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GROUP FIVE HOLDINGS LIMITED
REGISTRATION NUMBER 88/00321/06
UNAUDITED AUDITED
GROUP INCOME STATEMENT (R'000)
SIX MONTHS ENDED YEAR ENDED
31 DECEMBER 30 JUNE
1998 1997 1998
REVENUE 1,322,465 1,483,496 2,925,946
OPERATING PROFIT 19,199 36,296 109,138
FINANCE COSTS (8,131) (2,960) (8,162)
PROFIT BEFORE TAXATION 11,068 33,336 100,976
TAXATION (3,393) (9,874) (32,647)
PROFIT AFTER TAXATION 7,675 23,462 68,329
OUTSIDE SHAREHOLDERS' INTEREST (5,425) (16,548) (47,987)
ATTRIBUTABLE EARNINGS 2,250 6,914 20,342
DIVIDENDS (2,071) (2,071) (5,292)
RETAINED PROFIT FOR THE PERIOD 179 4,843 15,050
OPERATING PROFIT IS STATED AFTER CREDITING:
ATTRIBUTABLE PROFIT BEFORE TAX OF
ASSOCIATES 688 2,033 8,471
AND AFTER CHARGING:
DEPRECIATION AND AMORTISATION 43,616 37,784 67,917
ABRIDGED GROUP BALANCE SHEET UNAUDITED AUDITED
(R'000) 31 DECEMBER 31 30 JUNE
DECEMBER 1998
1998 1997
CAPITAL EMPLOYED
ORDINARY SHAREHOLDERS' INTEREST 125,361 116,154 126,531
OUTSIDE SHAREHOLDERS' INTEREST 289,793 258,041 286,552
DEFERRED TAXATION 35,549 38,160 26,381
LONG TERM LIABILITIES 3,421 14,737 14,307
454,124 427,092 453,771
EMPLOYMENT OF CAPITAL
FIXED ASSETS 381,533 363,687 370,963
ASSOCIATES 39,968 32,484 36,668
INVESTMENTS 29,676 21,937 29,125
NET CURRENT ASSETS 2,947 8,984 17,015
BANK BALANCES & CASH 121,620 85,193 158,567
OTHER CURRENT ASSETS 589,511 604,945 925,475
TOTAL CURRENT ASSETS 711,131 690,138 1,084,042
ACCOUNTS PAYABLE 623,672 615,669 946,317
BANK OVERDRAFTS AND
SHORT TERM BORROWINGS 82,441 63,414 117,489
SHAREHOLDERS FOR DIVIDEND 2,071 2,071 3,221
TOTAL CURRENT LIABILITIES 708,184 681,154 1,067,027
454,124 427,092 453,771
INVESTMENTS
UNLISTED SHARES AT COST AND DIRECTORS' 29,676 21,937 29,125
VALUATION
CAPITAL EXPENDITURE FOR THE PERIOD 54,183 49,156 114,851
CAPITAL EXPENDITURE COMMITTED OR
AUTHORISED 22,555 74,159 121,912
STATISTICS
NUMBER OF ORDINARY SHARES IN ISSUE 23 007 545 23 007 545 23 007 545
EARNINGS PER SHARE - CENTS 9.8 30.1 88.4
DIVIDEND COVER 1.1 3.3 3.8
DIVIDENDS PER SHARE -
CENTS 9.0 9.0 23.0
INTERIM 9.0 9.0 9.0
FINAL 14.0
NET ASSET VALUE PER SHARE - CENTS 544.9 504.9 550.0
CURRENT RATIO 1.0 1.0 1.0
GROUP FIVE LIMITED
REGISTRATION NUMBER 69/00032/06
GROUP INCOME STATEMENT (R'000) UNAUDITED AUDITED
SIX MONTHS ENDED 31 YEAR ENDED
DECEMBER 30 JUNE
1998 1997 1998
REVENUE 1,322,465 1,483,496 2,925,946
OPERATING PROFIT 19,199 36,296 109,138
FINANCE COSTS (8,131) (2,960) (8,162)
PROFIT BEFORE TAXATION 11,068 33,336 100,976
TAXATION (3,393) (9,874) (32,647)
