B&W Instrumentation and Electrical (“B&W”) made good on its promise to investors and returned to profitabilityin the six months toFebruary 2012.The significantly improved results for the period further reflect a healthier cash position, and the group expects to be cash neutral by year-end. The order book stood at a respectable R246 million at the end of the period.
Despite a decrease in revenueto R273 million from R387million, B&W reversed its after tax loss at the 2011 year-end into a R0,3 million profit. The bottom line turnaround translated into earnings per share of 0,1 cents, compared to the loss per share of 7,8 cents at year-end.
CEO Brian Harley says B&W is now “back on track” and well positioned to capitalise on a recovering construction sector. “The group’s financial position and project health have completely recovered from those of 18 months ago, with positive prospects ahead,” he says.
B&W launched a Small Projects division during the periodwhich has already proved successful. “We have secured several small contracts, providing acceptable margin returns over the next four to six years with no further capex investment on our side,” says Harley. He adds that these projects will offset the negative impact ofany delays in the award of larger projects.
Towards the end of 2011 B&W garnered R34 million worth of work in the mining sector, and in the first weeks of 2012 further secured a R23 million project in the oil & gas sector. Projects to the value of R17,0 million have since been secured of which R8,3 million relates to oil & gas.
Lighting and earthing specialist Pontins, the group’s newest business, maintained its strong performance. Harley says B&W is confident of a continued contribution to group results.
Renewable energy is a key focus for the group going forward and B&W is currently investigating potential contracts in this sector. “We are also exploring commercial and infrastructure opportunities, all in South Africa and Africa.”
Harley concludes that the group has successfully turned around after a difficult period, resolving cash flow constraints and progressing well with the intended consolidation. “The outlook for 2013/14 is bright,” says Harley. B&W is currently in the process of cementing its five-year strategic plan. B&W’s share closed Friday at R0.76.