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GROUP FIVE LIMITED
REGISTRATION NUMBER 69/0032/06
GROUP INCOME STATEMENT (R'000) AUDITED
YEAR ENDED 30 JUNE
1999 1998
REVENUE 2,673,434 2,925,946
OPERATING PROFIT 94,819 109,138
FINANCE COSTS (12,084) (8,162)
PROFIT BEFORE TAXATION 82,735 100,976
TAXATION (19,777) (32,647)
PROFIT AFTER TAXATION 62,958 68,329
MINORITY INTEREST (1,014) (1,848)
ATTRIBUTABLE PROFIT 61,944 66,481
DIVIDENDS (17,658) (17,658)
RETAINED PROFIT FOR THE YEAR 44,286 48,823
OPERATING PROFIT IS STATED AFTER CREDITING:
ATTRIBUTABLE PROFIT BEFORE TAX OF ASSOCIATES 13,210 8,471
AND AFTER CHARGING:
DEPRECIATION AND AMORTISATION 67,198 67,917
ABRIDGED GROUP BALANCE SHEET (R'OO0) AUDITED
30 JUNE 30 JUNE
1999 1998
CAPITAL EMPLOYED
ORDINARY SHAREHOLDERS' INTEREST 452,243 412,772
MINORITY INTEREST 5,182 89
DEFERRED TAXATION 10,003 26,381
LONG TERM LIABILITIES 6,794 14,307
474,222 453,549
EMPLOYMENT OF CAPITAL
FIXED ASSETS 359,746 370,963
ASSOCIATES 45,127 36,668
INVESTMENTS 29,918 29,125
NET CURRENT ASSETS 39,431 16,793
BANK BALANCES & CASH 172,106 158,567
OTHER CURRENT ASSETS 868,135 922,098
TOTAL CURRENT ASSETS 1,040,241 1,080,665
ACCOUNTS PAYABLE 869,770 935,977
BANK OVERDRAFTS AND SHORT TERM BORROWINGS 120,634 117,489
SHAREHOLDERS FOR DIVIDEND 10,406 10,406
TOTAL CURRENT LIABILITIES 1,000,810 1,063,872
474,222 453,549
SUMMARISED CASH-FLOW STATEMENT (R'000)
CASH FLOW FROM OPERATING ACTIVITIES
CASH FROM OPERATIONS 134,766 158,925
WORKING CAPITAL CHANGES (11,555) (73,955)
CASH GENERATED FROM OPERATIONS 123,211 84,970
FINANCE COST (12,084) (8,162)
TAXATION AND DIVIDENDS PAID (45,385) (26,514)
NET CASH FROM OPERATING ACTIVITIES 65,742 50,294
FIXED ASSETS (NET) (52,206) (71,538)
INVESTMENTS (NET) 3,772 (53,775)
FINANCING ACTIVITIES (12,874) (3,717)
NET INCREASE/(DECREASE) IN CASH AND 4,434 (78,736)
CASH EQUIVALENTS
INVESTMENTS
UNLISTED SHARES AT COST AND DIRECTORS' 29,918 29,125
VALUATION
CAPITAL EXPENDITURE FOR THE YEAR 96,904 107,416
CAPITAL EXPENDITURE COMMITTED OR 96,210 121,912
AUTHORISED
STATISTICS
NUMBER OF ORDINARY SHARES IN ISSUE 73 573 023 73 573 023
EARNINGS PER SHARE - CENTS 84.2 90.4
DIVIDEND COVER 3.5 3.8
DIVIDENDS PER SHARE -
CENTS 24.0 24.0
INTERIM 9.0 9.0
FINAL 15.0 15.0
NET ASSET VALUE PER SHARE - CENTS 614.7 561.0
CURRENT RATIO 1.0 1.0
GROUP FIVE HOLDINGS LIMITED
REGISTRATION NUMBER 88/00321/06
GROUP INCOME STATEMENT (R'000) AUDITED
YEAR ENDED 30 JUNE
1999 1998
REVENUE 2,673,434 2,925,946
OPERATING PROFIT 94,819 109,138
FINANCE COSTS (12,084) (8,162)
PROFIT BEFORE TAXATION 82,735 100,976
TAXATION (19,777) (32,647)
PROFIT AFTER TAXATION 62,958 68,329
MINORITY INTEREST (43,976) (47,987)
ATTRIBUTABLE PROFIT 18,982 20,342
DIVIDENDS (5,292) (5,292)
RETAINED PROFIT FOR THE YEAR 13,690 15,050
OPERATING PROFIT IS STATED AFTER CREDITING:
ATTRIBUTABLE PROFIT BEFORE TAX OF ASSOCIATES 13,210 8,471
AND AFTER CHARGING.
