Raubex Group Limited (RBX) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to Raubex Group Interim Results Presentation. Our agenda for the day, period in review, group financial highlights, and we'll take you through a divisional review, order book, major projects progress and then a conclusion. For the period in review, the group is pleased to present a strong set of results for the 6 months ended 31st of August 2021. The group, as you recall, commenced a period of a record order book of ZAR 17,1 billion. And we'll give some more detail on that order book a bit later. So we started the distribution of this order book profitability. All our contracts is up and running now. The Beitbridge Border Post project in Zimbabwe, the group's largest project to-date is also progressing well. We've experienced an increase in tender activity during the second half of the previous year that continued during the first half of the year. Number of projects are still pending adjudication, which can increase the order book substantially if awarded. And we are encouraged by South African Government's Economic Reconstruction and Recovery Plan. We measure it by tender activity in the construction sector, which is probably at some of its all-time high at the moment. Operationally, the group performed well when compared to more normalized operations from previous periods. Operating profit up 25% when compared to H2 from the previous year, and I'll unpack that again a bit later; and strong performance by our Australian operations in Western Australia, Perth. COVID-19 had no major impact on the current period's results. The group continues focusing on efforts to create a safe working environment for all our employees. And we also drive to create awareness, assisting in encouraging employees to get vaccinated. Financially, we are very focused on managing the high working capital demand of a strong order book and maintaining a strong balance sheet. The group financial highlights, now I want to start saying this percentage obviously is nonsensical, because we're comparing it to the previous H1, which was actually we call COVID-related, which we didn't work. So it doesn't make a lot of sense. So I'm going to try to put some context to it by just referring to H2 of the previous, which was normalized and which also was a quite strong set of results to really compare apples-with-apples. But as you know, we have to report comparing H1 versus H1 to next -- last year's H1. So just to run through the numbers, revenue increased 52%. Operating profit increased 1907%. The Group's operating margin of 7,3% at 0,6%. Now just to give some context to this, if you compare it to H2 last year, which was a normalized period, this H1 was up 25%. The margins were -- profit margin of 7.3% compared to 7% and HEPS is up 26% compared to the previous 6 months. I think that gives a better feel for understanding H1's results. CapEx of H1 was ZAR 287 million compared to ZAR 167 million. And again, to last set of 6 months, it was ZAR 250 million, so CapEx is slightly up. The order book increased 41,1% to ZAR 16,55 billion. As you recall, at the end of H2 last year, it was ZAR 17 billion. And I will in a later slide unpack that order book for you to understand it completely. The interim dividend of ZAR 0.47 per share declared are normal policy of 3x cover. So that, in essence, is our financial highlights. I'm going to hand it over to Sam Odendaal, our Financial Director, to take you through the balance sheet. And after that, I will go through the operational performance for you.

