Wilson Bayly Holmes – Ovcon’s share price decreases following an uneventful earnings report

Wilson Bayly Holmes – Ovcon experienced a significant decline in its share price, dropping by 16% to R178.26 following the release of its earnings report for the year ending on December 31, 2025. The company, known as one of South Africa’s prominent construction and engineering groups, reported stagnant earnings, attributing it to decreased activity levels in Gauteng and reduced civil engineering work related to mining.

The company disclosed that revenue from ongoing operations dipped by 4% to R14 billion, with operating profit from these operations falling by 3% to R676 million. Directors highlighted that robust activity in South Africa was sustained by the roadwork and renewable energy sectors, as well as a resilient building market in the Western Cape. Additionally, projects in mining infrastructure in West Africa and Zambia, along with roadwork and gas-infrastructure endeavors in Mozambique, contributed to a strong performance in other parts of the continent.

Operations in the UK also performed well amidst subdued economic conditions. Headline earnings per share rose slightly to 1,086 cents from 1,072 cents in the prior year, with the order book recording a 3% decrease to R36.4 billion. The interim dividend remained unchanged at 300 cents per share.

Revenue from South Africa declined by 8% to R9.5 billion, while revenue from the rest of Africa remained stable at R1.7 billion. The UK operations experienced a 9% revenue growth, reaching R2.8 billion due to a strong performance by Russell WBHO in the region. Combined African operations generated a segment operating profit of R657 million, a decrease from R684 million in the previous year. The operating margin improved to 5.9% in Africa and 3.6% in the UK.

Within South Africa, the building division witnessed a 21% decrease in activity compared to the previous six-month period, with significant declines in Gauteng. To counter this, under-utilized teams from Gauteng were redirected to support the building sector in the Western Cape, where demand was more robust. Projects such as the South African Reserve Bank upgrades, Steyn City apartments fit-outs, and a data center construction in Midrand contributed to activity.

Coastal regions saw growth driven by the expanding building market in the Western Cape, with projects at V&A Waterfront, Century City, and Riverlands precinct providing substantial work. In the healthcare sector, projects such as the 220-bed Mediclinic hospital in George and the Siloam district hospital upgrade in Limpopo were completed. Furthermore, in the public sector, projects secured through frameworks for Education and Health departments in the Western Cape bolstered the company’s portfolio.

In other regions like Kwa-Zulu Natal, industrial and warehousing projects, residential and commercial developments were the key drivers of activity. Projects such as the Capital Hotel and new Life Hospital in Gqeberha in the Eastern Cape, and a data center in Ghana in the rest of Africa, also contributed to the company’s operations.