DEPRECIATION AND AMORTISATION 67,198 67,917
ABRIDGED GROUP BALANCE SHEET (R'000) AUDITED
30 JUNE 30 JUNE
1999 1998
CAPITAL EMPLOYED
ORDINARY SHAREHOLDERS' INTEREST 138,748 126,531
MINORITY INTEREST 319,008 286,552
DEFERRED TAXATION 10,003 26,381
LONG TERM LIABILITIES 6,794 14,307
474,553 453,771
EMPLOYMENT OF CAPITAL
FIXED ASSETS 359,746 370,963
ASSOCIATES 45,127 36,668
INVESTMENTS 29,918 29,125
NET CURRENT ASSETS 39,762 17,015
BANK BALANCES & CASH 172,106 158,567
OTHER CURRENT ASSETS 871,688 925,475
TOTAL CURRENT ASSETS 1,043,794 1,084,042
ACCOUNTS PAYABLE 880,177 946,317
BANK OVERDRAFTS AND
SHORT TERM BORROWINGS 120,634 117,489
SHAREHOLDERS FOR DIVIDEND 3,221 3,221
TOTAL CURRENT LIABILITIES 1,004,032 1,067,027
474,553 453,771
INVESTMENTS
UNLISTED SHARES AT COST AND DIRECTORS' 29,918 29,125
VALUATION
CAPITAL EXPENDITURE FOR THE YEAR 96,904 107,416
CAPITAL EXPENDITURE COMMITTED OR 96,210 121,912
AUTHORISED
STATISTICS
NUMBER OF ORDINARY SHARES IN ISSUE 23 007 545 23 007 545
EARNINGS PER SHARE-CENTS 82.5 88.4
DIVIDEND COVER 3.6 3.8
DIVIDENDS PER SHARE -
CENTS 23.0 23.0
INTERIM 9.0 9.0
FINAL 14.0 14.0
NET ASSET VALUE PER SHARE - CENTS 603.1 550.0
CURRENT RATIO 1.0 1.0
SM GOLDSTEIN LIMITED
REGISTRATION NUMBER 05/29557/06
GROUP INCOME STATEMENT (R'000)
AUDITED
YEAR ENDED 30 JUNE
1999 1998
SHARE OF ASSOCIATE'S PROFIT BEFORE TAXATION 10,547 13,808
SHARE OF ASSOCIATE'S TAXATION (1,964) (4,570)
ATTRIBUTABLE PROFIT 8,583 9,238
DIVIDENDS (2,299) (2,299)
RETAINED PROFIT FOR THE YEAR 6,284 6,939
ABRIDGED GROUP BALANCE SHEET (R'000)
AUDITED
30 JUNE 30 JUNE
1999 1998
CAPITAL EMPLOYED
ORDINARY SHAREHOLDERS' INTEREST 74,047 67,763
EMPLOYMENT OF CAPITAL
INVESTMENTS 73,557 67,378
NET CURRENT ASSETS 490 385
OTHER CURRENT ASSETS 1,945 1,850
TOTAL CURRENT ASSETS 1,945 1,850
ACCOUNTS PAYABLE 56 66
SHAREHOLDERS FOR DIVIDEND 1,399 1,399
TOTAL CURRENT LIABILITIES 1,455 1,465
74,047 67,763
STATISTICS
NUMBER OF ORDINARY SHARES IN ISSUE 9 995 000 9 995 000
EARNINGS PER SHARE - CENTS 85.9 92.4
DIVIDEND COVER 3.7 4.0
DIVIDENDS PER SHARE -
CENTS 23.0 23.0
INTERIM 9.0 9.0
FINAL 14.0 14.0
NET ASSET VALUE PER SHARE - CENTS 740.8 678.0
CURRENT RATIO 1.3 1.3
GROUP FIVE : COMMENTS TO 1999 ANNUAL FINANCIAL RESULTS
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
DESPITE POOR TRADING CONDITIONS AND FACTORY CLOSURE COSTS OF R23.2 MILLION,
EARNINGS PER SHARE ONLY DECLINED BY 6.8% FROM 90.4 CENTS PER SHARE TO 84.2
CENTS PER SHARE. THIS LEVEL OF EARNINGS AND THE GROUP'S POSITIVE CASH FLOW
ENABLED THE DIRECTORS TO MAINTAIN THE DIVIDEND PAYMENT FOR THE YEAR AT 24 CENTS
PER SHARE.
