Sanyati

Interim Results Impacted by Difficult Trading Conditions

25/10/2010 12:00:00 +0200

Sanyati, a civil engineering group, has also felt the impact of the difficult trading conditions experienced by all the domestic construction companies over the last couple of months.

Revenue decreased by 17% to R855 million
EBITDA decreased by 46% to R44 million
Fully diluted HEPS from continuing operations increased by 48% to 4.8 cents
Net tangible asset value per share increased by 10% to 64.8 cents

Introduction
Sanyati, a civil engineering group, has also felt the impact of the difficult trading conditions experienced by all the domestic construction companies over the last couple of months.

Malcolm Lobban, CEO of Sanyati, commented that: “Our results mirror the numerous challenges faced by the Group during the six months ended 31 August 2010. These challenges ranged from margin pressure, unprecedented delays in the awarding and mobilisation of key contracts to the rightsizing action undertaken by the Group.”

Notwithstanding these challenges faced by Sanyati, the Group achieved positive outcomes with the securing of a significant new order book of R950 million and a pipe line of imminent awards amounting to R87 million. Sanyati also indicated that the Group has a strong prospective order book of R1.8 billion as at 31 August 2010. “We stated that our aim was to focus on geographic diversification and to set-up niche contracting opportunities to counter the depressed construction market and we can report that good progress was made with achieving these aims,” stated Lobban.

Financial overview
The results of the Group’s continuing operations reported a decrease in revenue of 16.6% to R855.3 million for the period ended 31 August 2010 and a decline of 46.2% in earnings before interest, taxation, depreciation and amortisation (EBITDA) to R44.3 million. Major contributors to the decline in EBITDA included revenue and margin contraction, holding costs associated with delays in awards and mobilisation of contracts, retrenchment costs and a particularly difficult environment for the Group’s piling and concrete sliding businesses. As a result, Group EBITDA margin of 5.2% was materially below the 8.0% that was achieved in the comparative period to 31 August 2009. The Group’s operating profit before interest and taxation of R35.2 million was 47.8% higher than the result achieved to 31 August 2009. This must be seen in the light of the R50.2 million change in accounting estimate that was charged to income during the six months ended 31 August 2009.

Basic earnings per share (EPS) and fully diluted headline earnings per share (HEPS) for continuing operations increased by 58.7% and 48.0%, respectively, a satisfactory performance.

The statement of financial position reflects a 3.1% increase in total equity from R766.8 million as at 28 February 2010 to R790.2 million. Net interest-bearing borrowings as at 31 August 2010 amounted to R97.2 million, which translates into a more than acceptable net gearing ratio of 12.3%. Cash generated by operations, before working capital, was a credible R45.9 million. The net investment in working capital of R33.5 million during the period was not unexpected and was a consequence of a new mix of business together with the life cycle of certain key projects. Lobban said that: “We are also experiencing some delays with payment from certain public sector clients. Also impacting the Group’s cash flows was the payment of an amount of R20 million to the Meyker vendors (“agterskot” payment following delivery of post acquisition profit thresholds) and an aggregate of R21 million paid in accordance with existing instalment sale agreements.”

Operational review
Sanyati Central reported solid growth of 33.1% in revenue from R279.8 million (August 2009) to R372.5 million in this reporting period. Due to a low margin being realised on a major roads project due to be completed in December this year, delays on the mobilisation of a key contract as well as the challenging market conditions, EBITDA is down to R23.3 million with a resultant EBITDA margin of 6.3%.

Sanyati Coastal, which incorporates the KwaZulu-Natal building construction activity previously reported as part of Specialist Contractors, reported a decrease in revenue of 25.3% to R282.4 million and an EBITDA of R16.0 million was generated. A satisfactory EBITDA margin of 5.7% was achieved.