Thank you, Rudolf, and good morning, ladies and gentlemen, from my side as well. Welcome to the results presentation. Like Rudolf mentioned, we are very pleased with a good set of results for the 6 months. I can just quickly take you through the income statement. If we look at the revenue is in the order of ZAR 5.1 billion with an operating margin of 7.3%. I can just highlight that the effective tax rate came down from 40.6% in February to a more normalized tax rate of 30% this year. Our earnings per share is ZAR 0.1406 a share. And with our normal 3x dividend cover, we will declare a ZAR 0.47 dividend for the 6 months. If we move on to the balance sheet. Overall, we ended off the last year with quite a strong balance sheet and a strong cash balance, and we've maintained that strong balance sheet and cash balance during this reporting period. This slide specifically looks at the assets. If we look through the noncurrent assets, the investments in associates is up from year-end. Included in that number is the investments in Bauba Resources. That was an acquisition of ZAR 55 million. And if we look at the other financial assets, that number is also up with the acquisition of Arcadia Minerals. We have paid in the order of ZAR 15 million, and then there was also a fair value adjustment through OCI under investment. If we look at the current assets, trade and other receivables. That one is also higher at ZAR 1.9 billion at the end of this period. But that's clearly because of the increased activity in the operations, the SANRAL work that was awarded, it offers here and also Zim border is at full swing. Our day-to-day collection days are [indiscernible] in February. We move on to the statement of equity and liability. There's not much to highlight there. It's all pretty much in line with what it was at the end of last year. Maybe just at the bottom of that page, I can highlight that gearing come down even further to 14.2%. If we're looking at the cash flow statement, there was a net cash decrease of ZAR 314 million. The main reason for the decrease in cash is if we look at investing activities, we had some acquisitions of subsidiaries and associates. And then on the financing activities, there was a repayment of borrowings. We had to restructure one of our companies, and we settled outstanding HP debt of around ZAR 110 million. And then if we look at the net cash generated from our operating activities, that's also lower, but that's because of the SANRAL projects and Zim border project that kicked off and there was a lot of working capital requirements there. We move on to the segmental analysis. Revenue wise, most of the revenue was generated in the Roads and the Earthworks division, ZAR 2.7 billion. All the divisions performed well, with the Materials division accounting for 43% of the group's total operating profit. Margins, we will unpack when we go through the individual divisions later on in the presentation. But margins, I can just mention for your models is that we account for the ZIM borders project in the Roads and Earthworks division and in the Infrastructure division, 50:50, so it's an equal split of that project between the Roads and Earthworks and Infrastructure, and we account for our Australian operations in the Infrastructure division. If you look at the geographical segments, we've made an operating margin of 5.3% in South Africa, 19.5% in the rest of Africa, and 8.1% in Australia. And we are very pleased with our performance from our Australian operations. And currently, Australia is making up 15% of the group's turnover and 17% of the group's operating profit. And then as mentioned earlier, the group will declare a cash dividend of ZAR 0.47 cents. That's maintaining our 3x cover policy, and there's just some relevant dates. And that's it from me. I'm going to hand you back to Rudolf to take you through the divisional reviews.

