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) |