Journey to Best-in-Class
 



Strategy

Management have established a target to grow Group revenues by over 20% per annum through establishing operations in Africa and widening its project delivery services to its clients.

Erbacon's medium-term strategy is to be a "Best-in Class" contractor in the heavy civil engineering construction and commercial and industrial building services.

A "Best-in-Class" strategy requires a focus on three key areas of the business:

  • The continuous development of a quality order book.
    Key issues
    • Long term customer relationships
    • Tender risk evaluation
    • Ability to leverage construction capability
       
  • Excellence in project implementation.
    Key issues
    • Build quality
    • Innovative lowest cost delivery for client
    • Cost and schedule predictability
    • Managing of contract changes
    • Continuous on-site risk audits
       
  • Business sustainability, including safety, Black empowerment, people capacity, sound governance and liquidity.
    Key issues
    • People selection and retention
    • Commercial management
    • Safety culture
    • Balance sheet strength

Erbacon has established a set of key performance indicators that it measures itself against on its journey to best-in-class.

  Best in Class Standards
Revenue growth > 20%
EBIT margin > 5%
Number of loss making contracts Zero
ROE > 20%
PE Ratio > 10
Free cash at bank > 20% tangible net asset value
Order book > 80% of revenue
% tenders won > 20%
% repeat work > 33%
% negotiated work > 33%
Staff turnover < 15%
BEE shareholding >25%
Safety- disabling injuries Zero (LTIFR < 1)