Group Five eyes SA public works programme

Posted On Wednesday, 11 August 2010 02:00 Published by Commercial Property News
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Group Five says that it will target SA state's public works programme, specifically in the areas of power generation, transport, water and housing.

Group FiveConstruction entity Group Five said on Tuesday that it would target South African government's public works programme, specifically in the areas of power generation, transport, water and housing, as potential areas for further growth.

The group said it would also adopt a geographic expansionary stance as the African outlook continues to improve, while the Middle East also shows promise.

Speaking at the release of the group's results, in Johannesburg, Group Five CEO Mike Upton, said: "We will continue to grow our expertise and capacity in areas where we have developed a multi-disciplinary delivery capability, namely power, transport and water, mining and large infrastructure works, with a geographic expansionary stance.

"Although growth in the year ahead could be slow, our current order book and pipeline of opportunities support a generally positive outlook."

Upton noted the group's construction one-year order book as at 30 June was at R7.1 billion, although down from R8.6 billion previously.

The groups total secured construction order book stands at R9.3 billion, from R11.6 billion.

In terms of growth areas, the South African government's public works programme, specifically in the areas of power generation, transport, water and housing, has the potential to create opportunities within the South African construction sector.

"The African outlook for private sector fixed investment and primary infrastructure has started to improve, but spending is likely to only come through slowly during the 2011 calendar year, with more certainty emerging from 2012.

"In the Middle East, the group has moved into new territories outside of Dubai.

"These markets provide technically attractive opportunities aligned to the group's capabilities in infrastructure contracts related to industrial works, power, transport and water, Upton said.

Group Five reported diluted headline earnings of 561 cents for the year ended June 2010, from 508 cents previously.

The group's earnings per share were down 48% to 280 cents from 544 cents earlier.

Revenue declined to R11.337 billion versus R12.090 billion mainly due to a reduction in domestic construction materials volumes and in African resources markets, the group said.

"During the year, the markets in which we operate experienced increased volatility and uncertainty, mainly as a result of the global financial stresses, as well as due to a hiatus in South African public sector spending.

Against these factors, we believe we posted a robust result, with delivery against our key financial goals of margin, cash generation and gearing.

We are particularly pleased with the strong margin performance of 7.7% compared to 6.6% last year," Upton said.

A final dividend of 74 cents per share was declared from 72 cents in 2009, bringing the total dividend for the year to 137 cents per share from 130 cents, an increase for the year of 5%.

Source: I-Net Bridge

Publisher: I-Net Bridge
Source: I-Net Bridge

Last modified on Monday, 08 July 2013 20:22

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