Group Five has reported a return to profit in its annual results to June 2013. (Gallo)
Group Five chief executive Mike Upton in a statement attributed its success to its continued conservative approach adopted "both in terms of the quality of the order book secured and our philosophy towards cash preservation to fund activity that will support future growth".
The company, which saw improved net income of R272.7-million in the last 12 months, said the company had taken a decision not to settle outstanding fines on four projects identified by the Competition Commission, saying it did not believe it had been involved in any contraventions in these cases. Group Five received leniency on 25 cases investigated by the Commission. Four cases are currently the subject of a dispute with the Commission.
This opens Group Five to litigation by the Competition Commission and the matter will be taken before the competition tribunal, where the matter will be heard and a decision taken about whether to fine the company.
Sales for the group rose 27% to R11.1-billion and its cash position improved to R2.9-billion.
Losses
The loss-making Middle East operations reduced its losses to R50.8-million, against R200-million a year go, but a decision was still made to close the operation.
The company's order book was up 26% since the previous June.
According to chief financial officer Christina Teixiera, 32% of the sales in the 2013 financial year was from outside South Africa.
Bloomberg said Group Five shares have advanced 42% this year compared with a 4.7% drop in the seven-member FTSE/JSE Africa Construction and Building Materials Index.
Looking ahead, Upton said: "Our order book recovery continues to be sustained ahead of an anticipated annual increase in activity levels in the second quarter of 2014. The group's total secured contracting order book stands at R14.2-billion."
He expects that the group's trading performance will show modest increases in margin and earnings.