The share price of JSE-listed Group Five rose by more than 7.46% on Monday morning as the group reported a “pleasing improvement” in earnings for the 2016 financial year.
It noted in a trading update that its fully diluted headline earnings per share (HEPS) for the year ended June 30 were likely to be between 60% and 70% higher year-on-year at between 326c and 347c apiece.
HEPS are expected to be between 60% and 70% higher year-on-year at between 328c and 349c apiece.
Fully diluted earnings per share (EPS) are likely to be 65% to 75% higher year-on-year at between 365c and 387c, while EPS are also expected to be between 65% and 75% higher year-on-year at between 366c and 389c.
Group Five attributed the improvement in earnings to “an exceptional result” from its Investments & 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.
The cluster’s operating profit performance was also strong “with excellent delivery across all secured contracts”.
The Engineering & Construction cluster’s performance continued at low levels, with a below-expectation operating performance.
The Civil Engineering segment’s operating performance improved in line with expectations; however, Group Five raised a material provision within this segment in the second half of the financial year against a now problematic debt. The group is pursuing its rights and is hoping to recover the debt.
The Building & Housing segment is in line with guidance, while the Projects and Energy segments delivered a softer performance amid tight market conditions. The Manufacturing cluster delivered an acceptable result, despite difficult domestic trading conditions.
Group Five’s share price on the JSE rose by 7.46% to R24.48 a share on Monday morning, compared with Friday’s close of R22.78 apiece. Its shares were trading up 4.08% by 11:10 on Monday.