Construction company Group Five’s (GRF) share price jumped 7.5% to R24.48 on Monday morning after it said it expected to report that its earnings had improved as much as 70%.
Group Five said in a trading statement on Monday morning it expected to report on August 15 that its headline earnings per share (HEPS) for the year to end-June were between 60% and 70% higher than the previous year’s R2.05.
“This improved performance was driven by an exceptional result from the investments and concessions cluster‚ boosted by significant fair value profit realised from the group’s Eastern European project investment portfolio as a result of underlying project cash-flows being materially better than those originally forecast. Operating profit performance was also strong with excellent delivery across all secured contracts‚” Monday’s trading statement said.
“Performance by the engineering and construction cluster continued at low levels with operating performance below expectation. The civil engineering segment’s operating performance improved in line with expectations‚ however‚ the group raised a material provision within this segment in the second half of the financial year against a previously certified but now problematic debt. The group is pursuing its rights on this matter with a focus on recovery.
“The building and housing segment is generally in line with recent guidance provided in February. A softer performance by the projects and energy segments was realised‚ which reflect continued overall tight market conditions‚” Group Five said.
Despite extremely difficult South African trading conditions‚ the manufacturing cluster delivered an acceptable‚ albeit lower‚ result.