Primarily as a result of the delay with the mobilisation of a key contract coupled with the ongoing challenges of a highly competitive tender market,Sanyati North delivered disappointing results for the past six months. Revenue and EBITDA decreased by 47.2% to R161.0 million and 63.7% to R9.9 million, respectively. The EBITDA margin also decreased from 9.0% in the previous period to 6.2% for this reporting period.

Specialist Contractors, which include Sanyati Conform, Sanyati Piling & Geotechnical and Sanyati Properties, continued to be impacted by tough trading conditions. Combined revenue of R45.6 million and a loss before interest, taxation, depreciation and amortisation of R4.9 million were reported. Both Sanyati Conform and Sanyati Piling & Geotechnical have undertaken corrective action to rightsize the businesses. There is an ongoing drive for Sanyati Properties to convert its property assets into cash.

Prospects
Lobban said that: “The well publicised industry experience of unprecedented delays in both the award and mobilisation of contracts continues to represent a challenge for Sanyati. We nevertheless remain confident that the underlying fundamentals and initiatives undertaken by the Group will ensure medium and long term growth for the business.”

Telecommunications infrastructure spend, both in South Africa and the rest of Africa, by large corporate companies is gaining momentum, hence the diversification into the laying of fibre optic cables. Sanyati has also been able to secure new opportunities in mining infrastructure as well as design, construct and finance solutions for clients.

In September 2010, Sanyati acquired a strategic interest in Africa Pipe Industries (Pty Limited. This business is a world-class manufacturer of spiral steel pipe primarily for the water industry in South Africa and the Group is excited about the prospects of this investment.

Sanyati has a continued emphasis on strategic partnerships and alliances. The improved Level 3 Contributor BBBEE status achieved by Sanyati in June 2010 is testimony to Sanyati’s drive to be a “Partner of Choice”.

“The Group will continue to focus on cash management and the conversion of its pipeline of opportunities into a confirmed order book in the period ahead,” concludes Lobban.

Issued and released by: Keyter Rech Investor Solutions

Marlize Keyter (011) 447-5204 / 083 701 2021

Sheri Cohen (011) 447-7903 / 071 683 1888

Contact: Sanyati Holdings Limited

Malcolm Lobban (CEO) – 082 900 6569

John Deeb (CFO)

Tel: 0861 726 4653

Sanyati`s performance underpinned by strong civil engineering businesses

18/05/2010 12:00:00 +0200

Sanyati, South Africa’s broad-based empowered listed civil engineering and construction group, produced an impressive set of results despite difficult trading conditions in the domestic construction market.

Revenue up 42% to nearly R2.0 billion

EBITDA up 66% to R173 million

EBITDA margin 8.6% compared to 7.4% in 2009

Normalised fully diluted HEPS from continuing operations up 15% to 23.5 cents

Strong cash flow from operations of R116 million

Net debt to equity ratio of 9.8%, down from 17.0% at 28 February 2009

Introduction
Sanyati, South Africa’s broad-based empowered listed civil engineering and construction group, produced an impressive set of results despite difficult trading conditions in the domestic construction market. Malcolm Lobban, CEO of Sanyati, said "The highlight of these results was undoubtedly the performance of our three regional civil construction businesses. They all achieved strong growth this year and most importantly delivered on a number of challenging projects throughout the country.”

Financial overview
During the year under review, total revenue increased by 42% to R1 997 million, resulting in an operating profit (EBITDA) of R173 million, 66% up on the previous period. This translated into an EBITDA margin of 8.6%, an increase of 16.2% from the 2009 EBITDA margin of 7.4%.

The core Civils Divisions, comprising Sanyati Central (Free State and Northern Cape), Sanyati North (Gauteng, Mpumalanga, Limpopo and North-West) and Sanyati Coastal (KwaZulu-Natal and Eastern Cape) delivered sterling results, with revenue increasing by a satisfactory 62% to R1 769 million (2009: R1 090 million) and EBITDA increasing by an exceptional 107% to R176 million (2009: R85 million). The EBITDA margin rose from 7.8% in 2009 to 9.9%.