Thank you, Sam. Okay. Let's unpack the different divisions of the group to see how we got to these results. Now again, the same applies to these figures as compared to H1. So I'll try and unpack it more properly for you. But officially, revenue increased, operating profit increased to ZAR 77 million, and operating margins increased to 14,8%, CapEx of ZAR 149 million. Just to again normalize to H2, the revenue increased by 4,9% and the operating margin is slightly down from 16% of H2, and the CapEx of ZAR 149 million compared to CapEx of ZAR 126 million in H2. The order book of ZAR 1,51 billion, now in this division, you mustn't read too much in that order book. It's low because we only recognize actual orders or contracts. So because we trade day-to-day, which is most of this business, revenue is not accounted in net order book, so it's nothing concerned to that order book. This division continues to provide materials and handlings services to a diversified customer base. Now quite important is the next point. We did inform the shareholders at the previous H2 results that we are looking at partnership with mining and resource owners, which we're busy establishing and we're looking at opportunities to participate in the materials and handling contracts in the mining space. So in this period, we have acquired minority stakes in Bauba Resources, Arcadia Minerals, and Vanadium Resources. And all those stakes gives us first right of refusal of material handling for our companies. This is quite a different strategy that we believe this way, we will create work for 10 to 15 years in these mines by our own companies. Just to give you a feel of it, it's between ZAR 50 million and ZAR 100 million opportunity. We are looking at more opportunities in this space, and we're quite excited about this development. The group will continue to explore bolt-on acquisitions, and that's specifically to the commercial quarries, which we would like to increase our geographic footprint from the current status. And then the commercial quarry operations performed well with increased demand for aggregates. This division acquired a stable result. And going forward, we're looking forward to the mining sectors, material handling to provide additional income to this division. Right, Roads and Earthworks division, again, the revenue increased 91%. Again, compared to H2, it was 26%. So we've got work in the road sector space. Obviously, we've covered, we made a loss. So it returned to profitability of ZAR 116,5 million. Operating margin of 4,3% compared to the loss. H2 was 3,6%. So it is improving. But most of our contracts is up and running now, and we're looking to a good second. CapEx of ZAR 82,9 million. The order book of ZAR 10,75 billion compared to ZAR 6,8 billion, the order book I will unpack later in the slide. This division focused on efficient execution of our record order book. So for first time, we've got quite a long window of order book, and now we have to produce on this order book. After a slow start, over recent awarded SANRAL projects on N3 are under way and on program. Tender activity is at the high with a good base load over the medium term. But the division can look to a higher margin opportunities going forward. The increased demand in asphalt and bitumen supply operations is encouraging. Now just to put some context to this, it's not that where it's been, but it's improved quite dramatic from where it's been from a low base, as you recall. So it is encouraging. Hopefully, we'll go back to a normalized base. Roads division will also jointly participate in the upgrade and expansion of Beitbridge Border Post in Zimbabwe, together with the Infrastructure division. Just for your memory, the 50% of work at Beitbridge is civils and 50% is buildings, and the 2 divisions of us is handling this. Okay. Infrastructure division, again, revenue up 54%, compared to H2 it's up 25%; operating profit increased 794%, compared to H2 it increased 83%; margins of 6,6%, compared to 4,5% H2; CapEx of ZAR 54 million, strong order book of ZAR 4,29 billion. So in this space, strong performance from commercial building and housing operations. Renewable energy operations had a slow start to the year due to a delay in the award of the Renewable Energy IPP Risk-mitigation round. And we've got a slide to unpack exactly what's happening there. Commercial building projects and opportunities to participate in Public Private Partnerships are coming to the fore. So it's quite encouraging government has brought out a several number of PPP projects, which we're busy pricing and it's quite a big project, as well as due to accommodation and affordable housing developments, which could grow this division over the medium term. And this division, as I just explained, is doing 50% of the work at Beitbridge by doing the building work. Now on the Renewable Energy update, I think everybody has seen a lot of media announcements by the government. So just to unpack it, so everybody understands it, the IPP Risk-mitigation round, that was delayed due to various legal actions, which you probably see in the contract. Now we are running for a number of projects in that risk mitigation round. We estimate commercial close, it was supposed to be right in the ground for 6 months. So in this year, in the Infrastructure division, we only got 1 solar contract. So the potential solar work, we only foresee next financial year. So we believe the financial commercial close on Risk-mitigation round will be in 2022. Again quite encouraging, the Bid Window 5. The government has announced a preferred bidders on 25 projects, 12 wind and 13 solar, totaling 2,600 megawatts. As said in the press release and -- that the commercial close estimate to be February 2022. Raubex to capitalize on well-established