PROFIT AFTER TAXATION 7,675 23,462 68,329
OUTSIDE SHAREHOLDERS' INTEREST (313) (840) (1,848)
ATTRIBUTABLE PROFIT 7,362 22,622 66,481
DIVIDENDS (6,622) (6,622) (17,658)
RETAINED PROFIT FOR THE PERIOD 740 16,000 48,823
OPERATING PROFIT IS STATED AFTER
CREDITING:
ATTRIBUTABLE PROFIT BEFORE TAX OF 688 2,033 8,471
ASSOCIATES
AND AFTER CHARGING:
DEPRECIATION AND AMORTISATION 43,616 37,784 67,917
ABRIDGED GROUP BALANCE SHEET UNAUDITED AUDITED
(R'000) 31 31 30 JUNE
DECEMBER DECEMBER
1998 1997 1998
CAPITAL EMPLOYED
ORDINARY SHAREHOLDERS' INTEREST 412,391 373,936 412,772
OUTSIDE SHAREHOLDERS' INTEREST 2,541 192 89
DEFERRED TAXATION 35,549 38,160 26,381
LONG TERM LIABILITIES 3,421 14,737 14,307
453,902 427,025 453,549
EMPLOYMENT OF CAPITAL
FIXED ASSETS 381,533 363,687 370,963
ASSOCIATES 39,968 32,484 36,668
INVESTMENTS 29,676 21,937 29,125
NET CURRENT ASSETS 2,725 8,917 16,793
BANK BALANCES & CASH 121,620 85,193 158,567
OTHER CURRENT ASSETS 589,511 604,945 922,098
TOTAL CURRENT ASSETS 711,131 690,138 1,080,665
ACCOUNTS PAYABLE 619,343 611,185 935,977
BANK OVERDRAFTS AND
SHORT TERM BORROWINGS 82,441 63,414 117,489
SHAREHOLDERS FOR DIVIDEND 6,622 6,622 10,406
TOTAL CURRENT LIABILITIES 708,406 681,221 1,063,872
453,902 427,025 453,549
SUMMARISED CASH FLOW
STATEMENT (R'000)
CASH FLOW FROM OPERATING ACTIVITIES
CASH FROM OPERATIONS 62,602 72,289 160,809
WORKING CAPITAL CHANGES 39,654 (53,858) (69,536)
CASH GENERATED FROM OPERATIONS 102,256 18,431 91,273
FINANCE COST (8,131) (2,960) (8,162)
TAXATION AND DIVIDENDS PAID (27,104) (14,085) (32,573)
NET CASH FROM OPERATING ACTIVITIES 67,021 1,386 50,538
FIXED ASSETS (54,183) (50,014) (79,466)
INVESTMENT (3,851) (50,604) (50,604)
NET INCREASE/(DECREASE) IN CASH 8,987 (99,232) (79,532)
EQUIVALENTS
INVESTMENTS
UNLISTED SHARES AT COST AND DIRECTORS' 29,676 21,937 29,125
VALUATION
CAPITAL EXPENDITURE FOR THE PERIOD 58,648 59,934 99,601
CAPITAL EXPENDITURE COMMITTED OR 22,555 74,159 121,912
AUTHORISED
STATISTICS
NUMBER OF ORDINARY SHARES IN ISSUE 73 573 023 73 573 023 73 573 023
EARNINGS PER SHARE - CENTS 10.01 30.75 90.36
DIVIDEND COVER 1.1 3.4 3.8
DIVIDENDS PER SHARE -
CENTS 9.0 9.0 24.0
INTERIM 9.0 9.0 9.0
FINAL 15.0
NET ASSET VALUE PER SHARE - CENTS 560.5 508.3 561.0
CURRENT RATIO 1.0 1.0 1.0
SM GOLDSTEIN LIMITED
REGISTRATION NUMBER 05/29557/06
GROUP INCOME STATEMENT (R'000)
UNAUDITED AUDITED
SIX MONTHS ENDED YEAR ENDED
31 DECEMBER 30 JUNE
1998 1997 1998
SHARE OF ASSOCIATE'S PROFIT BEFORE
TAXATION 1,496 4,515 13,808
SHARE OF ASSOCIATE'S TAXATION (471 ) (1,372) (4,570)
