Wilson Bayly Holmes-Ovcon (WBHO) is currently in “a good space”, says CEO Wolfgang Neff.

“We all feel a whole lot better about South Africa.”

Neff spoke in Johannesburg at the announcement of the construction giant’s financial results for the year ended June 30.

An upbeat Neff acknowledged that a lot of work still had to be done within the country, but noted that the Government of National Unity (GNU) appeared to be committed to service delivery and infrastructure development, which would bode well for WBHO.

“A further good thing is that government intends to deal with extortion and the construction mafia, which will go a long way in supporting infrastructure development in South Africa.”

Neff added that inflation had stabilised and that world economies would soon cut interest rates, as had already happened in the UK, for example.

Domestic and global growth rates were also improving.

“And then, given our own order book levels and forward-looking pipeline, I think we have a few busy years ahead of us.”

This said, Neff on Wednesday reported a mild drop in the group’s secured order book at the end of June, at R30.6-billion, down from last year’s R32.5-billion.

The group’s project pipeline – projects the group was actively targeting – sat at R259-billion, which was a significant jump from last year’s R212-billion.

“I don’t think anyone must read too much into the reduced order book,” said Neff.

“To us it is still at very elevated levels – also when considering we have a good chance of being awarded about R35-billion in tenders already submitted.

“When looking at the pipeline of projects I think we are not going to have people or plant sitting around in South Africa in the next two or three years.”

The total pipeline was up 22% compared with last year.

Neff also noted that he had never before seen a project pipeline of the current size in Africa, with growth in most sectors.

He said the weight of public work within the pipeline was at 37%, up from the previous 14%.

Neff added that the UK also appeared to be set for growth following a tough spell, with the group in a good position in this market in the next year or two.

The current project pipeline in the UK was flat, however, but with “enough work to keep us busy in the next year”.

WBHO reported a 16% increase in revenue for the financial year ended June 30, to R27.5-billion, with operating profit up 27%, to R1.4-billion.

Operating profit was up 20% in South Africa, to R930-million; up 35% in the rest of Africa, to R302-million; with the UK seeing a 56% increase, to R183-million.

South Africa made up 69% of WBHO’s revenue, the UK 20% and the rest of Africa 11%.

WBHO CFO Andrew Logan noted that Australia was “now firmly just a speck in the rearview mirror”, following a botched contract in Melbourne which saw the company exit this market.