THE GROUP'S CONSTRUCTION ACTIVITIES ONCE AGAIN PRODUCED EXCELLENT RESULTS WITH
BOTH THE CIVILS AND ENGINEERING DIVISIONS EXCEEDING THEIR PREVIOUS YEAR'S
PERFORMANCE. TOUGH ECONOMIC CONDITIONS RESULTED IN A SMALL DROP IN THE ROADS
AND BUILDING DIVISIONS PROFITABILITY RELATIVE TO THE PREVIOUS YEAR.
THE RESULTS OF THE MANUFACTURING DIVISION FOR THE YEAR WERE EXTREMELY
DISAPPOINTING. ADVERSE MARKET CONDITIONS RESULTED IN DPI PLASTICS PRODUCING
CONSIDERABLY LOWER TRADING RESULTS AND THE FIBRE CEMENT OPERATIONS CONSISTING
OF EVERITE BUILDING PRODUCTS AND EVERITE AC PIPES RECORDING LOSSES. HOWEVER,
VAAL SANITARYWARE MANAGED TO IMPROVE ITS PROFITABILITY OVER THE PREVIOUS YEAR
DUE TO THE BENEFITS ARISING FROM RESTRUCTURING.
THE OVERALL PERFORMANCE FOR THE CURRENT YEAR HAS BEEN FAVOURABLY AFFECTED BY
THE ELIMINATION OF THE SUBSTANTIAL LOSSES INCURRED IN THE PREVIOUS YEAR IN
RESPECT OF RESIDENTIAL PROPERTIES, HEAD LEASES AND THE GROUP'S COMMERCIAL I.T.
OPERATIONS. IN ADDITION THE EFFECTIVE TAX RATE DROPPED FROM 32% TO 24%.
WHILST HIGH INTEREST RATES AND SEASONAL BORROWINGS IMPACTED NEGATIVELY ON THE
FINANCE COSTS, THE GROUP'S CASH FLOW WAS POSITIVE RESULTING IN A FURTHER
STRENGTHENING OF THE BALANCE SHEET.
PROSPECTS
THE MARKET FOR MANUFACTURED BUILDING PRODUCTS AND CONSTRUCTION SERVICES REMAINS
DEPRESSED IN SPITE OF A DECLINE IN INTEREST RATES AND IMPROVED BUSINESS
CONFIDENCE FOLLOWING THE SATISFACTORY COMPLETION OF THE ELECTIONS. WE ARE
HOPEFUL THAT MARKET CONDITIONS WILL START IMPROVING FROM THE BEGINNING OF THE
NEXT CALENDAR YEAR.
FOLLOWING THE ELIMINATION OF OUR LOSS MAKING OPERATIONS AND THE RESTRUCTURING
AND CONSOLIDATING OF OUR ACTIVITIES, THE GROUP IS NOW WELL POSITIONED TO
RESPOND RAPIDLY TO CHANGING LOCAL ECONOMIC CONDITIONS. WE WILL CONTINUE TO
CAUTIOUSLY EXPLORE NEW MARKETS FOR GROWTH OPPORTUNITIES FOR OUR CORE
BUSINESSES. GIVEN THE CURRENT ORDER BOOK, AND ASSUMING THAT MARKET CONDITIONS
DO NOT SHOW ANY FURTHER DETERIORATION, THE RESULTS OF THE GROUP FOR THE ENSUING
FINANCIAL YEAR SHOULD EXCEED THOSE OF THE CURRENT YEAR.