ATTRIBUTABLE EARNINGS 1,025 3,143 9,238
DIVIDENDS (900) (900) (2,299)
RETAINED PROFIT FOR THE PERIOD 125 2,243 6,939
ABRIDGED GROUP BALANCE SHEET (R'000)
UNAUDITED AUDITED
31 DECEMBER 31 DECEMBER 30 JUNE
1998 1997 1998
CAPITAL EMPLOYED
ORDINARY SHAREHOLDERS' INTEREST 67,739 63,067 67,763
EMPLOYMENT OF CAPITAL
INVESTMENTS 67,378 62,746 67,378
NET CURRENT ASSETS 361 321 385
OTHER CURRENT ASSETS 1,317 1,287 1,850
TOTAL CURRENT ASSETS 1,317 1,287 1,850
ACCOUNTS PAYABLE 56 66 66
SHAREHOLDERS FOR DIVIDEND 900 900 1,399
TOTAL CURRENT LIABILITIES 956 966 1,465
67,739 63,067 67,763
STATISTICS
NUMBER OF ORDINARY SHARES IN ISSUE 9 995 000 9 995 000 9 995 000
EARNINGS PER SHARE - CENTS 10.3 31.4 92.4
DIVIDEND COVER 1.1 3.5 4.0
DIVIDENDS PER SHARE - CENTS 9.0 9.0 23.0
INTERIM 9.0 9.0 9.0
FINAL 14.0
NET ASSET VALUE PER SHARE - CENTS 677.7 631.0 678.0
CURRENT RATIO 1.4 1.3 1.3
GROUP STRUCTURE
THE INCOME OF GROUP FIVE HOLDINGS LIMITED IS DERIVED ENTIRELY FROM ITS 30,6%
INTEREST IN GROUP FIVE LIMITED WITH THE INCOME ACCRUING ON EACH SHARE
APPROXIMATING 98% OF THE INCOME ON EACH GROUP FIVE LIMITED SHARE. THE INCOME
OF SM GOLDSTEIN LIMITED IS DERIVED ENTIRELY FROM ITS 45% INTEREST IN GROUP FIVE
HOLDINGS LIMITED. THE INCOME ACCRUING ON EACH SHARE IN SM GOLDSTEIN LIMITED
EQUATES TO APPROXIMATELY 102% OF THE INCOME ON EACH GROUP FIVE LIMITED SHARE.
THE COMMENTS AND PROSPECTS BELOW ARE THUS EQUALLY RELEVANT TO ALL THREE
COMPANIES.
COMMENTS
OPERATING PROFIT IS 47% LOWER THAN THE COMPARABLE PERIOD IN THE PREVIOUS YEAR
DUE TO FACTORY CLOSURES AND ORGANISATIONAL RESTRUCTURING COSTS WITHIN THE
MANUFACTURING OPERATIONS TOTALLING R20 MILLION.
THE RATIONALISATIONS WERE UNDERTAKEN IN ORDER TO ALIGN THE GROUP'S
MANUFACTURING CAPACITIES WITH CURRENT AND EXPECTED MARKET DEMAND. THE
SIGNIFICANT EXTENT OF THE RATIONALISATIONS RESULTED IN THE COSTS THEREOF
EXCEEDING THOSE ORIGINALLY ENVISAGED. HOWEVER, THE ANNUAL FIXED COSTS OF THE
MANUFACTURING OPERATIONS HAVE NOW BEEN REDUCED BY MORE THAN R30 MILLION WHICH
WILL RESULT IN HIGHER LEVELS OF PROFITABILITY ON LOWER SALES VOLUMES. THE
BENEFITS OF THE ACTIONS TAKEN WILL START ACCRUING IN THE NEXT SIX MONTHS.
THE OVERALL RESULTS OF THE GROUP'S CONSTRUCTION ACTIVITIES WERE IN LINE WITH
EXPECTATIONS BUT THE MANUFACTURING DIVISION'S TRADING PERFORMANCE FOR THE SIX
MONTHS WAS ADVERSELY AFFECTED BY LOWER SALES VOLUMES. THIS ADVERSE EFFECT WAS
LARGELY OFFSET BY THE RESULTS ARISING FROM THE ACTIONS TAKEN IN THE PREVIOUS
YEAR TO CURTAIL LOSSES ON HEAD LEASES, RESIDENTIAL PROPERTIES AND RUBICO.
