AEG : Update on business performance:
(Incorporated in the Republic of South Africa)
(Registration number: 1944/018119/06)
Share code: AEG
Share ISIN: ZAE000194940
("Aveng" or "the Group")
Update on business performance
1. McConnell Dowell
McConnell Dowell has been awarded new orders to the value of AUD 535 million since 30 June 2019. With these
awards, McConnell Dowell's two-year order book now stands at AUD 1.45 billion, an increase of 26% on the order
book as reported at 30 June 2019. These awards include the following projects:
* Mordialloc Bypass (Australia)
* Echuca-Moama Bridge (Australia)
* Westland Milk Bypass (New Zealand)
* Modbury Hospital (Built Environs)
McConnell Dowell has now secured 90% of the budgeted revenue for the current financial year. These significant
awards have also meant that good progress has been made towards securing orders to meet the budgeted revenue
beyond the current financial year. Additionally, McConnell Dowell has more than AUD 1 billion worth of projects in
The markets in which McConnell Dowel operates remain supportive of the medium-term growth objectives and
management at McConnell Dowell will continue to exercise discipline in terms of selecting opportunities on which to
The business continues to trade profitably, in line with management expectations and has met its budget for the first
quarter of the financial year. This has been achieved as a result of good ongoing project execution, with the project
portfolio delivering profitability outcomes exceeding tendered margins. Continued operational improvement
remains a key focus area for McConnell Dowell.
Moolmans has been able to secure a further contract extension at the Nkomati mine since 30 June 2019. As a result,
92% of the FY20 budgeted revenues have now been secured.
The renegotiation of certain contracts together with the other aspects of the Group-led intervention, as outlined in
the annual results announcement of 29 August 2019, are yielding positive results. The business has returned to
profit during the first quarter and has met budget expectations. This provides a strong underpin to the expected
return to profit for the full financial year.
Management continues to focus on further improving operational performance and pursuing selected new
opportunities to meet its budgeted performance in FY21 and FY22.
3. Non-core disposals
On 4 October 2019, Aveng announced the disposal of the Grinaker-LTA Mechanical and Electrical business to the
Laula Consortium for R72 million. The transaction is subject to the conditions precedent as outlined in the SENS
announcement. This brings the value of announced transactions to R1.1 billion.
Subsequent to this announcement, the Competition Commission has granted approval for the sale of the Grinaker-
LTA Building and Civil Engineering business, announced on 8 August 2019, to the Laula Consortium. The transaction
became unconditional on 1 November 2019.
Discussions with potential buyers for the remaining non-core businesses of Aveng Trident Steel and Aveng ACS are
continuing. The Company expects to have finalised the disposal of all non-core businesses during the course of the
current financial year.
Liquidity and cash management remains an ongoing priority for the Group. The cash flow performance of all
businesses continues to receive a high level of focus, notably the collection of overdue debtors. Whilst the Group
has experienced delays in completing previously announced transactions, the proceeds from the disposal of non-
core assets are expected to contribute to the progressive improvement in the quality of the Group's balance sheet,
with the objective of achieving a sustainable long-term capital structure.
The information in this announcement has not been reviewed or reported on by Aveng's external auditors.
6 November 2019
UBS South Africa Proprietary Limited
Group Executive: Strategy & Investor Relations
Tel: 011 779 2979
Date: 06/11/2019 12:30:00
Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.