relationship with renowned IPPs. So we are running for a substantial portion of this work. It's obviously subject to financial close now. So once we achieve financial close, we will bring the market up-to-date of exactly how much. Then Renewable Energy IPP Bid Window 6, government has announced that Bid Window 6 is scheduled to open to the market end of January. Also 2,600 megawatts of between wind and solar. Now the early announcement of this round will hopefully ensure continuity in renewable energy market. We're quite a big player in this market. But the climate at moment, it was stop-start, stop-start. For example, this year, we had quite a big holding cost on our renewable energy capacity. Hopefully, if all this happens, we should see continuity of at least 3 to 4 years in this space, which will obviously benefit us. And then lastly, we amendment of schedule 2 of Electricity Regulation Act to increase NERSA's licensing threshold from 1 megawatt to 100 megawatt. Now we have not seen a lot of activity in this space, but we believe going forward, we should start picking up activity in that space as well. So all in all, it's quite encouraging what's happening. I think government has committed to this process. It's a question of when and timing. And hopefully, we can play a leading role in this whole energy space. International, Rest of Africa revenue increased to ZAR 649 million, operating profit ZAR 126 million. Margins increased to 19,5%. Order book increased to ZAR 3,77 billion, that's mainly Zim borders. Good results reported from our commercial aggregate operations in Botswana. The EPC Contract for the expansion upgrade of Beitbridge Border Post in Zimbabwe got off to a swift start with profitable execution of operation to date. Very important, we received Taking over Certificate for successful completion of Phase 1, which was a critical phase on this project on the 18th of September 2021. So we're on time and work on Phase 2 is underway and progressing well. The group has adopted a more conservative strategic tendering work in Africa and will only consider projects of suitable risk and reward profiles. Just to unpack this, I think we communicated this to shareholders 6 months ago that due to various logistic, payment issues and COVID in Africa, became very difficult. So we're considering on a neighboring countries where we've got an existing infrastructure. And then we also look at opportunities in Phase 2 of the Lesotho Highlands Water Project, which is the mega water project. And then lastly, operations of Mozambique is still suspended. We are in talks with a client, and it looks like they're going back to Mozambique, but we're uncertain of the timing. So at this stage, Mozambique is not really on our radar. So that's international. Then Australia, remember, COVID didn't have a big impact on Australia in H1. So we can compare numbers here because they didn't go in a hard lockdown like South Africa. So revenue increased 75,7% to ZAR 926 million. Operating profit increased 107% to ZAR 74,9 million. Operating margin of 8,1% compared to 6,8%, which we believe is quite a strong operating margin for Australia. And then the order book decreased slightly to ZAR 626 million. But we believe there's a lot of work in Western Australia. So we're not too worried about the order book. Good results were reported by Westforce Construction during the period, and all projects are performing well. The new Raubex Construction unit focusing on roads and earthworks is now well established in gaining market share. Raubex will continue with a cautious approach to exploring the Australian markets, and we will look to grow its footprint at a measured pace in Australia. And operations are to remain focused at this stage on Western Australia only. We believe there is opportunities in Australia, which we would like to explore. Our biggest frustration is we can't go basically to Australia. So as soon as the Australian borders open, we will go to Australia and look at potential more opportunities there. But all in all, a very strong set of results. So our order book, just let's unpack it quickly here. So SANRAL is now back at 40% of our order book. Private is 20%. That's basically our mining operations. In international, large is Australia and obviously, some borders. But one thing I want to highlight here is if you look at the left-hand bottom column, we've got a pipeline for at least 4 years now. That's the first time in our history, we've got this type of pipeline. And as we said, this order book can only improve going forward because there's a number of projects we're waiting for awards. So it's quite encouraging, the order book. Just very importantly, so if you compare the order book to H2, we had ZAR 16,55 billion compared to ZAR 17 billion. Now in this period, we've not got any major awards. We're still waiting for some major awards. So it's quite encouraging that we've maintained the order book because remember, the group is working at almost ZAR 50 million a day on this order book. So with a number of small awards, we've been able to keep the order book at those levels, which for me is very encouraging at the moment. Just to understand where is this order book, just go to the right column, August '21. That's the most important. International is 4.4 billion, is slightly down, obviously, because we're starting to work Zim borders down. Private is slightly up, ZAR 3,2 billion. And then the main one is SANRAL is 6,7 billion at this stage. If you compare it to 3 years ago, remember when the construction was down, it was at ZAR 200 million. So you can see quite a substantial strain to be. Right. That's the order book. Some photos. That's our Zim Borders project. That's one of the terminal buildings. That's an overview shot of all the buildings we're