To view the PDF file, sign up for a MySharenet subscription.

GRF - Group Five Limited - Unaudited interim group results for the six months

Release Date: 04/03/2010 08:00
Code(s): GRF
Wrap Text

GRF - Group Five Limited - Unaudited interim group results for the six months ended 31 December 2009 GROUP FIVE LIMITED (Registration number: 1969/000032/06) (Incorporated in the Republic of South Africa) Share Code: GRF ISIN Code: ZAE000027405 STRUCTURED INGENUITY Unaudited interim group results for the six months ended 31 December 2009 371 Rivonia Boulevard, Rivonia PO Box 3951, Rivonia 2128, South Africa Tel: +27 11 806 0111, 0860 55 55 56 Fax: +27 11 803 5829, email: info@groupfive.co.za www.groupfive.co.za Incorporated in the Republic of South Africa Reg. no. 1969/000032/06 JSE code: GRF ISIN: ZAE000027405 Revenue (R`000) down 4% Dec 09 - 5 708 793 Dec 08 - 5 968 141 Profit after tax from continuing operations (R`000) up 12% Dec 09 - 284 900 Dec 08 - 253 764 Cash and cash equivalents (R`000) up 464 287 Dec 09 - 3 242 711 Jun 09 - 2 778 424 Fully diluted headline earnings per share (cents) up 8% Dec 09 - 249 Dec 08 - 230 Consolidated condensed income statement % Unaudited Audited change Six months ended Year ended 31 December 30 June
2009 2008 2009 Revenue (4) 5 708 793 5 968 141 12 090 236 Operating profit before 6 399 146 376 660 797 182 fair value adjustments and associates Fair value adjustments 10 391 11 978 15 718 relating to investment in service concessions Operating profit 5 409 537 388 638 812 900 Income/(loss) from 1 017 - (69) associates Finance income 63 966 49 378 137 173 Finance costs (56 387) (80 526) (167 993) Profit before taxation 17 418 133 357 490 782 011 Taxation (133 233) (103 726) (224 567) Profit after taxation 12 284 900 253 764 557 444 from continuing operations Loss for the period (10 571) (13 087) (22 890) from discontinued operations Profit for the period 14 274 329 240 677 534 554 Allocated as follows: Equity shareholders of 7 252 547 235 084 514 733 Group Five Limited Non controlling 21 782 5 593 19 821 interest 14 274 329 240 677 534 554
Determination of headline earnings (R`000) Attributable profit 7 252 547 235 084 514 733 Add after tax effect of - Losses on sale of - - 19 property, plant and equipment and investment property - Losses on disposal of 10 571 13 087 22 890 discontinued operations Headline earnings 6 263 118 248 171 537 642 Consolidated statement of comprehensive income (R`000) Unaudited Audited Six months ended Year ended 31 December 30 June
2009 2008 2009 Net profit for the period 274 329 240 677 534 554 Other comprehensive income for the period net of tax Movement in foreign currency (33 177) 9 653 (78 006) translation reserve Total comprehensive income 241 152 250 330 456 548 for the period Total comprehensive income for the period attributable to Equity shareholders of the 219 370 244 737 436 727 company Non controlling interest 21 782 5 593 19 821 Total comprehensive income 241 152 250 330 456 548 for the period Consolidated condensed statement of cash flow (R`000) Unaudited Audited Six months ended Year ended 31 December 30 June
2009 2008 2009 Cash flow from operating activities 'Cash from operations 565 525 482 240 1 117 273 'Working capital changes 162 012 237 420 682 226 Cash generated from operations 727 537 719 660 1 799 499 'Finance costs - (net) 7 580 (31 148) (30 820) 'Taxation and dividends paid (119 087) (118 537) (222 194) Net cash generated by operating 616 030 569 975 1 546 485 activities Property, plant and equipment (72 910) (89 841) (213 018) and investment property (net) Investments (net) (38 724) (146 468) (191 906) Net cash utilised in investing (111 634) (236 309) (404 924) activities Net cash utilised in financing (40 109) (143 232) (219 051) activities Net cash generated by - 31 700 31 700 discontinued operations Net increase in cash and cash 464 287 222 134 954 210 equivalents Consolidated condensed statement of financial position (R`000) Unaudited Audited as at as at
