Trading statement Group Five Limited (Incorporated in the Republic of South Africa) (Registration number 1969/000032/06) Share code: GRF ISIN: ZAE 000027405 ("Group Five" or "the Company" or "the group") TRADING STATEMENT On 14 December 2016, Group Five advised shareholders that it would report a loss per share and headline loss per share of at least 170 cents per share for the six months to December 2016 due to: 1. The recognition of the group’s financial socio-economic contribution of R255 million, in terms of the agreement reached with the government of South Africa to implement a programme of initiatives that will significantly accelerate transformation of the South African construction sector, as announced in the SENS announcement of 11 October 2016. Although payment will occur at R21,25m per annum annually over a 12-year period, the total liability must be recorded in the current reporting period as it is the period in which the liability has been incurred. 2. The commercial close out and final settlement of certain long outstanding contracts, as described below. The group also outlined that due to a difficult period for the Engineering & Construction (E&C) cluster, it expected profits from the underlying E&C operations (excluding the impact of the above- mentioned transactions) to be considerably below the margin guidance provided for this cluster in August 2016. The group now has more certainty on the actual range of the loss, and therefore provides this further trading statement. Group Five shareholders are advised that, for the six months ended 31 December 2016, the group expects: - Fully diluted headline earnings per share (“FDHEPS”) and headline earnings per share (“HEPS”) to be a loss of between 300 cents per share and 320 cents per share; and - Fully diluted earnings per share (“FDEPS”) and earnings per share (“EPS”) to be to be a loss of between 295 cents per share and 310 cents per share The six months ended 31 December 2015 reflected earnings per share (EPS) and fully diluted earnings per share (FDEPS) of 168 cents and headline earnings per share (HEPS) and fully diluted headline earnings per share of (FDHEPS) 131 cents respectively. RESULTS IN CONTEXT Engineering & Construction The group reported in December 2016 that the cluster’s performance for the period under review was particularly stressed, mostly as a result of: - continued weak trading conditions, impacting the Civil Engineering, Projects and Energy segments, with a subdued order intake for the cluster during the period; - contract losses, affecting mainly the Projects segment and materially impacting the segment’s performance due to contract operational difficulties; - subdued tendering activity in the mining and oil and gas sectors, which has placed Projects under continued pressure; - cyclical revenue and profit in the Power sector. Although bidding activity in the Power sector remains buoyant, the length of time taken to achieve contract awards resulted in no new awards materialising in the first six months of the financial year, which impacted profitability for this segment; The Kpone Independent Power Project continues to trade in line with expectation and programme. In addition, the group’s focus in the current period was on the commercial close out and final settlement of previously-disclosed long outstanding South African contracts to remove non- performing assets, and improve the group’s balance sheet and its return on capital going forward. Subsequent to the trading statement issued in December 2016, the group has concluded its assessment of trading conditions in all active construction contracts, specifically within the Civil Engineering and Projects segments, as well as accounting for the impact of the settlement agreement reached on the long-outstanding South African contracts mentioned in the December 2016 SENS update. This more conservative assessment resulted in an increase in the expected loss for the six months ended 31 December 2016 reported in this trading statement. The settlement reached on these contracts resulted in additional liquidity for the group and an improved balance sheet at the end of the reporting period and should continue to enhance both liquidity and the balance sheet going forward. Whilst overall short-term market conditions for construction are remaining weaker for longer than expected, the construction industry in the group’s targeted geographies and sectors continues to show solid medium and long term prospects. Concurrently the group is taking action to address areas of operational weakness and overhead efficiency through the extended market downturn. Manufacturing and Investments & Concessions The group’s Manufacturing cluster is delivering an improved performance in ongoing tight markets, and the Investments & Concessions cluster continues to perform well driven by a solid operating performance from Europe. REPORTING The above information has not been reviewed or reported on by the company’s auditors. The group will release its interim results announcement on 22 February 2017 when the group will update the market on its business in a presentation in Johannesburg on the same day. The presentation will be available for all stakeholders on the group's website, www.groupfive.co.za. 09 February 2017 Sponsor Nedbank Corporate and Investment Banking Date: 09/02/2017 01:35:00 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.