Lobban expressed his satisfaction and said: “Full credit goes to our project teams at the many sites around the country. Demanding deadlines ahead of the World Cup were made all the more challenging by the heavy rainfalls that we had to deal with in the last few months. It has been a year of delivery during which we have been able to strengthen a number of key relationships with both our clients and the communities that we serve.”

Sanyati’s specialist contracting operations in the concrete sliding and piling disciplines produced credible results in markets that were severely impacted by the downturn in the economy. Historic problems in the building construction operations however resulted in an aggregate operating loss of R9 million from these businesses for the year. The Group also disposed of its roads surfacing business in February this year which resulted in once off loss from discontinued operations of R15.8 million. “We are confident that all these performance issues have now been fully dealt with and the sale of the roads surfacing business at the end of the year means that we have completed the process of streamlining the business back to its core areas of focus and capability” said Lobban.

The overall result for Sanyati meant an increase of 15% in the year-on-year fully diluted normalised headlines earnings per share from continuing operations from 20.4 cents last year to 23.5 cents for this year. Good progress was made in the management of the cash and the balance sheet. Capex was contained to R45 million (2009:R73 million) and net borrowings, including vendor liabilities, were reduced from R120 million to R75 million at the end of the year.

Outlook
“Notwithstanding certain challenges that lie ahead, we remain optimistic that Government’s well publicised infrastructural spend programme will ensure significant opportunities for the construction sector in the months and years ahead. We therefore continue to adopt a strategy that optimises our opportunities to meaningfully participate in this spend program as and when it is rolled out.

At the same time we have embarked on a selective and responsible strategy of expanding our business into the SADC region and the leveraging of our position in the mining infrastructural markets. Both these strategies provide an important hedge against the timing risks associated with government infrastructural spend programs and are significant opportunities in their own right” said Lobban.

Lobban nevertheless cautioned that traditional civil engineering markets are currently very competitive. The freeing up of significant capacity at the conclusion of the major FIFA projects will ensure that this situation continues for some time into the future. “We nevertheless remain positive about the year ahead and our confirmed order book for the next 12 months is just over R1.0 billion with a pending order book of almost R1.8 billion,” concludes Lobban.

Positive developments at Sanyati Holdings Limited

19/02/2010 12:00:00 +0200

The Board of Directors, effective 25 January 2010, announced the appointment of two new Independent Non-Executive Directors, Zohra Ebrahim as the Non-Executive Chairperson and Lesibana Fosu (who will also chair the audit committee). These appointments were not only motivated by our desire to enhance the capacity, expertise and overall strength of our Board but they are also a tangible demonstration of our ongoing commitment to applying the principles embodied in the King III Report and the Construction Charter.

At the time of our interim results presentations in October last year, we signaled our intention to dispose of our roads surfacing business in KZN, which consists of a non-core asphalt manufacturing and supply plant. The sale of this business to Aqua Trans was concluded last week and the effective date (28 February 2010) has been timed to coincide with the completion of our supply and paving contract at the King Shaka Airport. An important part of this transaction is our agreement to form a strategic relationship with Aqua Trans who are strongly positioned in the plant hire industry. The exit from this specialist activity should be viewed separately from our ongoing commitment and involvement in a multitude of roads projects (upgrades, new roads and road rehabilitation) which remain a core focus area and capability of Sanyati.

The 2010 budget is good news for our industry and most importantly confirms Government’s commitment to the infrastructural spend program of R846 billion for the next 3 years. The R52 billion expanded public works/wage subsidy plan is a bold step and will provide further impetus to our existing obligation and commitment to as many employment opportunities as possible. The country’s infrastructural needs are well understood, namely water, roads, power, rail, bulk infrastructure, housing, etc. The budget has been allocated and the acid test will now be the speed and effectiveness applied by Government departments, agencies, local governments etc in converting the spend program to the multitude of project awards that will ultimately deliver infrastructural improvements. We are confident that our strong positioning in these markets, together with well established partnerships with a number of emerging contractors will ensure that we secure our fair share of these awards in the months and years ahead. Our ambition and strategy is also to leverage the experience and credibility gained from successful participation in a number of high profile FIFA World Cup-related projects which are now nearing completion. Our size, experience and track record provide us with the platform to grow our reputation as the “Partner of Choice” in our chosen markets.

