Construction company Group Five (GRF) reported a 63% leap in aftertax profit on slightly lower revenue for the year to end-June.
Aftertax profit grew to R457m from the prior year’s R280m‚ while revenue fell a fraction to R13.77bn from R13.88bn‚ its
Group Five declared a final dividend of 30c‚ taking its total for the year to 72c‚ a 31% increase from the prior year’s 55c.
The group segments itself into three divisions: engineering and construction‚ which contributed 85% of revenue; investments and concessions‚ which contributed 8%; and manufacturing‚ which contributed 7%.
While the engineering and construction division contributed the bulk of Group Five’s revenue‚ it contributed a R236.9m operating loss‚ which was offset by a R917m profit contribution from investments and concessions‚ and R55m from manufacturing.
The investments and concessions division’s nearly fourfold jump in profit to R917m from the prior year’s R237m was attributed to a substantial fair value profit realised on its motorway investments in Eastern Europe.
“Operating results were excellent across all business segments including G5 Properties‚ with Intertoll Europe’s performance being particularly noteworthy‚” the results statement said.
Group Five splits its engineering and construction division into four subsections. Of these‚ its civil engineering division contributed a R381m loss while building and housing made a R74m profit‚ projects a R37m profit and energy a R33m profit.
The civil engineering division’s loss includes a R365.4m provision for a potential bad debt.
Building and housing was the engineering and construction division’s strongest performer despite its profit contribution falling 18% from the previous year.
Notable successes of Group Five’s building and housing unit during the reporting period were the completion of the Nelson Mandela Children’s Hospital in Gauteng‚ the Mall of Africa in Waterfall City‚ and progress with the construction of the City of Tshwane’s public private partnership project for its new municipal headquarters‚ Munitoria.