31 December 30 June 2009 2008 2009 ASSETS Non-current assets Property, plant and equipment 2 460 893 2 381 848 2 444 837 and investment property Goodwill 24 859 24 859 24 859 Investments - service 224 417 164 327 186 482 concessions Investments - property 120 000 - 120 000 developments Other non-current assets 82 477 262 997 63 364 2 912 646 2 834 031 2 839 542 Current assets Other current assets 3 930 980 5 366 244 4 654 112 Bank balances and cash 3 262 105 2 067 573 2 798 046 7 193 085 7 433 817 7 452 158 Non-current assets classified 73 153 90 973 81 170 as held for sale Total assets 10 178 884 10 358 821 10 372 870 EQUITY AND LIABILITIES Capital and reserves Equity attributable to equity 2 541 387 2 211 968 2 373 477 holders of the parent Non controlling interest 51 537 21 315 34 366 2 592 924 2 233 283 2 407 843 Non-current liabilities 'Interest bearing borrowings 877 287 1 187 087 897 867 'Other non-current liabilities 61 746 65 628 62 069 939 033 1 252 715 959 936 Current liabilities 'Other current liabilities 6 627 533 6 851 598 6 985 469 'Bank overdrafts 19 394 21 225 19 622 6 646 927 6 872 823 7 005 091 Total liabilities 7 585 960 8 125 538 7 965 027 Total equity and liabilities 10 178 884 10 358 821 10 372 870 Consolidated condensed segmental analysis - primary (R`000) % Audited change Unaudited Year ended
Six months ended 30 June 31 December 2009 2008 2009 Revenue Investments and (1) 334 349 338 218 626 795 Concessions Infrastructure 14 310 119 271 262 527 938 Concessions Property (64) 24 230 66 956 98 857 Developments Manufacturing 21 454 022 374 078 816 132 Construction (35) 269 038 413 725 671 317 Materials Construction (4) 4 651 384 4 842 120 9 975 992 Building and 16 1 551 383 1 332 484 2 899 773 Housing Civil Engineering 10 2 412 214 2 198 778 4 633 259 Engineering (48) 687 787 1 310 858 2 442 960 Projects Total revenue (4) 5 708 793 5 968 141 12 090 236 H1 2010 % (R`000) Margin % change Operating profit Investments and 12.1 (12) 40 523 45 803 81 887 Concessions Infrastructure 14.8 2 46 048 45 128 79 636 Concessions Property (22.8) (918) (5 525) 675 2 251 Developments Manufacturing 9.6 16 43 520 37 407 85 964 Construction 7.1 (50) 19 061 37 760 55 835 Materials Construction 6.4 16 296 042 255 690 573 496 Building and 6.0 80 92 900 51 714 141 032 Housing Civil Engineering 5.9 39 142 823 102 504 225 733 Engineering 8.8 (41) 60 319 101 472 206 731 Projects Total operating 7.0 6 399 146 376 660 797 182 profit Consolidated condensed statement of changes in equity (R`000) Unaudited Audited Six months ended
31 December Year ended 30 June 2009 2008 2009
Balance at 1 July 2 407 843 2 023 181 2 023 181 Net profit for the period 274 329 240 677 534 554 Other comprehensive income (33 177) 9 653 (78 006) for the period Share options expense 17 091 16 927 41 916 Distribution to minorities (4 611) (795) (1 972) Dividends paid (68 551) (56 360) (111 830) Balance at end of period 2 592 924 2 233 283 2 407 843 Statistics Unaudited Audited Six months ended Year ended 31 December 30 June
2009 2008 2009 Number of ordinary shares 94 765 894 93 995 266 94 614 042 Shares in issue 120 244 494 119 834 071 120 093 047 Less: Shares held by share (25 478 600) (25 838 805) (25 479 005) trusts Weighted average number of 95 236 94 411 94 670 shares (`000s) Fully diluted weighted 105 494 107 954 105 804 average number of shares (`000s) Earnings per share - R 2,65 2,49 5,44 Headline earnings per share 2,76 2,63 5,68 - R Fully diluted earnings per 2,39 2,18 4,86 share - R Fully diluted headline 2,49 2,30 5,08 earnings per share - R Dividend cover (based on 4,2 4,3 4,2 earnings per share) Dividend per share (cents) 63,0 58,0 130,0 Interim 63,0 58,0 58,0 Final - - 72,0 Net asset value per share - 26,8 23,53 25,09 R Net debt to equity ratio - - - Current ratio 0.6 0.8 0.7 Capital expenditure and depreciation (R`000) Audited Unaudited Six months ended Year ended 31 December 30 June 2009 2008 2009
Capital expenditure 111 427 169 935 429 511 for the period Capital expenditure 94 238 84 238 139 561 committed or authorized at the period end Depreciation for 131 133 99 968 258 370 the period Estimates and contingencies The group makes estimates and assumptions concerning the future, particularly with regard to construction contract profit taking, provisions, arbitrations and claims and various fair value accounting policies. The resulting accounting estimates and judgments can, by definition, therefore only approximate the actual results. Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Total financial institution guarantees given to third parties on behalf of subsidiary companies amounted to R5 702 million as at 31 December 2009, compared to R6 268 million as at 30 June 2009. Distribution to shareholders by way of a capital reduction from stated capital ("distribution") The directors have declared the distribution of 63 cents per ordinary share (2008: 58 cents dividend) payable to shareholders. Dates of the distribution In order to comply with the requirements of STRATE, the relevant details are: Event Date Last day to trade (cum-distribution) Friday, 16 April 2010 Shares to commence trading (ex-distribution) Monday, 19 April 2010 Record date (date shareholders recorded in Friday, 23 April 2010 books) Payment date Monday, 26 April 2010 No share certificates may be dematerialised or Monday, 19 April 2010, and rematerialised between Friday, 23 April 2010, both dates inclusive. Terms of payment The distribution of 63 cents per ordinary share will be paid to shareholders from Group Five`s stated capital. Financial effects of the distribution The pro forma financial effects of the distribution on earnings per share ("EPS"), headline earnings per share ("HEPS"), the net asset value ("NAV") and net tangible asset value ("NTAV") per share are set out below. This unaudited pro forma financial information has been prepared for illustrative purposes only. It may therefore not give a fair reflection of Group Five`s financial position and results of operations, nor the effect and impact of the distribution going forward. The information is the responsibility of the directors of Group Five. Before the After the %
distribution(1) distribution(2) change EPS (cents) 265 264 (0.4) HEPS (cents) 276 275 (0.4) NAV (cents) 268 262 (2.3) NTAV (cents) 260 253 (2.7) Number of shares for 95 236 95 236 0 EPS and HEPS purposes (`000) Number of shares for 94 766 94 766 0 NAV and NTAV (`000) Notes: 1. Based on Group Five`s unaudited interim group results for the six months ended 31 December 2009. 2. Based on the assumption that the distribution took place on 1 July 2009 for income statement purposes and on 31 December 2009 for balance sheet purposes. 3. EPS and HEPS have been adjusted to take into account the interest foregone on cash balances used in making the distribution of R59,7 million. 4. After taking into account the reduction in stated capital following the distribution of R59,7 million. Opinion of the directors The directors of Group Five have considered the effect of the distribution and are satisfied that, for a period of 12 months from 1 March 2010, being the date of the declaration of the distribution: the company and its subsidiaries will be able, in the ordinary course of business, to pay its debts; the assets of the company and its subsidiaries will be in excess of the liabilities, having been recognised and measured in accordance with the accounting policies used in the audited results for the year ended 30 June 2009; the share capital and reserves of the company and its subsidiaries will be adequate; and the working capital and working capital resources of the company and its subsidiaries will be adequate for a period of 12 months from 1 March 2010, being the date of the declaration of the distribution. Basis of preparation These consolidated condensed interim financial statements for the six months ended 31 December 2009 have been prepared in accordance with IAS 34, "Interim Financial Reporting" and in the manner required by the Companies Act of South Africa. The consolidated condensed interim financial information should be read in conjunction with the annual financial statements for the year ended 30 June 2009, which have been prepared in accordance with International Financial Reporting Standards (IFRS). The accounting policies applied are consistent with those of the annual financial statements for the year ended 30 June 2009, as described in those financial statements. Forward looking statements Certain statement in this release that are neither reported financial results nor other historical information are forward looking statement including but not limited to predictions of or indications of future earnings. Undue reliance should not be placed on such statements because, by their very nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors that could cause actual results and company plans and objectives to differ materially from those expressed or implied in the forward-looking statements. Commentary OVERVIEW The group is pleased to