Sanyati looks at main board

Tag : Main Board

Summit TV speaks to Rick Jackson from construction company Sanyatiabout their impending move from the AltX to the JSE main board

David Williams: Welcome to Face to Face. Im talking to RickJackson chief executive of Sanyati about their migration across theJSE. Rick, approximately two years ago you listed on the JSEAlternative Exchange (AltX) - an exciting time for the constructionsector and obviously for you - now two years later Sanyati ismigrating to the main board, why?

Rick Jackson: We always said that wed use the AltX as aspringboard - we said it would take us about two years to build upthe critical mass that we needed to get onto the main board. Soits all according to plan - but I think more than that we wantedto be compared to main board construction companies. At the momentwe tend to be compared by investors to other AltX companies thatare maybe not even in the construction industry - so it was ourintention to be compared with main board companies to compare likewith like.

David Williams: Looking at that migration - who are the companiesthat youre comparing yourselves with? Where do you fit on thescale of things in terms of market cap and scale of operations?

Rick Jackson: Were a little bigger than Protech and a bit smallerthan Stefanutti & Bressan - but in terms of the type of work weundertake we are very similar to Stefanutti & Bressan. They aregeneral civil engineering contractors with a wide variation inproducts that they provide - we are along the same lines but alittle smaller.

David Williams: Your share price dropped from R4 to around R1.50 isthe main factor this lack of valid comparison?

Rick Jackson: I think so. I think the investor tends to take flightwhen theres any trouble with smaller cap stocks. The AltXgenerally is the smaller cap stocks. I think thats whats happenedto our share. I think people need to see us as a genuineconstruction company and give us credit for where we should be.

David Williams: Other factors since youve listed - how has itgone?

Rick Jackson: Its gone very well. Weve made the acquisitions wesaid we would make. Weve boosted up our turnover to R1.8billionfor this financial year and we have an order book of R2.2billiongoing into 2010 so things look very good for us at the moment.

David Williams: That old thing in the construction industry - theratio between order book and revenue - is that exactly where youwant it to be?

Rick Jackson: Yes, it is. Its what we predicted and thats in ourfive-year forecast. Thats what we said we would do.

David Williams: What about risk? Some companies affected more thanothers by power shortages for example&

Rick Jackson: It hasnt had any affect on us. Its actuallyprovided us with quite a bit of opportunity in that Eskom is one ofour key clients - so we are doing quite a few contracts for themthe biggest being Braamhoek in Northern KwaZulu-Natal.