ON BEHALF OF THE BOARD
MH LOMAS HC TURNER
26 AUGUST 1999
DIVIDEND DECLARATION BY GROUP FIVE LIMITED, GROUP FIVE HOLDINGS LIMITED AND SM
GOLDSTEIN LIMITED
THE DIRECTORS HAVE DECLARED AN UNCHANGED FINAL DIVIDEND OF 15 CENTS PER GROUP
FIVE LIMITED ORDINARY SHARE AND PER "N" ORDINARY SHARE, 14 CENTS PER GROUP FIVE
HOLDINGS LIMITED ORDINARY SHARE AND 14 CENTS PER SM GOLDSTEIN LIMITED ORDINARY
SHARE. THE DIVIDENDS ARE PAYABLE TO SHAREHOLDERS REGISTERED IN THE BOOKS OF
THE COMPANIES AT THE CLOSE OF BUSINESS ON 23 SEPTEMBER 1999. DIVIDEND CHEQUES
WILL BE POSTED TO SHAREHOLDERS ON OR ABOUT 8 OCTOBER 1999.
NOTE
MEMBERS ARE REMINDED THAT ENTITLEMENTS OF LESS THAN R 5 WILL BE DONATED TO
CHARITY.
PRESS RELEASE
GROUP FIVE POSTS CREDITABLE RESULTS
IN SPITE OF DIFFICULT TRADING CONDITIONS AND RESTRUCTURING COSTS TOTALLING R
23.2 M IN THE MANUFACTURING DIVISION, THE GROUP ACHIEVED SATISFACTORY RESULTS.
A SMALL DECLINE IN ATTRIBUTABLE PROFIT RESULTED IN EPS DECREASING FROM 90.4
CENTS TO 84.2 CENTS.
CEO, MIKE LOMAS, SAID THAT EFFECTIVE MANAGEMENT OF WORKING CAPITAL GENERATED A
45% IMPROVEMENT IN CASH FROM OPERATIONS WHICH CONTRIBUTED TO A FURTHER
STRENGTHENING OF THE BALANCE SHEET. WHILE THE TOUGH BUSINESS ENVIRONMENT SAW
TURNOVER DROP BY 8% TO R 2.6 BN, THE OPERATING PROFIT MARGIN REMAINED ABOVE 3%.
LOMAS SAID THE GROUP'S CONSTRUCTION ACTIVITIES ONCE AGAIN PRODUCED EXCELLENT
RESULTS WITH BOTH THE CIVILS AND ENGINEERING DIVISIONS' RESULTS EXCEEDING THOSE
OF THE PREVIOUS YEAR.
THE ONE DISAPPOINTING ASPECT WAS THE PERFORMANCE OF THE MANUFACTURING DIVISION.
ADVERSE MARKET CONDITIONS RESULTED IN DPI PLASTICS PRODUCING CONSIDERABLY
LOWER TRADING RESULTS AND THE FIBRE CEMENT OPERATIONS CONSISTING OF EVERITE
BUILDING PRODUCTS AND EVERITE AC PIPES RECORDING LOSSES. VAAL SANITARYWARE
HOWEVER MANAGED TO IMPROVE ITS PROFITABILITY OVER THE PREVIOUS YEAR DUE TO THE
BENEFITS ARISING FROM RESTRUCTURING.
ACCORDING TO LOMAS THE OVERALL PERFORMANCE FOR THE CURRENT YEAR HAS BEEN
FAVOURABLY AFFECTED BY THE ELIMINATION OF THE SUBSTANTIAL LOSSES INCURRED IN
THE PREVIOUS YEAR IN RESPECT OF RESIDENTIAL PROPERTIES, HEAD LEASES AND THE
GROUP'S COMMERCIAL I.T. OPERATIONS. ALSO IMPACTING POSITIVELY ON THE RESULTS
WAS A REDUCTION IN THE EFFECTIVE TAX RATE FROM 32% TO 24%.
THIS YEAR MARKED THE END OF A TWO YEAR PROJECT TO ELIMINATE LOSS MAKING
OPERATIONS AND ALIGN THE BUSINESS STRUCTURES WITH THE MARKETS SERVED.
LOMAS BELIEVES THAT THE GROUP IS NOW WELL POSITIONED TO RESPOND RAPIDLY TO
CHANGING LOCAL ECONOMIC CONDITIONS.
"WE WILL CONTINUE TO CAUTIOUSLY EXPLORE NEW MARKETS FOR GROWTH OPPORTUNITIES
FOR OUR CORE BUSINESS. GIVEN THE CURRENT ORDER BOOK AND ASSUMING THAT MARKET
CONDITIONS DO NOT SHOW ANY FURTHER DETERIORATION, THE RESULTS OF THE GROUP FOR
THE ENSUING FINANCIAL YEAR SHOULD EXCEED THOSE OF THE CURRENT YEAR", HE SAID.
END
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