doing in the roads and the parking areas. That is also some terminal buildings. You can see it's quite a mega project. That's quite interesting. In this project, we're doing over terminal building, the access roads, the parking areas, and also the village. So we're doing roads and services for the village, top structures and over towers. We're doing oxidation dam, plus we're doing the reservoir. So it's a whole total mega border post with town, everything, which we're doing at the moment. There's the oxidation dam, there's a reservoir on the Post in Beitbridge to supply the water. Right. This is our Hometown Bloemfontein. This is the new bridge at Vereeniging Avenue, which we've almost completed and access roads. This is our Belhar Student Housing facility in Cape Town, which we're building in Cape Town, which is progressing very well. This is our Stilfontein operations by OMV. This is B&E international crushing in Lyttelton Dolomite Mine in Centurion. This is our Transkei Quarries, our Butterworth operations. This is our -- the one I've mentioned, Bauba at Kookfontein. So you can see in the last 6 months since we acquired this, we've been very busy, and we should be flat out in the next month on that operation. It's quite an exciting operation. This is our Karino Interchange. It's a bridge that we're building. This is the N3 at Cato Ridge. As you recall, we got 3 big megaprojects on this route. So if you travel to Durban, you'll see us there. This is in beginning or one of the KZN jobs. That's a nice photo. This is also Kareedouw. So you can see we cover the country quite extreme, the Eastern Cape. This is Lady Grey to Barkley East, also for SANRAL. This is Estcourt on N3. This is a bulk of land, the Ixopo plant we put up on a remote site to service those routes. This is Tosas, our bitumen site, being displayed at Beaufort West to Aberdeen. This is Roy Hill mine. It's a Westforce Construction. In the forefront, you can see that's a typical work we do. We do specialized concrete structures for the mines, and there is other industries. This is also similar concrete construction in Australia. This is our Roads division doing in the Cape Busselton highway. And if you look at that picture, it almost looked like it could be anywhere in South Africa as well. There is similar type of operations in here. This is what we do as well. We do landfill rehabilitations, structures in Western Australia for various clients, and we've done quite a number of these projects successfully. Now you will wonder why we put this photo up here. As I always get asked what our Australian operation about. And when I saw this photo, I think it simplifies exactly what we do in Australia. Now this was -- they got a construction industry, and we won our award. As you can see, we had the top construction industry of Western Australia body. Awards for civil construction project value of $10 million to $30 million. It was a vast draining upgrade concrete structures. Few things, you see a contractor wearing a suit, which you don't often see. This guy is in charge of Westforce. He's South African. But most importantly, this is a market we operate in Australia. So we're not a mega contractor. We're in $10 million to $30 million. So you can count that [indiscernible]. This is a field we're operating in. Now what's nice about this photo, we are getting recognized in Australia now of our quality workmanships as well. And you can see it translates to good results as well. So not only good results, but I think we're delivering quality projects in Australia. So that was just something I thought it's important to share with the market. Okay. We go to conclusion. The Materials division will continue to pursue strategic partnerships with mineral source owners to afford the group the opportunity to participate in various material handling purchase opportunities of the medium and long-term on that earlier. Some are back earlier. In the Roads and Earthworks division, the current tender activity in the market remains encouraging. Numerous contracts opportunities which has tendered by the group are still pending adjudication. Good base loads of work will enable higher margin opportunities. Now what we mean by that, going forward on all the new tenders, we are trying to increase or improve the quality of our margin in the order book. And then increased activity will also benefit the group's materials crushing operations, including the supply aggregates, asphalt and bitumen products. The Infrastructure division is well positioned to take advantage of the government's drive to increase power generation capacity, as I explained in that slide. opportunities to participate in a number of Public Private Partnerships are also being explored, looking to participate on a selective basis. Now just to unpack that for you, there's a number of projects on the table, but they're very expensive and time-consuming to pursue. So we're not going to chase all of them. We're going to select a couple which complements our core business and then we will focus on them. So we're not going to try and bid on all of them. In Western Australia, the construction sector continued to show high levels of activity as government continues to implement their infrastructure development stimulus program in Western Australia specifically. In Southern Africa, effective execution of our Beitbridge Border Post upgrade in Zimbabwe remains a key focus until next year, December. And the group's strong balance sheet and healthy cash reserve, positions it well for future growth and participation in the South African government's infrastructure build programs. Ladies and gentlemen, I think in a nutshell, that was group and its divisions. We will open it now to a questions-and-answer session. You're welcome to ask questions.

