Key message: There is a relatively high probability that government will use SANRAL to kickstart infrastructure spending as a stimulus for the economy. Long overdue, this would boost the road construction sector.
https://chronux.co.za/wp-content/uploads/2020/04/CSB-0420-Initiation.pdf
Key message: Unprecedented volatility. Beware companies with too much operational gearing. The Construction Sector emerging as a potential safe haven (how times change!).
Key message: We examine the ability of PPC to withstand current weak markets and do some scenario analysis around debt covenants. We conclude PPC still has a robust Southern African operation able to withstand even weaker markets before covenants are tested.
Key message: Road work continues to be at very low levels, but recent tenders from SANRAL seem to indicate the potential for a significant boost in a relatively uncompetitive environment.
Key message: The challenges of operating a construction company remotely are again apparent. WBHO failed one of the three Golden Rules of Construction – avoid new geographies, new disciplines and only use the A-team. The Infrastructure business (a new discipline) in Australia is proving too challenging and should be reviewed.
Key message: The cement market is very weak. Short term relief depends on government intervention (tariffs, infrastructure program). PPC’s balance sheet is under pressure but not in trouble, but debt restructuring negotiations continue.