WBHO’s performance in 1H25 was solid, driven by strong performances from roadwork and civil engineering. It was able to maintain a healthy order book, though it experienced declines in building and civil engineering work. Growth in the order book came from a string of large awards from Sanral during the half and post-period end, as well as an improvement in the UK order book.
While the UK order book has increased, it has not recovered to optimal levels to aid revenue growth and expand margins. According to management, the UK market remains tough and they hope further rate cuts and moderating inflation could help boost activity and improve project viability.
Although the UK market may be subdued and faces the threat of a trade war, our analysis shows that there are opportunities for growth. In this report, we analyse the effect of continued negative macroeconomic factors in the UK, compare WBHO to its regional peers, and show that there is sufficient work in the market, more specifically in the West Midlands, North West and London, the areas where it focuses.
We also assess the building and roadwork markets in SA. Though building activity in SA continues to decline, there are green shoots in certain provinces. The recovery in FY25 Sanral awards and planned spending by the National Roads Agency also bode well for growth in the sector and for WBHO.
We expect the second half of the year to be tougher for WBHO, as many project awards were delayed and are unlikely to contribute to FY25. However, the strong pipeline of civil engineering and roadwork, coupled with the improved outlook for SA, provide us with confidence in the group’s growth prospects in FY26.