Thank you, Rudolf. And we've got 3 questions that comes through from Marc Ter-Mors from Standard Bank. The first question is, do you expect a common weaker seasonal H2 for financial year '22 or was the slow start of projects and margin pressure potentially compensate?

Marc, there's no reason why we shouldn't have a similar H2 than H1. Just keep in mind, obviously, H2 is 1 month shorter due to the wellness break in December. But all our contracts is up and running now. Solar won't be in this H2. So it will only be in next H1, but there's no reason why it should not be similar.

And the second question from Marc also is, what is the capacity utilization on asphalt and bitumen operations?

Okay. I'm going to bitumen first. On the bitumen side, in the high days, we use about 120,000 tonnes of bitumen. It dropped down as you recall, to 50,000 tonnes. Now we're back to 80,000 tonnes, which is quite encouraging. So we're not back at where we used to be, but at least we've turned the corner. It's profitable again. But it's always on the bitumen side, core business for the Raubex Group, because remember now, on all these contracts, we have to ensure that there's bitumen availability, which is under pressure in this country and Tosas being a bitumen company will ensure full importations. We've already bought a couple of ships into the country. We'll ensure that the group will have enough bitumen. The asphalt is a very similar side. It's picking up quite nicely, but not back at its previous height, but it's dramatically improving, and it's also profitable at this stage. So it's engaging certainly because if you recall previously, they were loss-making, which we turned the corner there.

And the last question from Marc is of the 25 renewable preferred bidders on Window 5, on how many projects is Raubex a part now?

Yes. So Marc, at this stage, it's price sensitive information. The reason for it, we have not achieved financial close. So as soon as we achieve financial close, we will announce it. It is a number of projects, so it is price sensitive. We will announce once we know exactly how many projects we've got. It's quite a number. But we need to achieve financial close before we can announce it. As we've previously said in the risk round, it's 2 big projects, which we should get. But in round 5, we need to get financial closure before we can announce it to the market.

The next question is from Richard Simpson from Obsidian Capital. Are your Western Australian operations vulnerable to the recent significant slump in iron ore prices?

I won't say not really, so 2 things there. The Western Australian government be spending a lot of money in construction and infrastructure, which should cover us. We are doing work for the mines, but to again jump back Australia market, so we do work for the mines, defense force, water boards, earth boards. So I would say our exposure is probably in the order of about 20% to 25% of the mines. So I don't think we're that exposed to the commodities going forward.

The next question is from [ Rowan Golde from Pronatearch Research ]. In South Africa, the public sector revenue growth has been strong. Going forward, where do you see growth, public or private?

Okay. Rowan, I need to unpack it for the shareholders to understand. So we've sat down and we mapped our next few years out. So on the short term, obviously, the South African infrastructure spend will give our order book gain. You saw we -- for the first time, we've got a window of 4 years. But the way we see it is a few things. So obviously, we're excited and we see ourselves playing a substantial role in renewable energy. Obviously, we would like to go Australia organically because, as you can see from the last 3 years' results, we've grown it substantially without doing major acquisitions, so we'd like to go Australia. We would like to focus on this current order book in SANRAL, which we know for at least 4 years, we'll have a strong order book. But very importantly, that's where the mining investments is coming in that we hope that that will also protect us and have a different revenue stream into the group. And then lastly, the PPPs from government. Now they're traditionally very slow in awarding the PPPs, but the concept is right. We've got a strong balance sheet. We can leverage all that. It's megaprojects. Hopefully, we can get it at a better margins. And also, typically they're prolonged type of projects, 3 to 4 years. So it's a balance between public and private. That's where our focus remains. But one, we're not going to focus on, as I said earlier, is Africa in general. But these other ones I've mentioned now is quite important going forward for us. So I think we will have a better balanced revenue stream if we can get this all right.

The next question is from [ Ethan Aru ] from Crawford Asset Management. Could you please provide more color on the number and value of tenders that you are waiting for adjudication?

That's quite difficult, Ethan, because you must remember now, we don't like -- so we only come to order book once we get official results. So there's a number of projects probably in the order of about north of ZAR 1 billion, which we are now running. Now please be careful. We're not saying we're going to get it. We believe we could be in a running and could be the preferred bidder. But until you get the award, you cannot bring it to book. So my estimate is around about ZAR 10 billion. Just to give you an example, and that's why you can't really put those numbers in until we get it. Because on Lesotho, for example, our bid was ZAR 13 billion. We were in the top-5, but we could still be in the running, because of the selection criteria and a technical evaluation of that bid. But I mean at no uncertain stage, we are saying we are not running there. So it's quite -- so there's a PPP project we're running for, a couple of SANRAL we're running for, a couple of by building projects we're running for. Now we should have a good chance to get, but we need to get it first before we can tell the market this is what we're going to get.

The next question is from Chris Reddy from All Weather Capital. Would you look to increase your stake in the strategic partnerships announced?

Chris, I presume that will be on the mining side. Yes, we would. As we go down the avenue, we've already basically increasing our stake in Bauba. You probably saw the [ Zim's ]. So yes, in the long run, we would like to increase the strategic partnership stakes, but also just for the shareholders, we're going to take small bites at these partnerships. We're not going to comment for example, ZAR 1 billion of our balance sheet to 1 specific partner. So because we believe risk profile is too big. We will take small bites at it, typically ZAR 50 million to ZAR 100 million, to give you a feel for it and to ensure us that we got the life of mines work for our companies.

Thank you, Rudolf. There seems to be no further questions.

I think let's give a minute or 2 for any more questions or more clarity on what I've discussed. There's one more from Paul?

Yes, Rudolf, the next question is from Paul Bosman from Granate Asset Management. Could you please talk to the competitive landscape in South Africa? Do you expect margins in road And Earthworks as well as infrastructure to improve? Do you have a feel for normalized margin the industry vision? And secondly, on the mining investment is more function of steering work or a function of seeing very attractive equity upside? Are you seeing many of these opportunities?

Paul, I think that's a very important questions, and I need to unpack it in detail for the shareholders to understand our order book and the way we're going forward with the mining opportunities. So on the roads and earthworks side, the competitive landscape is still very competitive. Now I would have thought of all this work, it would have improved, but it's still very competitive. We're tending to a 5% to 7% margin in this space for existing order book now. And we believe we will get to that margin. But ideally, we need to get a better margin in that space. I would afford by the number of work out there, we would have seen it. My only reason what I can give you is we come from such a low base in the roads and earthworks space, where we had for 2 or 3 years no work. Everybody needs to get busy before we see that margins improving. So we are pricing at better margins at the moment, and we'll have to see how much we can get at better margins. But the margin landscape, unfortunately, in the Roads and Earthworks division are still very competitive. Normalized margin exist in order book 5% to 7%. Going forward, hopefully, at a better margins, but that's the current landscape. Now the second one is quite an important question. The mining investment, are we looking at equity or we're looking at work? So our investments, we got a stake in the operations of those mines. Our models, we are running is a return on the actual work we're doing at the moment. So this is a better margin and work, obviously, but we look at margin returns on the actual work being done for the mine. Any equity upside, which could be -- will be a bonus for us. So the model for the money we put in, we're getting returns on the actual work we're doing. Any equity upside, it will be a bonus and it's not brought into our models at this stage. Hopefully, we will see some equity upside. But again, it's -- there's commodity pressure pricing and all sorts of things. But at this stage, it's moving material where we're going to make our money and also secures a long-term contract, because these mines typically it's a 15-year mining operation. So it will steer to us years 15 years of work, which we obviously keen as a group to get some sustainability and revenue.

Thank you. There's no question at the moment.

Okay. I'm going to end the session. Thank you very much to everybody attending and have a very good day. Thank you.