WBHO Expects Strong 2023 Growth Amid Market Challenges

  • Strong Growth Projected: Wilson Bayly Holmes - Ovcon Limited (WBHO) foresees robust financial growth, expecting over 25% increase in operating profit and 30% rise in revenue for the reporting period ending June 30, 2023.
  • Challenges and Strategy: Despite slower exit from the Australian market, WBHO maintains exit cost stability for financial resilience. Order book surge of 47% showcases successful work procurement.
  • Anticipated Earnings Variation: WBHO's Board anticipates notable earnings per share and headline earnings per share growth, reinforcing positive financial trajectory.
By Lethabo Ntsoane

Wilson Bayly Holmes – Ovcon Limited (WBHO) has recently released a trading statement that paints a promising picture of its financial performance for the year ending June 30, 2023. The company is confident that its upcoming financial results will reveal a substantial improvement compared to the previous corresponding period.

The South African construction industry has faced its share of challenges in recent years, including economic uncertainties and the impact of the COVID-19 pandemic. Against this backdrop, WBHO’s positive trading statement has garnered attention as a potential beacon of hope for the sector.

Robust Financial Growth on the Horizon

WBHO’s management is anticipating remarkable growth in key financial metrics for the reporting period ending June 30, 2023. The company’s operating profit is projected to rise by more than 25% in comparison to the prior period. Furthermore, the revenue is expected to see a significant increase of at least 30% compared to the previous reporting period.

This substantial growth can be attributed in part to a notable improvement in the company’s work procurement. The order book, which indicates the value of projects that have been secured but not yet completed, has experienced an impressive surge of 47% compared to the previous period. This growth underscores WBHO’s success in securing new projects and expanding its business operations.

Challenges and Opportunities

While the financial outlook is predominantly positive, the trading statement also acknowledges certain challenges that the company has encountered. WBHO’s efforts to exit the Australian market have progressed slower than expected. Despite this setback, the company has made the strategic decision not to alter the increased exit costs that were reported at the end of December 2022 for the reporting period ending June 30, 2023. This measured approach aims to ensure the company’s financial stability and resilience in the face of market uncertainties.

Earnings Projections

The Board of Directors at WBHO has provided valuable insights into the expected variations in earnings per share (EPS) and headline earnings per share (HEPS) for the reporting period ending June 30, 2023. The anticipated ranges are outlined in the table below:

30 June 2023 (%)Range (cents)30 June 2022 (cents)
Continuing OperationsAttributable Earnings Per Share25% to 30% up1,629 to 1,700
Headline Earnings Per Share27% to 33% up1,648 to 1,725
Total OperationsAttributable Earnings/Loss Per Share135% to 138% up1,442 to 1,544
Headline Loss/Earnings Per Share139% to 141% up1,440 to 1,525

Looking Ahead

The eagerly awaited official financial results for the year ending June 30, 2023, are scheduled to be unveiled on September 12, 2023. These results will be published on the JSE’s Stock Exchange News Service (SENS), providing shareholders and the broader financial community with a comprehensive overview of WBHO’s performance during the reporting period.

It’s important to note that the financial information forming the basis of this trading statement has not yet been reviewed or reported on by WBHO’s external auditors. As such, these projections are subject to change pending the completion of the auditing process.

Taking Responsibility

WBHO’s Board of Directors stands behind the accuracy and completeness of the information presented in this announcement. They assert that, to the best of their knowledge and belief, the information is accurate and complete, without any omissions that could impact the significance of the information shared.

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Lethabo Ntsoane

Lethabo Ntsoane holds a Bachelors Degree in Accounting from the University of South Africa. He is a Financial Product commentator at Rateweb. He is an expect financial product analyst with years of experience in reviewing products and offering commentary. Lethabo majors in financial news, reviews and financial tips. He can be contacted: Email: lethabo@rateweb.co.za Twitter: @NtsoaneLethabo