.

In the United Kingdom, however, business confidence has waned since the election of the Labour Government, leading to a decline in investment decisions. Despite these challenges, WBHO achieved stable revenue of R2.6 billion, reflecting satisfactory performance in a tough operating environment.

Building Division

Revenue from WBHO’s Building division increased by 4%, with strong growth in coastal regions (19%) offsetting an 11% decline in Gauteng.

In Gauteng, large-scale projects in data centers, commercial offices, and residential sectors continued, with data centres contributing 21%, commercial offices 52%, and residential 16% of revenue.

Three data centres are under construction, with two expected to be completed this financial year. Major projects include the South African Reserve Bank building and Barlow Park mixed-use development, both expected to finish by year-end.

426 residential apartments at Steyn City should also be complete by 30 June 2025, while the separate contracts for the fit-out of the apartments will continue throughout the next financial year, it said.

In coastal regions, KZN and Western Cape saw strong performances, while Eastern Cape activity slowed after a large warehousing project.

Activity from the industrial building and warehousing sector in KZN has softened over the last 12 months comprising 46% of activity undertaken in the region, compared to 64% in the first half of the comparative period.

New projects within the sector comprise of warehouses for DB Schenker at the Brickworks Business and Logistics Park and for Boxer in conjunction with JT Ross at the Whetstone Industrial Park as well as a design and construct contract for a new warehouse with offices at the Dube Trade Port and a cold storage facility for Maersk.

The balance of work executed was derived from the residential and commercial sectors which contributed 28% and 18% toward revenue in the region respectively.

The Pearls Shore Apartments and the north tower of the Oceans Umhlanga Apartments made up the work within the residential sector.

A large commercial office development on the Umhlanga Ridge comprised activity from the commercial office sector.

In the Western Cape, commercial office and mixed-use developments comprised 42% of activity undertaken, residential and student accommodation developments comprised 27% and the hotel and education centre sectors contributed 10% and 9% respectively.

The Riverland and Century City precincts alongside the Victoria and Alfred (V&A) Waterfront continue to be strong sources of work, complemented by ad hoc projects in the Cape Town CBD and surrounding areas, as well as student accommodation developments in Stellenbosch.

Within the public sector, projects emanating from a framework for the Western Cape Education Departments have provided significant work in the region.

The division is also making good progress, together with teams from the Eastern Cape, on a new 222 bed hospital for Mediclinic in George.

In the Eastern Cape, industrial and warehouse developments dominated, with notable completions including a Shoprite warehouse and cold storage facility at Coega. In the rest of Africa, WBHO is making good progress on a new data centre in Accra, Ghana.

Civil Engineering and Roads

WBHO’s Roads and Earthworks division continued its upward trajectory, achieving a 19% increase in revenue over the reporting period. Revenue from South Africa alone grew by 25%, while the rest of Africa contributed 30% of total revenue.

This growth was driven by strong order book levels and significant infrastructure projects across South Africa and other African markets.

In addition, WBHO’s Civil Engineering division remained steady, with traditional civil engineering markets showing stable results. Notable projects included the completion of the Two Rivers Platinum Mine construction.

The division also benefited from growth in renewable energy projects, which are expected to continue to play a larger role in future revenues.

Looking ahead, WBHO’s order book has expanded by 7% to R32.6 billion, with strong contributions from the Roads and Earthworks division and a promising uptick in the UK order book.

The company anticipates that building activity in the Western Cape and KZN will remain buoyant in the short term, with notable prospects in residential and mixed-use developments.

In Gauteng, WBHO is targeting opportunities in the education and healthcare sectors, as well as new data centre projects.

The company also has its sights set on major projects in Botswana, Eswatini, and the Eastern Cape, where recent awards in healthcare and hotel sectors are expected to drive future growth.