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Andrew Skudder

Andrew Skudder
+27 11 456 1043

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Economic Performance

The Group creates wealth through its operations by adding value to the cost of raw materials, products and services purchased. The table below summarises total wealth created and how it was distributed to stakeholders.

Value added to employees through payroll payments increased by 4%, while operating covering lease costs and net interest expense paid to providers of finance increased by 2%. Company tax paid to Governments increased by 147% due to profitability in tax paying jurisdictions and the high tax rate on the profit on the sale of Forge Group Limited. As a consequence of the Group profits, value added to maintain and expand the Group increased due to an increase in reserves available to ordinary shareholders.

The Group did not receive any significant financial assistance from Government during the reporting year.

Everything that is not the natural or agricultural environment is the built environment. This is where Murray & Roberts has played a significant role throughout its history, delivering the infrastructure and facilities required for sustainable growth of the economies in which it operates.

Some of the greatest challenges we face as humankind are to satisfy the growing global demand for transport and logistics, power and energy, water and sanitation, telecommunications, health and education, accommodation and facilities, and mineral extraction and beneficiation infrastructure. Our economic contribution centres on the delivery of this infrastructure, without which no economic and social development is possible.

Infrastructure owners rely on the various stakeholders within the built environment to develop, finance, design, engineer, construct, operate and supply inputs for delivery of infrastructure. We support infrastructure delivery through our core competency of engineering and construction, and through the provision of selected construction products and operations.

The quantifiable benefits of our contribution to society are not easily identified, but considering the positive impact of an adequate built environment on socioeconomic development and the scale required to make the difference measurable, the significance Murray & Roberts has attained in its markets over more than 110 years, offers some testimony in this respect.

PERFORMANCE DIMENSION 2013   2012 Restated Movement
Economic contribution        
Value added to employees 13 941   13 455 Up
Value added to providers of finance (net) 548   536 Up
Value added to government 545   221 Up
Value added to maintain and expand the Group 1 744   (135) Up
Total value added 16 778   14 077 Up


The financial sustainability of engineering and construction businesses hinges on the following value drivers:

  • Financial position strength which impacts the Group’s credit rating for performance bonds and working capital
  • Sound cash flows to support investment and growth
  • A formalised project procurement system which defines our risk appetite
  • The project order book relative to revenues.

The Group’s year-end cash and cash equivalents position was R6,3 billion (2012: R3,4 billion) after an operating cash inflow of R1 656 million (2012: R2 290 million cash outflow). The primary contributors to the increase in the cash position are operating cash flows generated by Clough Limited, the proceeds received on the sale of Forge Group Limited of R1 784 million and the sale of non-core assets of R403 million.

Procurement of projects is the primary source of risk for the Group. The Group risk appetite sets the operational parameters for risk. Prospects are filtered against criteria such as value, country, legal system and scope, and the level of authorisation required is specified.

The opportunity management system (OMS) supports the evaluation and approval of project opportunities in the context of the risk appetite. At 30 June 2013, opportunities in the active pipeline amounted to R53 billion (2012: R74 billion).

For a complete report on our economic performance please visit the online annual integrated report.