The Sanyati business was conceived in KZN and came of age with the AltX listing in 2006 and the subsequent move to the main board of the JSE in July 2008. In the process, Sanyati has established a national footprint with activity focused in KZN, Free State, Gauteng, Northern Cape and Mpumalanga. Whilst KZN continues to be a vital geographic market for Sanyati, we have identified the need to relocate the head office to Johannesburg. This relocation will mean that the corporate office is better aligned to existing and prospective national clients, partners and service providers and the move is timed to coincide with the completion of our year-end audit (early May this year). Above all, this move demonstrates our commitment to grow the business and strengthen our existing relationships with a private sector client base that includes the mining, telecommunications and property development sectors.

Sanyati disposes of non-core business

12/02/2010 12:00:00 +0200

Sanyati, a broad-based civil engineering and construction company, announced the disposal of its non-core asphalt manufacturing and supply plant to Aqua Transport (Pty) Limited (Aqua Trans)

Sanyati, a broad-based civil engineering and construction company, announced the disposal of its non-core asphalt manufacturing and supply plant to Aqua Transport (Pty) Limited (Aqua Trans), a wholly-owned broad based black economic empowerment company, for a cash consideration of R18 million. The disposal will be effective 28 February 2010, however, Sanyati has already received R1.75 million of the cash consideration with the balance due by 28 February 2010.

Malcolm Lobban, CEO of Sanyati, says that, “The sale of this business is in line with a decision made in 2009 to exit non-core businesses and we have delayed this disposal to ensure that it coincides with the completion of our supply and paving contract at the King Shaka Airport.” Lobban goes on to say that “Sanyati performed an in depth review of all the Group’s businesses and the “road surfacing” business comprising the static asphalt manufacturing and supply plant in Verulam (KZN) was one of the non-core businesses identified.”

The disposal, based on historic interim results for the six months ended 31 August 2009 and assuming that the disposal was effective 1 March 2009, would have increased headline earnings and normalised headline earnings per share by 12.8% and 3.7%, respectively.

“The exit from this business is in no way a reflection of our ongoing commitment and involvement in the multitude of roads projects, which includes upgrades, new roads and road rehabilitation, in South Africa. Sanyati’s core focus area will remain in the civils engineering sector of the construction industry.” concludes Malcolm Lobban.

Sanyati strengthens board with new appointments

25/01/2010 12:00:00 +0200

Further to the announcement last week regarding the restructuring of the Sanyati Board, Sanyati is pleased to announce the appointments of Zohra Ebrahim as the Non-Executive Chairperson and Lesibana Fosu as an Independent Non-Executive Director, effective 25 January 2010. Lesibana has also been appointed as the Chairperson of the Audit Committee. Moses Sangweni, an Executive Director in the Group, has resigned as a director of the listed company. This is primarily as a result of a change in his role within the Group, being his assignment to a new portfolio comprising business development and human resources within the Sanyati Coastal Division.

“We welcome Zohra and Lesibana to our Board and are delighted to have people of their calibre joining Sanyati. They bring with them a wide variety of expertise and experience,” said Malcolm Lobban, CEO of Sanyati.

