Raubex, the JSE-listed infrastructure development and construction materials supply group, is salivating at the government’s planned R1-trillion spending on critical infrastructure, saying the mooted outlay is a boost to the company’s outlook.
The group’s positive year-ended February results, which saw its order book approach the R30bn mark, resulted in its share price surging 9% on Monday.
The results showed a 21% increase in revenue to R21bn, while headline earnings per share (HEPS) surged 25% in the period to 599.8c.
The share price rally was also boosted by the company saying it had found no wrongdoing in a whistle-blower’s allegations that there was graft in the group.
The company, worth nearly R10bn on the JSE, said the government’s planned infrastructure spending opened further opportunities for the group to grow its already bulky order book, which stood at R28.18bn at the end of the year under review.
In the budget tabled last month, the Treasury said the government would disburse more than R1-trillion into public infrastructure over the next three years.
Raubex, led by Felicia Msiza, said on Monday that the government’s commitment to infrastructure spending “bodes well for the group”.
The group operates across Southern Africa and Western Australia through its four divisions: materials handling and mining, construction materials, roads and earthworks, and infrastructure.
Raubex’s results for the year ended February showed that revenue for the roads and earthworks division surged nearly 20% to R6.80bn, boosted by government tenders.
The division, which specialises in road construction and earthworks as well as road surfacing and rehabilitation, reported a 77.1% increase in operating profit in the year under review, with a sizable order book of R13.61bn, an increase of 34%.
The division’s order book accounts for nearly half of the group’s R28.18bn order book.
“The major Sanral projects, particularly the upgrade of the KwaZulu-Natal corridor, are operating at full capacity and performing excellently,” Msiza said.
“There has been a slowdown in the release of large new Sanral tenders to the market during the year under review; however, recently the group was awarded a Sanral project to the value of R3.22bn. This new award will replace some of the KwaZulu-Natal corridor work that is coming to an end during the 2026 financial year.”
One of the group’s growth strategies for the road construction and earthworks business is to secure projects from a more diversified customer base.
Msiza said the group had made progress in implementing the strategy.
“Some of the noteworthy projects currently secured and in progress include contracts from the Western Cape provincial government totalling R1.02bn, the KwaZulu-Natal department of transport totalling R1.40bn, the Bakwena N4 Rustenburg Project at R1.30bn, the TRAC N4 Crocodile River Projects at R2.20bn, and various smaller road contracts at mines across the country.”
The group’s infrastructure division, which specialises in disciplines outside of the road construction sector, including energy, reported R6.78bn in revenue, up 27.4%. The division’s operating profit increased nearly 20% to R604m
“The performance was mainly attributable to new contracts secured in SA as well as a solid set of results delivered by Western Australia,” the company said, noting the division secured an order book of R9.09bn – a marginal increase of 5.4%.
“Our focus on privately owned renewable energy projects has been successful, with our two flagship projects in the renewable energy space that deliver solid returns. The largest of these contracts is a cluster of three wind farms to the value of R2.4bn near Murraysburg in the Western Cape.”
Raubex has also been buoyed by the recently awarded tender to refurbish parliament building that was gutted by fire three years ago – forcing legislators to look for alternative venues for fulfil their constitutional obligations.
The company said it expects to conclude the project over 20 months, saying the contract serves as a “solid anchor” for its commercial building division.
“We have recently been awarded a R2.3bn tender to repair and upgrade part of the Parliament buildings in Cape Town, following the devastating fire in 2022,” it said.
“The project involves the demolition of certain old structures and the enhancement of the 18,000m² facility, including upgrades to the information, communication and telecommunications (ICT) systems, as well as security and fire suppression systems.”
The group's materials handling and mining had a disappointing year, with its order book down 26% to R3.74bn, while operating profit plunged 86.2% to R80.7m. The group attributed the poor performance to the underperformance of Bauba Resources mining operations.
The construction materials division, which specialises in the supply of aggregates from commercial quarries, asphalt, and value-added bituminous products, also reported muted performance.
The order book grew just 1.4% to R1.74bn.
“The heavy rains in January and February 2025 severely impacted production and sales at all our quarries, which in turn negatively affected revenue and profit growth towards the latter part of the financial year.”
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