Headquartered in Boksburg, Basil Read Holdings was founded in 1952 and is today one of the top construction companies in South Africa. The company has a number of subsidiaries involved in civil engineering, building, road construction, property development, opencast mining, mixed integrated housing, engineering design and related services.
The Construction division includes civil engineering, roads, building operations and property developments projects. Public and private sector work includes earthworks, pipelines, infrastructure, bridges, harbour and marine works, roads, highways, industrial plants and airports.
The mining division focuses on surface contract mining, including drilling, blasting, loading, hauling, dumping, material handling and processing services to the mining, quarrying and construction industries. Additional services include infrastructure development, mine design, planning, scheduling, operations management, surveying and optimisation.
Current countries of operation include South Africa, Namibia, Botswana and the island of St Helena, where Basil Read is contracted to build a R 4.6 billion airport. Basil Read recorded turnover of R5.5 billion in 2015, with a total after-tax profit of R 171.2 million. Basil Read shares have been available to buy on the Johannesburg Stock Exchange (JSE) since 1987.
Basil Read Shares Growth Driver
Basil Read has charted a successful course through a tumultuous history of booms and recessions in South Africa’s construction industry.
The global recession of 2008 had a major impact on Basil Read, which recorded massive losses. This has been to the detriment of Basil Read share price, which has shown a steady decline on the live online stocks chart. Despite the many challenges faced by the construction sector, Basil Read implemented an effective turnaround strategy and managed to secure a fresh pipeline of work, while putting non-core assets up for sale. A new operating model returned Basil Read largely to its core business of heavy construction, which reduced overheads, disposed of under performing businesses and simplified the business model. This has seen the company return to profitability. The order book currently looks rosy at R 10.7 billion, and Basil Read is well placed to capitalise on improvements in the construction environment and an acceleration in government infrastructure spending.
The company has said that it will buy into initiatives to smooth the impact of cyclical volatility, extracting maximum value from assets and divesting non-core assets, and developing the appropriate corporate culture for a focused, disciplined construction company.
Basil Read Group Investor Tip
In the short-term, the forecast for the construction industry in South Africa remains muted. Basil Read has however made a remarkable turnaround from a loss of more than R800 million in the 2014 financial year, to profits of over R170 million in 2015.
Despite work at major projects such as St Helena airport drawing to a close, Basil Read has managed to secure new contracts with buy in from major clients. The company anticipates that, in the long-term, infrastructural needs in South Africa and the rest of Africa should support growth of the sector and benefit Basil Read.
Basil Read share price has undergone a steady decline in recent years, but the company recently announced that it will be paying out dividends for the first time since 2011. Appetite for Basil Read shares continues to grow, and the stock may be a surprisingly profitable purchase.
Basil Read Major Shareholders
Industrial Development Corporation, GEPF Equity, Amabubesi Investments, Allan Gray.
Engineering & Construction Svcs
How to buy Basil Read Group Shares
Basil Read : How to buy Basil Read Group Shares Online
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