GROUP FIVE LIMITED - Trading statement

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

In terms of the JSE Limited Listings Requirements, companies are required to publish a trading
statement as soon as they are reasonably certain that the financial results for the current reporting
period will be more than 20% different from those of the prior comparative period.

In terms of the F2017 results, as communicated at the group’s interim results announcement in
February 2017, three key matters influenced the first half of the financial year.

    1. The recognition in H1 F2017 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 on SENS on 11 October 2016.

    2. The recognition in H1 F2017 of the commercial close out and final settlement of the previously-
        disclosed long outstanding South African public NMPP contracts which reduced operating profit
        by R244 million.

    3. A continuing worsening of markets, with the Engineering & Construction cluster unable to
        entirely replace work traded, which impacted profitability and a recovery of overheads, and a
        contract loss-making ratio which remained worse than the target.

Furthermore, as noted by the board at the time of release of the interim results release in February
2017, replenishment of the Engineering & Construction order book remained challenging and
operational improvements are being implemented to support margin improvement. As indicated, the
benefits of restructuring and the rationalisation programme are only expected to flow from F2018, with
the cost of retrenchment and restructuring incurred in the current year.

Against these conditions, the group advises shareholders that due to a continued disappointing
performance, principally by the Engineering & Construction (E&C) cluster, it expects to report a loss,
excluding the impact of the above-mentioned matters, mainly as a result of the Engineering &
Construction operations trading considerably below the margin guidance provided by the company in
February 2017.

Group Five therefore advises shareholders that it will report a loss per share and headline loss per
share of at least 590 cents for the year ended 30 June 2017 (30 June 2016: earnings per share of 375
cents and headline earnings per share of 335 cents).

Shareholders should note that the F2017 results should be compared to F2016 results which included
an exceptional result from the Investments & Concessions cluster, boosted by a significant fair value
gain realised from the group’s Eastern European project investment portfolio. This had a R730 million
positive impact on earnings.

The full proceeds from the strategic equity partnership with Aberdeen have been received by year-end,
which represents free cash. This cash has been retained offshore for application to future investments.

The group has not yet completed its review of the financial results for F2017, with a few estimate
assessments requiring finalisation. In addition, the 2017 financial results will require review and
approval by the group’s new board of directors once reconstituted following the group’s extra ordinary
general meeting today, Monday, 24 July 2017. A further trading update will therefore be released on
SENS once the company has clarity on the exact range of the decrease.

REPORTING
The above information has not been reviewed or reported on by the company’s auditors.

24 July 2017
Sponsor
Nedbank Corporate and Investment Banking

Date: 24/07/2017 08:45:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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