announce a 6.4% increase in earnings per share (EPS), a 9.6% increase in fully diluted EPS (FDEPS), a 4.9% increase in headline earnings per share (HEPS) and a 8.3% increase in fully diluted HEPS (FDHEPS). Revenue decreased slightly by 4.3% from R6,0 billion to R5,7 billion and operating profit before fair value adjustments increased by 6.0% from R377 million to R399 million. This resulted in the group operating margin improving from 6.3% to 7.0%. After fair value adjustments, operating profit increased by 5.4% to R410 million (2008: R389 million). The group`s net finance income position of R7,6 million is a substantial improvement over prior periods during which net finance costs were incurred. The group balance sheet continues to be sound, with a nil net gearing ratio as at 31 December 2009. The net increase in cash and cash equivalents for the period was more than double that of the prior period, with a R464 million increase (2008: increase R222 million). Similar to the prior comparative period and 2009 financial year, the increase in cash was achieved as a result of a focus on working capital management and increases in cash generated from operations. The effective taxation rate of 32% was a function of reduced taxation on income from jurisdictions with taxation rates lower than the South African corporate tax rate. This was offset by an increased taxation charge due to STC on dividends and taxation from African jurisdictions with taxation rates higher than the South African corporate tax rate. The interim dividend has been increased by 8.6% to 63 cents (2008: 58 cents) congruent with the current dividend cover policy of approximately four times covered. Further to the group`s previous statement regarding the unwind of the iLima Consortium shareholding, it confirms that the process continues and the group has asked the courts to make a declaration confirming such unwind. As previously reported, this unwind will have no material bearing on the group`s results, nor its BEE status due to the BBBEE scorecard improvements made across all its businesses. The group remains a Level 3 BBBEE contributor. During the last few years, the group increased its proactive stance in mitigation of the risk of any instances of lack of compliance with respect to Competition Law. The group has undertaken internal investigations, training and awareness to ensure full compliance and will continue with its proactive and cooperative stance as the investigations into the construction industry progress. BUSINESS COMBINATIONS There were no business combinations in the period under review. Operational review INTRODUCTION The traditional South African private sectors in which the group`s Construction businesses operate, namely mining, industry and real estate, remained weak. The timing of resumption in government infrastructure spending has been and will remain a key factor for the domestic South African construction industry. Although there is a planned R40 billion spend in the PPP and concessions market for large public buildings and roads, as well as power developments, only a few significant awards have been made in the last four consecutive quarters. Whilst the group has focused on, and benefited from, the South African domestic public sector spend for the past two years, there is now a return to a more balanced portfolio of local domestic markets, with resumption in international opportunities. In this regard, there has been an increase in activity in the African mining sector in gold, copper, zinc, uranium and coal. New awards are under negotiation, including the re-instatement of previously cancelled contracts. In the Middle East, the group continued to actively pursue new infrastructure opportunities, including power and heavy industry in an expanding number of countries. New contracts were recently won in Abu Dhabi, Jordan and Qatar. The resolution of the commercial closure of the two previously reported terminated contracts in Dubai is proceeding in an orderly fashion. The Construction Materials and Manufacturing businesses have weathered tough markets well and the Investments and Concessions businesses continued to strategically position Group Five in both Europe and Africa for a new round of concession opportunities, contributing to the long term sustainability of the group. GROUP The group`s operating margin is reported net of the following non- core/operational transactions: profit on sale of assets, pension fund surpluses and deficits and impairment adjustments. The group`s operating margin, both including and excluding such adjustments, is reflected below. Six months Full year Six months ended ended ended 31 December 30 June 31 December
