http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 14.09Change: -0.08
R/$ = 10.73Change: -0.06
Au 1267.46 $/ozChange: 2.59
Pt 1410.50 $/ozChange: 1.50
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Mar 04, 2010

Group Five seeks more work abroad, in private sector

Back
Group Five CEO Mike Upton discusses the company's prospects (04/03/10) Cameraperson: Nicholas Boyd; editing: Darlene Creamer
Engineering|Africa|PROJECT|Project Management|Projects|Water|Africa|South Africa|Energy|Energy Sectors|Mining|Transport|Infrastructure|Mike Upton|Power|Water|Ricoh R10 Digital Camera|Middle East
Engineering|Africa|PROJECT|Project Management|Projects|Water|Africa||Energy|Mining|Transport|Infrastructure|Power|Water||
engineering|africa-company|project|project-management|projects|water-company|africa|south-africa|energy|energy-sectors|mining|transport-industry-term|infrastructure|mike-upton|power|water|ricoh-r10-digital-camera|middle-east
More Insight
© Reuse this



Group Five was seeking a return to a “nice mix of public and private work such as before the super-boom”, said CEO Mike Upton on Thursday as he announced the company’s results for the six months ended December 31.

He was also in favour of procuring more work abroad.

Upton said this was driven by the fact that there had been a slowdown in the South African public infrastructure sector, punctuated by a 12-month hiatus in public utility contract awards.

He said several factors conspired to make this hiatus happen, including last year’s election, a new administration taking office, an erosion of the tax base, a global recession, an inherent lack of capacity in government departments to execute projects, as well as the fact that parastatals had to raise their own debt financing in a difficult market.

This all meant that the public sector was “not such as big theme” for Group Five as 12 or 18 months ago, said Upton.

Instead, the group was focusing on growth opportunities in the Middle East, and in Africa’s mining and energy sectors, including South Africa’s burgeoning private power sector.

However, Upton added that the South African government’s water, power and transport sectors were still big spenders.

He noted that the company’s civil engineering order book constituted 61% local business by the end of August 2009, but that it had now shifted to 48% by February this year.

Also, by February, around 62% of Group Five’s full order book was local public sector work, down from 80% in August 2009. Cross-border work was at 25% of order book, which Upton wanted closer to 40%.

The group’s order book was at R10,5-billion in February, down from R11,5-billion in August.

When considering a pipeline of possible projects across all sectors, Upton said the group could secure around R36-billion of work in a multiyear pipeline valued at R116-billion, which would translate into a base-load of work at R10-billion a year.

Group Five recorded a 4% drop in revenue to R5,7-billion for the six months ended December 31 compared with the same period in the previous financial year.

Operating profit was up 6% to R399-million, fully diluted headline earnings a share increased by 8%, with operating margin up from 6,3% to 7%.

Upton believed it was possible for the group to protect its margin through tackling larger multidisciplinary projects requiring design and project management capabilities, further cost savings, a further reduction in loss-making projects, and greater international exposure, as international projects carried higher margins than local projects.

Edited by: Creamer Media Reporter
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other Construction News
Despite various challenges related to the extraction of shale oil and gas, as countries grow accustomed to the idea, the use of shale as a form of energy will be more widely pursued, international oil and gas market analyst Michael Lynch said on Tuesday. Speaking at...
Regional interconnections and oil discoveries are expected to drive the transmission and distribution industry’s (T&D’s) growth in East Africa, the second-fastest growing region in Africa, global growth consulting firm Frost & Sullivan said on Tuesday. The...
Neil Gopal
The South African Property Owners’ Association (Sapoa) has appealed to Rural Development and Land Affairs Minister Gugile Nkwinti to invoke the discretionary powers available to him under the Spatial Planning and Land Use Management Act of 2013 to prevent...
More
 
 
Latest News
Despite various challenges related to the extraction of shale oil and gas, as countries grow accustomed to the idea, the use of shale as a form of energy will be more widely pursued, international oil and gas market analyst Michael Lynch said on Tuesday. Speaking at...
A consortium led by two Kenyan firms won a government tender to build a 1 000-MW, coal-fired power plant, company officials said on Tuesday, part of moves to satisfy rising demand for energy in East Africa's biggest economy. Kenya suffers from regular blackouts due...
TNPA CEO Tau Morwe
The announcement of the successful bidder for the construction of Durban’s long-awaited passenger cruise terminal was imminent, Transnet National Ports Authority (TNPA) CEO Tau Morwe told delegates at the African Ports Evolution Conference in Durban on Tuesday. ...
More
 
 
Recent Research Reports
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
Real Economy Insight: Road and Rail 2014 (PDF Report)
This six-page brief covers key developments in the road and rail industries over the past 12 months, including details of South Africa’s road and rail network and prospects for both sectors.
 
 
 
 
 
This Week's Magazine
South African State-owned defence industrial group Denel has announced its fourth consecutive year of profits. The group's results for the financial year 2013/2014 were recently announced at its head office in Centurion, south of Pretoria. Revenues grew by 17%, net...
There is little opportunity for JSE-listed infrastructure company Group Five to grow shareholder value in the domestic market, says CEO Mike Upton. He says value can still be found in the private sector, in the renewable and industrial power sector, as well as in...
The National Association of Automobile Manufacturers of South Africa (Naamsa) has announced the event dates of the 2015 Johannesburg International Motor Show (JIMS). The event will take place from October 14 to October 25, 2015, at the Johannesburg Expo Centre, Nasrec.
UK engineering support services provider Babcock is set to deliver the largest order of global truck manufacturer DAF’s truck tractors in Southern Africa to bulk carrier road-based logistics company Ngululu Bulk Carriers (NBC), with 133 trucks to be delivered in...
Digital radio communications in the African local government space can open up the world, but have many challenges to overcome, notes integration and migration of legacy radio communications infrastructure with digital mobile radio company Emcom Wireless head of...
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks