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Group Five Limited - Audited results for the year ended 30 JUNE 2003
Group Five Limited
Reg. No. 1969/000032/06
Share Code: GRF
ISIN: ZAE 000027405
Audited results for the year ended
Salient Features
%
Increase 2003 2002
Revenue - R000"s + 2 4 100 361 4 020 756
Earnings per share - (cents) + 26 140,0 111,4
Headline earnings per share - (cents)+ 24 111,3 90,0
Dividends per share - (cents) + 19 37,0 31,0
GROUP INCOME STATEMENT
(R"000) AUDITED
Year ended 30 June
2003 2002
Revenue 4 100 361 4 020 756
Operating profit 160 127 124 573
Finance costs (28 530) (26 397)
Profit before taxation 131 597 98 176
Taxation (30 463) (19 821)
Profit after taxation 101 134 78 355
Minority interest (4 366) (1 346)
Attributable profit 96 768 77 009
Determination of headline earnings:
Attributable profit 96 768 77 009
Deduct after tax effect of
- Fair value increase in investment property (8 925) (8 917)
- Profit on disposal of fixed assets (10 922) (5 876)
Headline earnings 76 921 62 216
Operating profit is stated after charging:
Depreciation and amortisation 88 578 81 072
Foreign exchange (loss)/gain - net (2 391) 64 201
SUMMARISED CASH FLOW STATEMENT
(R"000)
Cash flow from operating activities
Cash from operations 216 803 179 738
Working capital changes (87 823) (47 462)
Cash generated from operations 128 980 132 276
Finance costs (28 530) (26 397)
Taxation and dividends paid (53 131) (61 953)
Net cash from operating activities 47 319 43 926
Fixed assets (net)
(excluding non-cash items) (121 398) (123 202)
Investments (net) 3 047 (9 540)
(118 351) (132 742)
Financing activities 10 029 19 908
Net decrease in cash equivalents (61 003) (68 908)
SEGMENTAL ANALYSIS (R million)
Revenue
Construction 3 204 3 180
Manufacturing 631 612
Operations and maintenance 234 197
Infrastructural Development Services 31 32
4 100 4 021
Operating profit
Construction 91 137
Manufacturing 34 (52)
Operations and maintenance 16 25
Infrastructural Development Services 19 15
160 125
STATEMENT OF CHANGES IN EQUITY
(R"000)
Balance at 1 July 381 813 322 775
Attributable profit for the year 96 768 77 009
Dividends paid (23 501) (17 971)
Balance at 30 June 455 080 381 813
ABRIDGED GROUP BALANCE SHEET
(R"000) AUDITED
Year ended 30 June
2003 2002
ASSETS
Non-current assets
Fixed assets 509 425 449 477
Investments - associates 14 659 16 652
- other 80 048 78 793
604 132 544 922
Current assets
Bank balances and cash 263 618 299 873
Other current assets 1 225 403 1 428 161
1 489 021 1 728 034
Total assets 2 093 153 2 272 956
EQUITY AND LIABILITIES
Capital and reserves
Ordinary shareholders" interest 455 080 381 813
Minority interest 9 899 5 949
464 979 387 762
Non-current liabilities
Interest bearing borrowings 60 832 50 803
Provision for post-employment obligations 46 199 55 296
107 031 106 099
Current liabilities
Accounts payable and other
current liabilities 1 284 968 1 567 668
Bank overdrafts and short-term borrowings 236 175 211 427
1 521 143 1 779 095
Total equity and liabilities 2 093 153 2 272 956
CAPITAL EXPENDITURE
- Capital and investment
expenditure for the year 162 824 172 046
- Capital expenditure committed
or authorised for the next year 53 420 77 303
STATISTICS
Number of ordinary shares 69 119 591 69 119 591
Shares in issue 73 573 023 73 573 023
Less: Treasury shares 4 453 432 4 453 432
Earnings per share/fully diluted
earnings per share (cents) 140,0 111,4
Headline earnings per share (cents) 111,3 90,0
Dividend cover 3,8 3,6
Dividends per share (cents) 37,0 31,0
Interim 14,0 11,0
Final 23,0 20,0
Net asset value per share (cents) 658,4 552,4
Current ratio 1,0 1,0
CONTINGENCIES
There are no legal or arbitration proceedings including any that are pending or
that the Group is aware of or any obligations relating thereto, that have had or
that may have, in the opinion of the directors, a material effect on the Group"s
financial position and accordingly no contingencies or provisions have been
raised therefor.
Total guarantees given to third parties on behalf of subsidiary companies
amounted to R1 115 million as at 30 June 2003 as compared to R1 267 million at
30 June 2002. The directors do not believe any exposure to loss is likely.
ACCOUNTING POLICIES AND AUDITORS
These results for the year ended 30 June 2003 are prepared in accordance with
South African Statements of Generally Accepted Accounting Practice (SA GAAP).
The accounting policies used are consistent with the prior year.
The auditors of Group Five Limited are PricewaterhouseCoopers Inc., Chartered
Accountants (SA), Registered Accountants and Auditors. Their unqualified audit
opinion is available from the company"s registered office.
From a dividend per share point of view disclosure has been provided based on
the period to which the dividends relate. The calculation of all headline
earnings presented is based on the interpretation of Statement of Investment
Practice No 1 issued by the South African Institute of Chartered Accountants in
December 2002.
COMMENTS
FINANCIAL OVERVIEW
Revenue increased by 2% to R4,1 billion (2002: R4,0 billion), earnings per share
by 26% to 140,0 cents (2002: 111,4 cents) and headline earnings per share by 24%
to 111,3 cents (2002: 90,0 cents).
Due to the strengthening of the Rand, revenue generated outside South Africa
during the past year has decreased to 33% of the Group"s turnover compared to
37% in the previous year.
Operating profit increased by 29% to R160,1 million (2002: R124,6 million).
Included in operating profit are foreign exchange losses of R2,4 million in the
current year compared to exchange gains of R64,2 million in the prior year as a
result of the strengthening of the Rand against all major currencies.
Net finance costs increased from R26,4 million to R28,5 million due to higher
average interest rates and increased levels of working capital.
The effective tax rate was 23,1% (2002: 20,2%) due primarily to the use of tax
losses for which no deferred tax asset was previously raised.
OPERATIONAL REVIEW
Construction
Construction revenue remained constant at R3,2 billion compared with the
exceptional improvement of 40% in the previous year.
If the distortion caused by the violent fluctuations in exchange rates is set
aside, the underlying profit in construction showed an 18% improvement.
Building revenue remained constant representing 45% of the Group"s construction
revenue. Underlying operating profit before exchange gains/losses reflected a
29% increase over the previous year.
Road"s operating losses increased mainly due to a reduction in exchange gains
compared to the previous year and, to a lesser extent, the run out on
problematic contracts.
The restructuring of this operation is complete, the business unit has secured
the major portion of its order book for the year ahead and the outlook is
positive.
Whilst Civils performed well, the results were impacted by general deferments of
major projects by the resource sector in the latter half of the financial year
following the strengthening of the Rand.
Engineering performed strongly with a 25% increase in revenue. Operating profit,
before taking into account foreign exchange translations, was in line with the
previous year and met expectations.
The order book for next year is healthy and with the completion of the
restructuring of the Roads operations, all activities are expected to be
profitable in the coming year.
Manufacturing
Manufacturing revenue increased by 3,1% to R631 million (2002: R612 million) and
an operating profit of R34 million was achieved compared to an operating loss of
R52 million in the previous year resulting in an overall improvement of R86
million.
At Everite Building Products the successful turnaround strategy implemented
resulted in the business unit eliminating the significant operating loss
incurred in the previous year.
Vaal produced excellent results with operating profit increasing significantly
due to the introduction of upgraded technology and cost savings in the factory.
DPI Plastics increased revenue and achieved a record operating profit through
stable market conditions and improved factory efficiencies.
Operations and maintenance
Despite an increase of R29 million in Intertoll"s revenue, operating profits
declined mainly due to the lower contribution of offshore profits as the Rand
strengthened.
WSSA increased both revenue and operating profit above expectations.
Infrastructural Development Services
Infrastructural Development Services exceeded its profitability targets and has
strong growth prospects.
PROSPECTS
The recent announcement by Government of the plan to increase economic growth
above the average 3% of the past decade by increasing infrastructural spend and
the planned capital expenditure by the resources and industrial sectors should
provide good opportunities for growth in the coming year.
With a secured order book of R3,5 billion, the Roads operations having been
restructured and the Manufacturing operations now on a sustainable profit path,
a further meaningful improvement in earnings for the coming financial year
should be achieved.
On behalf of the board
GM Thomas MH Lomas
Chairman Chief Executive Officer
20 August 2003
Dividend Declaration: The directors have declared a final dividend of 23 cents
per ordinary share (2002: 20 cents) payable to shareholders. In order to comply
with the requirements of STRATE the relevant details are:
Event Date
Last day to trade
(Cum-dividend) 17 October 2003
Shares to commence trading
ex-dividend 20 October 2003
Record date
(date shareholders recorded in books) 24 October 2003
Payment date 27 October 2003
No share certificates may be dematerialised or rematerialised between
20 October 2003 and 24 October 2003, both dates inclusive.
30 June 2003
Registered Office: 371 Rivonia Boulevard, Rivonia, 2128
Tel: (011) 806 0111 Fax: (011) 803 1324
E-mail: info@g5.co.za Website: www.g5.co.za
Date: 21/08/2003 08:01:11 AM Supplied by www.sharenet.co.za
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