2009 2009 2008 Revenue - (R`000) 5 708 793 12 090 236 5 968 141 Reported Operating Margin% 7.0% 6.6% 6.3% Core Operating Margin%* 7.0% 6.7% 7.1% = core operating margin % is defined as reported operating margin % adjusted for the non-core transactions listed above. = reported operating margin % is defined as operating profit before fair value adjustments as a % of revenue. As both core and reported margins are the same for H1 F2010, these are disclosed but not discussed separately per segment. The 7% group margin is very pleasing and well within the 6-8% guidance given. This was achieved in spite of tough markets, large Middle East contract cancellations, the retreat of mining projects in Africa and continued delays in public sector awards in South Africa. All these setbacks were somewhat mitigated by the good execution and margin contribution of the large 2010 and transport infrastructure contracts. The secured construction order book decreased over three quarters from a peak of R14,3 billion in August 2008 to R11,6 billion as at August 2009 and has, in the last quarter, stabilised at R10,5 billion. The group believes this gives some indication of a bottoming of the domestic market decline and reflects the group`s return to a balance in its focus on local and international markets. INVESTMENTS AND CONCESSIONS (including Infrastructure Six months Full year Six months Concessions and Property ended ended ended Developments) 31 December 30 June 31 December 2009 2009 2008 Revenue 334 349 626 795 338 218 Reported Operating Margin% 12.1% 13.1% 13.5% Core Operating Margin%* 12.1% 13.2% 14.3% Revenue for Investments & Concessions remained largely unchanged period on period and operating profit decreased slightly from R46 million to R41 million. In line with margin range guidance given, an operating margin of 12.1% (2008: 13.5%) was achieved. Infrastructure concessions The benefits of the group`s strategy of securing longer term investments that also deliver annuity revenue are coming to the fore and continued to deliver solid results. Revenue grew 14.3% to R310 million (2008: R271 million) as a result of growth in Intertoll Europe. This growth was primarily driven by the roll out of new projects in Poland and Hungary. Operating margin decreased to 14.8% (2008: 16.6%) with an increase in operating profit to R46 million (2008: R45 million). Going forward, the Eastern European concessions are set to remain buoyant, with further new projects under development. These include toll roads and power opportunities. Property developments As stated in the prior reporting periods, the group has been replacing its current portfolio of mostly residential developments to development opportunities that are strategically located, commercial, industrial and mixed use developments that also benefit Construction, Manufacturing and Construction Materials. These include the Waterfall and Sandton CBD developments. The group previously provided guidance that this strategy would secure long term benefits, although it would result in a short term decline in returns. In the period, this was exacerbated by a weak residential market. As expected, revenue reduced by 63.8% to R24 million (2008: R67 million) and operating profit reflected a small loss of R5,5 million (2008: R1 million profit). MANUFACTURING Six months Full year Six months ended ended ended 31 December 30 June 31 December
