Construction and materials company Raubex Group has a strong road construction order book as it enters its 2027 financial year.
Image: Supplied
Raubex, a leading infrastructure development and construction materials supply group in South Africa, increased its order book by 11% to R31,5 billion by February 28, providing a high degree of earnings visibility for shareholders, said CEO Felicia Msiza.
“Against a backdrop of persistent geopolitical uncertainty and ongoing local challenges, the group delivered another resilient performance in the year. This was underpinned by a strong balance sheet, solid cash generation throughout the year,” she said.
She said diversification remained a defining pillar of their strategy, having strengthened the group’s position across multiple sectors over the past five decades.
Revenue increased by 4,6% to R22,05bn, underpinned by solid performances across most divisions. A marked improvement in Bauba Resources’ second-half performance and a strong contribution from the Roads and Earthworks as well as the Infrastructure Divisions were key drivers of the growth.
She said in an interview the roads division had tendered for about R5,5bn of work from government and road concessionaires, which represented a strong pipeline of work for the division.
Operating profit increased by 11,6% to R1,74bn with the group operating margin improving to 7,9% (2025: 7,4%) due to the strong recovery in the Materials Handling and Mining Division.
The group began to report its operations under five reportable segments from March 1, compared to the previous four segments.
Revenue for the Materials Handling and Mining Division fell by 32% to R4,13bn. Despite the top-line contraction, operating profit increased sharply to R444,9m, lifting the operating margin to 10,8% (0,1%). This was driven primarily by a strong turnaround in Bauba Resources’ mining operations. The remainder of the division also delivered solid results.
Bauba Resources' operating profit rising sharply from a loss of R235,8m in 2025 to a profit of R243,7m in 2026. Although revenue declined by 8,1% to R2,40bn, the substantial uplift in profitability highlights the success of initiatives implemented, she said.
Revenue for the Construction Materials Division increased8% to R3,50bn and operating profit for the division decreased by 13,4% to R312,5m. The operating profit margin also decreased to 8,9% (11,1%).
The division’s results declined primarily due to adverse weather in the first two months, which reduced sales volumes in the Aggregate and Bituminous businesses. Also, the Industrial Minerals segment was affected by uncertainty about the future of ferrochrome smelters.
However, prospects looked better with the tariff agreement reached between Eskom and the smelters likely to result in better bentonite sales, the group had good bitumen stocks, and the Aggregates business should do well, said Msiza.
Revenue in the Roads and Earthworks Division fell by 4,9% to R7,13bn. Operating profit rose 4,3% to R612,7m, while the operating profit margin remained stable at 8,6% (8,6%), again surpassing our target range of 6% to 7%.
These increases were mainly driven by strong project execution, the start of large new projects and higher margins, especially on the Senqu Bridge project, which was successfully completed during this financial year.
“The official inauguration took place on April 22, 2026, marking the bridge’s opening for public use. The project was delivered on time and within budget,” Msiza said.
Revenue for the Infrastructure Division increased by 30,2% to R4,35bn, with operating profit increasing by 42,2% to R426,9m. The performance was mainly attributable to new contracts secured in South Africa. Operating profit margin strengthened to 9.8% (9%).
“Our renewable energy projects continued to deliver solid returns and we secured new renewable-sector contracts valued at about R2,1bn.”
Revenue in the Australia Division fell by 14.4% to R2,94bn and operating profit declined to an operating loss of R60.m from an operating profit of R303.9m.
The most significant setback arose from Raubex Construction Australia’s largest project for a major mining client. The contract was issued a deed of settlement at the end of December 2025, and the financial impact amounted to a loss of R177m. The other three main contracts in Australia had performed well, said Msiza.
To further diversify the group income streams, Hlumisa Engineering Services was acquired, which has a mechanical and electrical engineering focus on the water and wastewater treatment sectors.
A 67% interest in Axis Mineral Services (Australia), a contract crushing business, was also acquired, as well as the Mowcop Silica Quarry, the Construction Materials Division’s entry into a niche, what it views as a high-potential market.
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