Group Five sees headline earnings up by halfComment on this story
Group Five expected an increase of between 20 percent and 30 percent in fully diluted earnings a share from continuing operations for the year to June from the R3.18 it posted in the previous year, the listed construction and engineering group said yesterday.
Headline earnings a share for the period were expected to be 40 percent to 50 percent higher than the previous year’s R2.83.
The company said the underlying performance of all its businesses was in line with expectations, but pleasing in the context of weak domestic markets.
It added that the effects of continued fragility in the South African building and civil engineering markets had to some extent been mitigated by the beneficial contribution of the group’s strategic positioning for annuity-type businesses of investments and concessions, manufacturing and operations and maintenance contracts. Its strong position in African mining and energy and its leading position in the domestic water and power sector also contributed.
Group Five said all business segments performed largely in line with expectations and guidance provided in February with the exception in the second half of the financial year of the civil engineering margin, which was recovering more slowly than expected from the weak first-half position previously reported.
Group Five reminded shareholders that its annual financial results last year had been affected by several once-off issues, including a provision for an administrative penalty on four contracts that did not fall within the group’s leniency agreement with the Competition Commission; the remnant operating losses and impairment incurred in its construction materials businesses prior to their sale or transfer; and close-out costs for the group’s Middle East operations.
It will be releasing its annual financial results on August 13.
The shares climbed 3.29 percent to close at R38.62 yesterday.