/ 11 August 2009

Group Five profits up on Soccer World Cup

Construction giant Group Five announced a year of strong growth on Tuesday as it released its annual results.

”This pleasing performance was mainly due to the resilience of the group’s diversified strategy and its strong positioning in key growth markets such as selected resources, public works programmes and infrastructure associated with the 2010 Soccer World Cup,” the company said in a statement.

The results were achieved in spite of a R4-billion cancellation in the Dubai order book, the decline in the construction materials market and the slowdown in mining and private real estate.

Group Five said its fully diluted headline earnings per share increased by 28% from R3,98 to R5,08.

Group revenue increased by 36% from R8,9-billion to R12,1-billion, ”showing a pleasing acceleration in the rate of trading”, the company said.

Operating profit before fair value adjustments increased by 25% from R636-million to R797-million.

The final dividend of 72 cents per share brought the total dividend for the year to 130 cents per share, an increase for the year of 24%, Group Five said.

Group Five said its project pipeline value was — as at June 30 2009 –R72-billion, an increase from R56-billion in February 2009.

It added that it expected to achieve further earnings growth in 2010.

”Group Five remains well placed to benefit from long-term drivers in the form of stimulus packages and public-private partnerships as well as its exposure to defensive South African public sector infrastructure investment when that takes place,” it said.

The construction company said that it would also benefit from its competitive advantage in the African power and mining markets and its less cyclical, annuity-based infrastructure concession income and its competitive advantage in tendering for concessions.

The company said its variety of income streams would provide some margin protection. – Sapa