Group Five back in the black as it records R299m profit
JSE-listed construction company Group Five on Monday reported net profit of R299-million for the financial year ended June 30, reversing a R230-million loss recorded in 2012. Revenue from contiuing operations was up 27% to R11.13-billion.
With almost all of the group’s problem contracts in the Middle East closed out, as well as its loss-making construction materials businesses sold, Group Five CEO Mike Upton said he was “pleased to show an improved set of results”.
The group’s operating margin improved from 3.8% to 5%, while all of the company’s business units showed a healthy increase in core operating profit and revenue.
Group Five’s construction order book also jumped 26% from June 2012 to June 2013, reaching R14.23-billion.
With 79% of order-book business in South Africa, and 21% in the rest of Africa, Upton said Group Five remained firm in its intent to secure more business cross-border.
A noticeable trend in the construction order book, broken down by sector, was that Group Five’s participation in the mining industry dropped from 20% in the previous financial year, to 10%. However, Upton regarded this as a positive move, as it reduced the group’s reliance on a single sector.
In contrast to this, contracts in the oil and gas sector had increased from 8% to 15% of the order book, with business in the power sector up from 20% to 22%.
The real estate sector made up 34% of the order book.
The group’s non-construction, annuity-type, multiyear secured order book stood at R4.8-billion on June 30.
Commenting on the South African market, Upton said there was no indication yet of government’s infrastructure expansion plans coming to fruition.
He also noted that the local construction market remained tough, with low margins, especially in the building sector. Certain disciplines, such as roads, also faced low prices.
Group Five’s pipe business, however, expected a record year in terms of volumes.
“We are concerned about increased labour activism,” added Upton.
Looking ahead, he said he expected modest improvements in group margin and earnings for Group Five in the 2014 financial year, with this linked more to the company’s internal restructuring than the slight market recovery seen to date.
Comments
Press Office
Announcements
What's On
Subscribe to improve your user experience...
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation