Johannesburg - Listed construction company Group Five says its earnings for the year to June showed a “pleasing” improvement.
This, it says in a statement, is thanks to 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”.
Group Five is currently in the Competition Tribunal’s spotlight for alleged collusive tendering on South African National Roads Agency (Sanral) contracts. It has been ordered to plead in the matter and recently lost its bid to obtain access to additional information.
The company allegedly entered a collusive tendering agreement with WBHO and Concor, a wholly-owned subsidiary of Murray & Roberts, on a tender for the rehabilitation of a section of the national road between Senekal and Vaalpenspruit in the Free State in 2006.
However, Group Five - which has a mostly flat order book at R17.3 billion - reported revenue mostly unchanged at R13.8 billion. This is as units that grew revenue saw those gains mostly offset by income declines in other units.
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Core operating profit increased 111.4 percent from R348.4 million to R736.5 million, while headline earnings per share of 335 cents represents an increase of 63.6 percent year-on-year. Headline earnings are seen as a key performance indicator.
Earnings per share gained 69 percent to 375.
Group Five notes it has no gearing and R3.3 billion in the bank. It declared a 30 cents a share dividend.
CEO Eric Vemer says the results “bear testimony to our strategy of investing and operating across the infrastructure value chain, which enables the generation of an improved blended group operating margin and the delivery of annuity income to deliver sustained returns.”
Vemer adds, after the company’s cost cutting, it is now focused outwardly on target markets and securing orders.
“Alongside our South African focus, we have a clear geographic strategy of expanding into high-growth countries in the rest of Africa and Europe.”
IOL