Monday, 17 February 2014 12:58

Group Five continues to deliver solid results

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Group Five reports a 40.7% rise in headline earnings per share to 204c for the six months ended December 2013 from 145c a year earlier

Mike Upton

Construction and engineering company Group Five has reported a 40.7% rise in headline earnings per share (HEPS) to 204c for the six months ended December 2013 from 145c a year earlier.

Fully diluted headline earnings per share from continuing operations of 202c per share represented a 15.4% increase over the restated 175c per share for H1 FY 2013.

Revenue from continuing operations was up 55.7% to R7.7bn‚ while operating profit from continuing operations grew 27.5% to R328m. Profit for the period rose to R218.9m from R142.3m

The company said a charge against earnings of R10.8m as a result of the implementation of the group's revised broad-based black economic empowerment (BBBEE) ownership transaction approved by shareholders in the 2013 financial year affected total operating profit.

An interim dividend of 45c per share was declared.

The group reported an impairment charge of R11.5m on assets relating to the disposal of the construction materials businesses.

Group Five said the sentiment in the markets in which it traded for the six months to end December 2013 had showed a gradual improvement‚ with South African demand still comparatively weak and the timing of a recovery remaining uncertain.

The rest of Africa and Eastern Europe are demonstrating more visible opportunity.

Despite the hiatus in the South African market‚ the group managed to deliver improved results‚ with increased revenue‚ operating profit and earnings‚ it said.

The group earnings delivered during the period demonstrated an improved performance over the comparable reporting period and were delivered following the corrective action taken in the past two years‚ specifically with regard to the construction materials cluster and the group's Middle East operations.

Looking ahead‚ the group said its total secured contracting order book (construction‚ and engineering and construction order book) stood at R14bn. In addition‚ it had R4.8bn in secured operations and maintenance contracts.

The overall group reported order book at December 2013 thus stood at R18.8bn.

The value of the group's target opportunity pipeline stood at R174bn‚ which had remained largely unchanged from R179bn at June 2013 and R124bn at December 2012‚ with R131bn of this pipeline currently in tender and pretender stage.

"The pipeline indicates a further shift in favour of oil and gas‚ as well as a strong transport sector. Water projects are slowly coming to market but real estate looks to be somewhat slower‚" it said.

It added that the outlook for the business in the short term was fair to good. The order book was being replenished in line with the group's strategy‚ with several strong short-term prospects in support of African expansion‚ particularly in power‚ transport infrastructure and real estate.

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