THE INCREASE IN INTEREST RATES, COUPLED WITH HIGH SEASONAL LOCAL BORROWINGS,
RESULTED IN AN INCREASE IN FINANCE COSTS. CASH FLOWS IMPROVED DURING THE
LATTER PART OF THE YEAR AND BY BALANCE SHEET DATE THE GROUP WAS UNGEARED.
THE BOARD HAS DECIDED TO MAINTAIN THE INTERIM DIVIDEND AT THE SAME LEVEL AS
THAT OF THE PREVIOUS YEAR, AS THE REASON FOR THE DECLINE IN PROFIT IS
ATTRIBUTABLE TO RESTRUCTURING EXPENDITURES WHICH WILL NOT RECUR.
YEAR 2000 COMPLIANCE
THE GROUP HAS BEEN IMPLEMENTING ITS YEAR 2000 PROJECT SINCE NOVEMBER 1997 TO
ENSURE THAT ALL ITS SYSTEMS ARE YEAR 2000 COMPLIANT BY JUNE 1999.
THE GROUP IS ALSO ATTEMPTING TO ENSURE THAT ALL OF ITS BUSINESS PARTNERS WHO
MAY IMPACT MATERIALLY ON THE GROUP'S BUSINESSES WILL BE YEAR 2000 COMPLIANT.
THE GROUP DOES NOT EXPECT ANY MATERIAL OPERATING DIFFICULTIES TO ARISE AS IT
HAS MADE SIGNIFICANT PROGRESS TOWARDS ACHIEVING FULL COMPLIANCE.
PROSPECTS
AS ENVISAGED AT THE END OF THE PREVIOUS FINANCIAL YEAR, LOCAL MARKET CONDITIONS
HAVE DETERIORATED SIGNIFICANTLY DUE TO A DECLINE IN GDP AND THE PERSISTENCE OF
HIGH INTEREST RATES.
THESE CONDITIONS HAVE ADVERSELY AFFECTED BOTH THE MANUFACTURING AND BUILDING
ACTIVITIES WITH LOWER SALES AND PRODUCTION VOLUMES AND DEFERMENT OF MAJOR
PROJECTS BEING EXPERIENCED.
THE TIMING AND EXTENT OF CHANGES IN MARKET CONDITIONS IS DIFFICULT TO ASSESS IN
THE LIGHT OF THE CURRENT VOLATILITY IN LOCAL AND GLOBAL MARKETS. IN THESE
CIRCUMSTANCES WE HAVE POSITIONED THE GROUP TO BE ABLE TO RESPOND RAPIDLY TO
CHANGING LOCAL ECONOMIC CONDITIONS AND CONTINUE TO EXPLORE OVER BORDER
OPPORTUNITIES. WE HAVE ALSO FOCUSED ON FURTHER IMPROVING OUR CASH FLOWS.
UNLESS THERE IS A MARKED DETERIORATION IN TRADING CONDITIONS, THE RESULTS OF
THE GROUP FOR THE NEXT SIX MONTHS SHOULD APPROXIMATE THOSE OF THE COMPARABLE
PERIOD IN THE PREVIOUS YEAR.
DIVIDEND DECLARATION BY GROUP FIVE LIMITED, GROUP FIVE HOLDINGS LIMITED AND SM
GOLDSTEIN LIMITED
THE DIRECTORS HAVE DECLARED AN INTERIM DIVIDEND OF 9 CENTS PER ORDINARY SHARE
(1997:9 CENTS) AND 9 CENTS PER GROUP FIVE LIMITED 'N' ORDINARY SHARE (1997:9
CENTS) PAYABLE TO SHAREHOLDERS REGISTERED IN THE BOOKS OF THE COMPANIES AT THE
CLOSE OF BUSINESS ON FRIDAY 19 MARCH 1999. DIVIDEND CHEQUES WILL BE POSTED TO
SHAREHOLDERS ON OR ABOUT 6 APRIL 1999.
ON BEHALF OF THE BOARD
M H LOMAS H C TURNER
17 FEBRUARY 1999
REGISTERED OFFICE
371 RIVONIA BOULEVARD, RIVONIA, 2128
TEL 806 0111 E-MAIL INFO@G5.CO.ZA
FAX 803 1324 WEBSITE WWW.G5.CO.ZA
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