2009 2009 2008 Revenue - (R`000) 454 022 816 132 374 078 Reported Operating Margin% 9.6% 10.5% 10.0% Core Operating Margin%* 9.6% 10.6% 10.9% Manufacturing weathered the recession and delivered a good performance in tough market conditions, with a solid performance from especially Everite and Group Five Pipe that offset weaker construction steel markets. Revenue increased by 21.4% from R374 million to R454 million. Operating profit increased by 16.3% from R37 million to R44 million, resulting in an operating margin of 9.6% (2008: 10.0%). The results for the period were achieved through continuous improvement in production techniques, an efficient supply chain, quick stock turns, product range extension and geographic expansion in Everite. In the period under review, further progress was made in developing the group`s Advanced Building Technologies (ABT) product offering into the housing and building market. Group Five Pipe continued to experience an improving business cycle due to the emergence of the capital spend on bulk water contracts. Government`s long term commitment to housing, new post-2010 contract flows in the public infrastructure sector and the recovery of private sector markets should continue to provide a positive outlook for Manufacturing. CONSTRUCTION MATERIALS Six months Full year Six months ended ended ended
31 December 30 June 31 December 2009 2009 2008 Revenue - (R`000) 269 038 671 317 413 725 Reported Operating Margin% 7.1% 8.3% 9.1% Core Operating Margin%* 7.1% 8.4% 10.0% Revenue decreased by 35.0% from R414 million to R269 million, whilst operating profit, in line with the difficult private sector conditions experienced within the sector, decreased by 49.5% to R19 million from R38 million. Although volume improvements have not yet materialised, significant restructuring and management changes have been implemented, which has arrested the decline in operating profit. The business is now more resilient to tough conditions post management intervention, with a continued focus to be placed on the further improvement of asset utilisation and possible further expansion in mining-related activities, which now accounts for 15% of the segment`s revenue. Management therefore believes that the short term performance will improve through further efficiencies, to be followed by the return of volumes in the longer term. CONSTRUCTION Construction continued to be the largest business in the group, contributing 74% to operating profit. It comprises the business segments of Building and Housing, Civil Engineering and Engineering Projects. Six months Full year Six months ended ended ended
31 December 30 June 31 December 2009 2009 2008 Revenue - (R`000) 4 651 383 9 975 992 4 842 120 Reported Operating Margin% 6.4% 5.7% 5.3% Core Operating Margin%* 6.4% 5.8% 6.0% As a result of good contract execution, the period on period margins in all segments increased, with the overall Construction operating margin improving from 5.3% to 6.4%. This is extremely satisfactory in light of the group`s stated objective of maintaining a margin in excess of 5% in Construction. Construction revenue decreased by 3.9% from R4,8 billion to R4,7 billion and operating profit increased by 15.8% from R256 million to R296 million. Over-border work contributed 17% (2008: 45%) to Construction revenue as a result of the cancellation of Middle East contracts and the retreat of the African mining sector. Building and housing Six months Full year Six months
ended ended ended 31 December 30 June 31 December 2009 2009 2008 Revenue - (R`000) 1 551 383 2 899 773 1 332 484 Reported Operating Margin% 6.0% 4.9% 3.9% Core Operating Margin%* 6.0% 5.0% 4.8% In spite of the private building sector remaining extremely weak, Building and Housing managed to mitigate this impact through the contribution from large public sector contracts, as well as focusing on new over-border opportunities, improved execution and supply chain savings. Revenue increased by 16.4% from R1,3 billion (96% local) to R1,6 billion (98% local) and operating profit increased by 80% to R93 million (2008: R52 million), resulting in a strong improvement in the operating margin to 6.0% (2008: 3.9%). The South African public sector investment programme, related to infrastructure in housing contracts, transport and concessions for prisons, government buildings and hospitals, as well as the power station programme, offer future work in Building and Housing to partially mitigate the private sector downturn. Although the domestic private sector cycle is expected to recover within these timeframes, the business has also pro-actively moved back into growing over-border markets. During the period, new contracts were secured in the SADC region. Civil engineering Six months Full year Six months
