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Group Five to revisit over-border work

Posted On Friday, 17 February 2006 02:00 Published by eProp Commercial Property News
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Group Five is to revisit its level of over-border work as a result of the SA Government's infrastructure budget, says Mike Lomas, the company's CEO

Mike LomasListed construction and engineering company Group Five is to revisit its level of over-border work as a result of the SA Government's infrastructure budget, Mike Lomas, the company's CEO said at a presentation of the group's results on Thursday.

In Nigeria, Group Five is designing and constructing a gas-fired power plant. This is its largest ever contract in West Africa and its first project in the independent African power market.

Group Five's engineering operation, Group Five Engineering Projects, has been awarded a 585 million rand project for the design, supply and construction of the 180MW gas-fired power plant supplied by General Electric for the Ibom Power Company in Nigeria. The plant is situated in the southern Akwa Ibom region on the Niger river delta.

"Nigeria is fantastic, but this is providing you're working with banks, that you have letters of credit and that you're working with General Electric," Lomas said.

In Ghana, Group Five is building the Bogoso sulphide expansion project, while in Tanzania the company has constructed the country's reserve bank building in Dar es Salaam, and is also involved in the construction of a branch building for the Bank of Tanzania in Zanzibar. In the Democratic Republic of Congo, the company has constructed a copper cobalt plant.  In Angola, it is constructing a cement plant in a joint venture with a German company.

There have however, been disappointments. "In Mozambique there has been a problem with payment - and there are problems there like malaria and high tax rates. It's not friendly for us," Lomas said.

In Malawi too, the company has experienced problems with a European Union project that ran out of budget.  The company has entered into legal proceedings.

In India, where the group had a maintenance contract for three roads, there has been a dispute over payment and the company had gone to court.

"We'll focus on countries with good growth and the right partners - and we'll just leave out other countries," Lomas continued.

In Dubai, the company's projects are centred around airports. Group Five Middle East, in consortium with Al Naboodah, was awarded two contracts in Dubai with a combined value of 1.7 billion rand. The value to Group Five is 572 million rand.

At Dubai International Airport the company is completing a central utilities complex and has almost completed the first half of the mega cargo terminal. Two new contracts have been awarded for a duty free warehouse at the airport and an airfield and infrastructure at the new Jebel Ali Airport located 40km from Dubai International Airport.

Group Five reported a 35.8% increase in headline earnings per share for the six months ended December 2005 to 69.4 cents from 51.1 cents a year ago. The dividend per share increased by 17.6% to 20 cents per share from 17 cents before.

Revenue increased by 34.8% to 3.1 billion rand, while the operating profit increased by 21.2% to 92.6 million rand.

In line with Group Five's strategy of increasing its over-border contribution, over-border revenue was up by 64.4% to 1.1 billion rand.

"Our construction order book is at a record 5.3 billion rand to 30 June 2006 and at 4.4 billion rand to December 2006. In line with our strategy of increasing over-border work to improve overall margins, we are pleased that the over-border order book now contributes 45% of the total."

"This, together with an expected continued improvement in the local Civils market and improvements in the second half of this financial year in manufacturing and property development services, should lead to continued good earnings growth for the full year," Lomas said.

 

Last modified on Thursday, 17 October 2013 20:55

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