Zohra Ebrahim has a profile that few women in South Africa have attained in the community, business and political fields. She currently chairs the Social Housing Company (SOHCO) where she was awarded the Govan Mbeki Award for excellence in both the provincial and national categories in November 2009. Zohra has also been the recipient of numerous awards for professional excellence. She is a fellow of the SA Institute of People Management and a member of the Institute of Directors (SA). She also chairs Organisation Development Africa (ODA), a niche strategic management and public sector consultancy, which she joined in 2003. From November 1999, Zohra was a non-executive director of Edcon and was Deputy Chairman of the group and Chairman of the Remuneration Committee at the time of its purchase by Bain Capital in May 2007. She was also a member of the Edcon Transformation Committee and continues to be a trustee of their staff empowerment scheme. In July 2007, Bain Capital invited her to be an Independent Director of the new holding company of Edcon. She continues to chair both the Edcon Remuneration as well as the Transformation Committee. She has also been a director of Fifth Quadrant Actuaries and Consultants since 2002 and chairs their Remuneration Committee.

Lesibana Fosu is a CA (SA) and articled at PricewaterhouseCoopers. In March 2009 Lesi started Shikamoo Consulting Projects, a business offering a range of financial and process re-engineering services. Prior to this she was the Group Financial Director of Phambili Dismed Group and the Chief Financial Officer of Sulzer Pumps (South Africa), a subsidiary of Sulzer Pumps AG (Switzerland). Lesibana also worked as a senior finance manager in the Department of Minerals and Energy. Lesibana currently serves as a member of both the Audit and Risk committees of the National Treasury. In addition she is the Audit committee chairperson of the Limpopo Provincial Government.

Rick Jackson steps down

19/01/2010 12:00:00 +0200

Rick Jackson, Non-Executive Chairman of Sanyati, announced his resignation today

Rick Jackson, Non-Executive Chairman of Sanyati, announced his resignation today. Jackson was a founding member of the company and played a pivotal role in building the company into the civils engineering and construction company it is today. He served as CEO and Executive Chairman of Sanyati until 1 May 2009 following the appointment of Malcolm Lobban as CEO. Rick Jackson later became the Non-Executive Chairman of Sanyati as part of a succession planning strategy as well as to comply with King III.

After twenty one years Jackson feels that he is ready to pursue his own personal interests. The Board of Sanyati expressed its gratitude and appreciation to Rick Jackson for his dedication and hard work in establishing Sanyati as a “Partner of Choice” in the civils industry.

Commenting on the resignation, Malcolm Lobban, CEO of Sanyati said, “we value his significant contribution and entrepreneurial and engineering skills in developing the business over many years. Under his leadership Sanyati was listed on the JSE in 2006.”

In light of the construction environment and the importance of transformation, Sanyati is in the process of restructuring and streamlining its Board. Sanyati is expecting to announce the restructured Board of Directors, which will include the announcement of the new Non-Executive Chairperson, on or about Monday, 25 January 2010.

Interim Results - Sanyati`s core civil engineering business the star performer of the group

27/10/2009 12:00:00 +0200

Sanyati is pleased to announce a solid set of results for its core civil engineering business for the six months ended 31 August 2009 in the face of exceptionally tough economic and trading conditions.

Revenue up 42% to R1 149 million (2008: R809 million)

Operating profit increased by 32% to R87 million (2008: R66 million)

Normalised headline earnings, excluding once-off changes to accounting estimates, up 16% to R51 million (2008: R44 million)

Introduction
Sanyati is pleased to announce a solid set of results for its core civil engineering business for the six months ended 31 August 2009 in the face of exceptionally tough economic and trading conditions. Malcolm Lobban, CEO of Sanyati, states, “The period was marked by the consolidation and restructure of the Group into two focal units grouping together the core civils businesses and the specialist contractor businesses.” Lobban further says that the realignment and refocus of these business units culminated in certain divisional management changes and a more streamlined reporting structure.

Financial overview
During the period under review, total revenue increased by 42.1% to R1 149.3 million, resulting in an operating profit (EBITDA) of R86.8 million, 32.1% up on the previous period. Operating margin decreased marginally to 7.6% (2008: 8.1%) for the Group mainly as a result of the poor performance in the Buildings business.