ended ended ended 31 December 30 June 31 December 2009 2009 2008 Revenue - (R`000) 2 412 214 4 633 259 2 198 778 Reported Operating Margin% 5.9% 4.9% 4.7% Core Operating Margin%* 5.9% 4.9% 5.2% Civil Engineering revenue increased by 9.7% from R2,2 billion (56% local) to R2,4 billion (82% local). Operating profit increased by almost 40% from R103 million to R143 million, resulting in an overall operating margin of 5.9%. These results were achieved despite the reduced order book in Dubai. The activity in other markets such as Abu Dhabi and Jordan remained strong, as well as pockets of the South African public works market Visibility for 2011 and 2012 remains strong, with a good international spread. Engineering projects Six months Full year Six months ended ended ended
31 December 30 June 31 December 2009 2009 2008 Revenue - (R`000) 687 787 2 442 960 1 310 858 Reported Operating Margin% 8.8% 8.5% 7.7% Core Operating Margin%* 8.8% 8.6% 8.7% As expected, Engineering Projects` revenue decreased from R1,3 billion (12% local) to R688 million (57% local) and operating profit decreased from R101 million to R60 million. Operating margin remained strong at 8.8% (2008: 7.7%). The reduction in revenue was due to the retreat of the mining resources sector and delays in awards in the power sector. However, the maintenance of the margin illustrates good execution and a sustainable business going forward that will focus on growing multi-disciplinary specialist contract delivery capability into selected high-value, high-growth markets. These include resources, energy, heavy industrial and innovative power solutions in the expanding power, energy, industrial and mining sectors on the African continent and in the Middle East. The outlook is positive as the resources sector recovers, which has resulted in several new contract awards in the African mining sector in recent weeks, contributing to a recovery in the order book and visibility into 2011 and 2012. Prospects The group met the challenges of the recession well and came through it leaner and more resilient. The group now has an entrenched ability to deliver on larger infrastructure work that supports all the group`s businesses. Group Five therefore continues to be strategically well positioned to benefit from the recovery in active markets, both domestically and internationally. In spite of 12 months of very low levels of domestic contract awards, the total secured Construction order book stands at R10,5 billion (August 2009: R11,6 billion). The group has pro-actively repositioned itself for a more balanced distribution of work between public and private sectors and domestic and international. Opportunities going forward are focused on a more aggressive over-border presence in favour of public infrastructure contracts, private and renewable power and concessions, as well as a recovery in traditional mining, real estate and civil works markets. The group`s Project Opportunity Pipeline (POP) is the indicator of medium to long term performance. The growth in the POP from R73 billion to R116 billion in the quarter is therefore encouraging and supports the group`s longer term outlook of a steady recovery coming through from 2011. The group is well positioned to weather tough short term conditions and to take advantage of any upturn. Despite the challenging business environment, we expect earnings for the full year to be at least comparable with those achieved in the prior year with prospects of a recovery from H2 F2011 depending on the timing of targeted local and international contract awards. The above information has not been reviewed or reported on by Group Five`s auditors. BOARD CHANGES During the period under review, the following change took effect to the board of directors: Dr MSV Gantsho resigned as non-executive director on 14 January 2010. ACKNOWLEDGMENTS The group wishes to recognise the hard work and commitment of its employees, without whom these results would not have been achieved. On behalf of the board MP Buthelezi MR Upton Chairperson Chief Executive Officer 2 March 2010 Board of Directors: MP Buthelezi* (Chairperson), MR Upton (CEO), CMF Teixeira (CFO), L Chalker*+, KK Mpinga*, SG Morris*, JL Job*, LE Bakoro (*), Z Mtshotshisa (*) *(Non-executive director) +(British) (DRC) Transfer Secretaries: Computershare Investor Services (Pty) Ltd, 70 Marshall Street, Johannesburg 2001 Please visit our website: www.groupfive.co.za Date: 04/03/2010 08:00:03 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.

Share This Story