By: Irma Venter
Group Five on Tuesday warned of a significant change in the fortunes of the construction company, JSE-listed companies.
The group told shareholders for the year ended 30 June, it should only be diluted headline earnings of between 45% and 55% lower – to achieve a 253c from 309c a share – compared to the 561C for the first time recorded in fiscal year 2010.
Net income from recurring operations should be lower between 45% and 55%.
The diluted earnings a share were expected to lower between 195% and 205% – to reach a loss of 243c a share to a loss of 269c a share – compared to the 256C a share in fiscal year 2010.
The result would be less of a share between 190% and 200% made in the 280c a share in its last fiscal year.
Group Five, said in a statement that the slowdown was in the building and construction industry in the last two years largely responsible for the sharp decline in income.
“This had a negative impact on the performance of the year that the group had benefited from the year 2010 the majority of large public contracts awarded before the World Cup.”
The company reported a loss of value of their long-term assets that are the building materials were kept in the cluster was added to reduce the severity of the deterioration of materials and market forecasts.
This impairment remained significant difference between the profit on the one hand, and headline earnings per share.
Moreover, in the second half of the year the group had set a few times off costs, the impact adversely on the result display first.
These costs include restructuring and streamlining of the expected costs in building materials cluster as well as the cost of ownership in the Middle East after the collapse of the market.
But with the exception of the Middle East, said his group five largest segment, the construction was a good performance, based on “good performance of the contract” and the benefits to a number of longer term contracts and some to Africa before.
This, however, noted the company that the construction market in South Africa and has more engineering jobs, delays and limited workflow in an industry already described as bearing “seen over-capacity”.
“Work tendering takes place is strongly influenced by the entrepreneurs young and old with very aggressive prices to meet. The emphasis on a larger geographic footprint for more business units of the group and achieve rapid gains in the re-emergence of the mining and energy markets in Africa remains the strategy, the dependence decrease of the weak domestic economy. “
In the short term, the conditions were worse than expected, said Group Five.
This weakness was then also expected to extend more, with an
slow recovery of the broader market in the second half of fiscal year 2012 failed to materialize.
Group Five audited results for the year ended 30 June was expected to be released 15th Be August.
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