The core Civils Divisions, comprising Civils Inland (Gauteng), Civils Coastal (KwaZulu-Natal), Civils Central (Free State and Northern Cape) and Civils North (Mpumalanga), delivered impressive results despite increased competition in the industry, with revenue increasing by 62.6% to R903.3 million (2008: R555.6 million) and operating profit by 172.4% to R90.7 million (2008: R33.3 million). The operating profit margin increased suitably to 10.0% from 6.0% in 2008.

The remaining revenue for the Group came from the specialist contractors businesses and amount to R266.0 million.

As part of reassessing the businesses within the Group, a review of certain contracts-in-progress, debtors and value of properties within the Property Development business was performed. John Deeb, CFO of Sanyati, says that, “The result revealed that certain contract estimates made in respect of future contract revenues and costs-to-completion at 28 February 2009, provisions against debtors and impairment of property values to fair value needed to be revised. The total, once-off changes in accounting estimates amounts to R50.2 million.”

The above change in accounting estimates had a negative impact on earnings and headline earnings, resulting in a of 65% and 66%, respectively. However, if the change in accounting estimates were to be excluded, normalised headline earnings would have increased by 16%.

Lobban goes on to say that the management of the balance sheet is of vital importance to the Group, especially in the current economic climate. In this regard, we have kept capital expenditure, which amounted to R22 million (2008: R31 million), to a minimum as certain plant equipment is readily available for hire at competitive rates. Working capital will remain a key focus area and even though revenue has increased by 42.1%, the increase in trade and other receivables only reached 28.9%. A positive cash flow from operating activities, before working capital, of R63.4 million for the period was achieved.

“Borrowings have increased by R19 million primarily to fund the increase in the value of development property. These borrowings will reduce going forward as a major development has recently been completed and we are in the process of transferring ownership of the sold units.” says Malcolm Lobban.

Prospects
The Group has a confirmed order book, as at 31 August 2009, of R1.8 billion of which R0.6 billion will be carried over into the 2011 financial year. In addition to the confirmed order book, the Group tendered on projects to the value of R741 million that are pending award.

“Whilst current economic conditions have negatively impacted the construction market as a whole, the specialist construction areas within which Sanyati is active, still represent significant opportunities. We believe that Sanyati is well positioned to take advantage of these opportunities going forward. Our vision for Sanyati is to push the boundaries in the delivery of life changing engineering solutions,” concludes Malcolm Lobban.

ADDITIONAL INFORMATION ON THE SANYATI DIVISIONS

Sanyati Civils Coastal

This division reported a 20.1% increase in revenue from R265.3 million (2008) to R318.7 million for the period. Operating profit rose by an impressive 121.6% from R11.6 million to R25.7 million. Key contracts including the eThekwini AC replacement water pipeline contract, the R102 road construction project (an alternative road from Durban International Airport to the N2) and the M41 road improvement contract from Mt Edgecombe to Phoenix. This division’s operating margin is at 8.1% compared to the previous period’s 4.4%.

In the prior year, contract work performed in Mpumalanga was included under this division. This is now being reported separately as Civils North.

Sanyati Civils Inland

This division, operating in Gauteng, has shown a 113.0% increase in revenue to R195.0 million (2008: R91.6 million) and an operating profit of R18.7 million (2008: R2.3 million), translating into a satisfactory operating profit margin of 9.6% (2008: 2.5%).

As has been previously reported, Civils Inland is a 15% joint venture partner in the Gauteng Freeway Improvement Contractors Consortium (“GFIC”). GFIC was awarded a R1.9 billion contract by SANRAL for the upgrade of the 18km portion of the freeway between the 14th Avenue and Buccleuch Interchange. Work on this project is progressing well. In addition, Civils Inland has completed the new taxiway at OR Tambo International Airport, various projects within and around the Soccer City Stadium as well as other 2010 related infrastructure projects.

Sanyati Civils Central

This division’s revenue was up 103.8% to R279.8 million (2008: R137.3 million) and operating profit up 110.5% to R37.5 million from work done primarily in the Free State and Northern Cape. An operating profit margin of 13.4% (2008: 13.0%) was reported for the period.

