Aug 11, 2008:
South African construction firm Group Five (GRF) increased its one-year order book by 76% to R8,5bn as at end June 2008 compared with same period last year, it said on Monday.
Given the slowdown in the residential property market and Eskom's restrictions on private sector building, GRF said work was weighted in favour of public infrastructure.
The one-year order book "reflects the group's strategic positioning in the public infrastructure cycle with a mix of 65:35 in favour of public works", the firm said.
"Power problems in South Africa's national power utility Eskom and interest rates have had a negative effect on both the private sector building and housing markets. We have successfully hedged our exposure to this through our ability to transfer skills to the public sector infrastructure market and redirected housing market strategy, with forward order book weighted 80% in favour of public works," the group said.
The largest contributor to the order book is the firm's civil engineering unit with R4,3bn - up 45% on the same period last year, reflecting increased activity in the sector locally, in Africa and Dubai with many of the larger projects in start-up phase.
The local and Dubai forward workload in weighted 80% in favour large public sector infrastructure works, balanced with an exposure to the mining market in Africa.
Other contributors to the order book were building and housing unit, which secured a one-year order book of R2,2bn – up slightly from R1,9bn as higher interest rates restrict growth in the residential housing market.
Engineering projects, the group's mechanical and electrical engineering cluster that operates in the mining, power and oil and gas markets, secured a one-year order book of R1,9bn compared with R735m last year as activity in the mining and power sectors in Africa remained buoyant.
Earlier the group reported fully diluted headline earnings per share of 398 cents for the year ended June from 233 cents a year ago.
The group's revenue was 16% higher at R8,899bn, while operating profit grew 80% to R747,3m. Operating profit before fair value adjustments increased by 62% to R636m.
Profit for the year was 77% higher at R429,3m. A final dividend of 60 cents per share was declared.
At 9:15, shares in the company were unchanged at R43,10. – Tiisetso Motsoeneng, I-Net Bridge