Our opinion on the current state of M&R-HLD(MUR)Murray and Roberts (MUR) is a large South African construction company that has faced significant challenges over the years, including the sub-prime crisis and a slump in construction spending following the 2010 World Cup. These issues caused the share price to fall from a double-top formation around R100 per share to a low below R5 in May 2020. The company has since focused on consolidating and reducing costs. It has rebranded itself as 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 the sale of its Australian operations (65% of Insig Technologies) for A$1, effectively disposing of A$7 million in liabilities. On 8th December 2023, it was reported that the company would reduce its debt from R2 billion in April 2023 to R350 million, aided by Cementation Canada Inc.'s renewed banking facility agreement with a Canadian bank, providing CAD40 million.
In its results for the year to 30th June 2024, the company reported revenue of R13.5 billion, up from the previous year's R12.5 billion, but an attributable loss of R138 million. The net asset value fell to 350 cents per share, down from the previous year's 407 cents. The company noted, "Reduced diluted continuing headline loss per share 24 cents (FY2023: 71 cents loss) - Net cash, including advance payments and working capital improvements R0.4 billion (FY2023: R0.3 billion net debt)."
In a trading statement for the six months to 31st December 2024, the company estimated that HEPS would fall by at least 20%, causing the share price to enter a new downward trend. Despite these struggles, the company announced on 15th July 2024 that it had secured a $200 million multi-year contract in Latin America, providing a potential lifeline for its operations.
On 22nd November 2024, the company's board of directors announced that MUR met the Companies Act definition of being "financially distressed" and that the best course of action was to enter into business rescue. As a result, trading in the company's shares was suspended on the JSE.
On 20th January 2025, the company reported that it had secured an additional R250 million in funding, which may provide some relief as it navigates its financial difficulties. However, MUR remains a high-risk investment with significant debt and operational challenges.