The results have been positively impacted by work done on the N8 Bloemfontein Interchange, UMK mine infrastructure, Intermodal taxi rank in the Bloemfontein CBD. We have recently commenced with the 50 KVA upgrade of the 800km Sishen-Saldanha railway line, an exciting project with highly innovative engineering solutions provided to Spoornet.

Sanyati Civils North

This division has shown a 78.8% increase in revenue to R109.7 million (2008: R61.4 million), a 461.9% increase in operating profit to R8.7 million (2008: R1.5 million) and an operating margin of 7.9% (2008: 2.5%) from work done primarily in Mpumalanga.

Significant contracts have included the upgrading of the R40 from Nelspruit to White River and the upgrading of access roads at the Steelpoort mine of Xstrata.

Specialist Contractors

This Division has shown a decline of 12.8% in revenue to R266.0 million (2008: R305.2 million) and an operating loss of R4.7 million for the period.

The Specialist Contractors Division includes the Buildings, Road Surfacing, Piling, Conform and Property Development businesses.

The Piling business is a key niche player with significant potential to expand. A key contract for this business has been the lateral support work done at Zuikerbosch for the Rand Water Board.

Conform, a concrete sliding business, is well positioned to benefit significantly from an upturn in the mining industry and from future anticipated Eskom projects. Performance was down during this period as a result of various large scale capital projects either being delayed or postponed and the mining industry being negatively impacted by the low commodity prices.

The Road Surfacing business has been focused on a major contract for the surfacing of the runways and other areas at the King Shaka International Airport. The major challenge posed by this project for all concerned is meeting the demanding completion deadlines.

The Property Development business is focused primarily on developments in KwaZulu-Natal. As with most developers, they have been impacted by the current slump in the property market. The Property Development business is not seen as a core part of the Group going forward.

The Building business in KwaZulu-Natal has been severely impacted by the slump in the private sector market that accounted for the majority of the work. A thorough review of this business has resulted in the replacement of the entire management team, implementation of sound reporting systems and review procedures and a renewed focus on specific projects going forward.

Sanyati posts solid results in the face of tough trading conditions

19/05/2009 12:00:00 +0200

Sanyati is pleased to announce a set of solid results for the year ended 28 February 2009 in the face of exceptionally tough trading conditions.

Revenue up 54% to R1,543 million (2008: R1,002 million)

EBITDA increased by 13% to R104.3 million (2008: R92.5 million)

Diluted HEPS, excluding impairment, increased by 36% to 21.08 cents (2008:15.5 cents)

Cash flows from continuing operating activities R105.3 million

Sanyati is pleased to announce a set of solid results for the year ended 28 February 2009 in the face of exceptionally tough trading conditions. The global economic recession has had an adverse effect on all sectors of business in South Africa and concerns regarding the cancellation of key contracts have resulted in a loss of confidence in the construction industry. Rick Jackson, Executive Chairman of Sanyati, states: “We are fortunate in that the Government has committed a large amount of this year’s budget to be spent on infrastructure, which should keep our industry relatively buoyant even if it is driven largely by public sector funding.” Jackson further says that with the expected cuts in the interest rate over the next twelve months, some private sector work, which has reduced in quantity over the period, will be stimulated.

Sanyati posted revenue of R1,543 million (2008: R1.002 million), representing a very satisfactory growth of 54%. The increase in revenue is mainly as a result of the Engineering Central division, for the first time, being consolidated into the Group for a full twelve months. When excluded, the remaining Sanyati divisions contributed strong organic growth of approximately 30% for the period under review. This result translated into a 13% improvement in earnings before interest, taxation, depreciation and amortisation (EBITDA) to R104.3 million (2008: R92.5 million). The reasons for the strong EBITDA results are twofold, the first time consolidation of Engineering Central division for 12 months and the very good performance from the Civil Inland division and more particularly, the Concrete Sliding division. In certain geographical areas the results were impacted by high rainfall, which led to slight delays on certain projects. The EBITDA margin of 6.8% is lower than the 9.2% of last year mainly as result of a loss incurred for the year on one contract.

Earnings per share decreased by 37.6% to 13.3 cents (2008: 21.3 cents) and headline earnings per share increased by 4.5% to 23.3 cents (2008: 22.3 cents). These declines are directly related to the impairment of goodwill in an amount of R35.7 million. Excluding the goodwill impairment, earnings per share increased by 9.3% for the year.

Marc Krouse, Financial Director of Sanyati says: “Sanyati continues to boast a strong balance sheet and we are very comfortable with the Group’s capital position as at 28 February 2009.”

Cash operating profit from continuing operations increased to R144 million from a negative R41.3 million in 2008. Accounts receivable generated cash of R27 million for the year under review, with only R0.5 million of debtors being written off. Debtor days outstanding at year end amounted to 58 days. After interest and taxation outflows, there was a net cash inflow of R105.3 million.

Jackson states that: “Looking towards the future, we have a secured a forward pipeline of work of R2.4 billion with approximately R1.3 billion pending award at present. Included in this amount of confirmed work is R2.1 billion that will be executed during the 2010 financial year.”

“The greater South African economy has benefitted tremendously from the spurt of infrastructure growth brought about by the 2010 World Cup Soccer. Government’s well timed commitment to ongoing and substantial infrastructural spend should mean that these benefits will continue to be felt well beyond 2010. Sanyati is well placed to benefit from the roads and general infrastructural improvement spend that is expected to continue throughout the country over the next three to four years. Our exposure to 2010 World Cup Soccer stadia and related infrastructure improvement programs is being replaced with a range of equally attractive projects awarded by Government agencies and municipalities. Sanyati, as a Group, is not dependent on one specialised area of construction. Through thoughtful acquisitions we have assembled a national footprint and a diversified product offering enabling Sanyati to easily be part of any “build” within South Africa.” concludes Jackson.

ADDITIONAL INFORMATION ON THE SANYATI DIVISIONS

Sanyati Civils Coastal

This division posted revenue of R575 million (2008: R421 million), a 36% increase and gross profit of R60 million from R74 million in 2008, a decrease of 19%. This is as a result of the loss of R17.2 million on a single contract.

This contract was initially part of the Gem acquisition and subsequent to the acquisition, incorporated into Civils Coastal. The division's gross operating margin remains strong at 11% going forward and we anticipate a strong performance from this division in the year ahead.

Sanyati Civils Inland

The division contributed R283 million (2008: R222 million), a 27% increase in revenue to the group and a gross profit of R58 million from R43 million in 2008, translating into a gross margin of 21%. Although this division will again contribute significantly to the group in 2010, we do not anticipate margins as high as previously achieved. The division's continued involvement with some of the flagship projects in Gauteng continues to reduce its reliance on the previous predominately private client base.

Sanyati Engineering Central

The division recorded revenue of R311 million (2008: Nil) and gross profit of R64 million (2008: Nil). The gross margin of 20% in 2009 is anticipated to be slightly lower for the 2010, financial year. Still subject to profit warranties until February 2010 this division continues to grow and expand into new operational areas. The division's involvement in niche markets has resulted in its high levels of profitability.

Sanyati Building

Revenue and gross profit for the year ended 28 February 2009 were R233 million (2008: R185 million), a 26% increase in revenue, and R50 million (2008: R55 million), respectively. The contribution from building activities is expected to further decline in the year ahead due to current economic circumstances and we do not anticipate a repeat in the gross margin of 21% for the year ahead.

Sanyati Roads

This division posted revenue of R141 million (2008: R173 million), an 18% decrease in revenue. Gross profit posted is R11 million from R41 million in 2008. The division's gross margin remains under pressure at 7%. With an increase in work load into the 2010 financial year we anticipate a recovery to previous levels of profitability.