BUILDING FOR THE WORKERS
Group Five’s mine housing order book doubles to a record
GROUP FIVE doubled the mining housing component of its R6.63 billion building and housing secured order book in the six months to December last year, which comprised the largest portion of its total R14bn secured order book.
The listed construction and engineering group has also reengaged with the Competition Commission over the finalisation of four cases for which the group was not granted conditional leniency.
Mike Upton, Group Five’s chief executive, believed the increase in the group’s mining houses order book was related to the labour unrest in the mining industry and a recognition in the mining industry that companies needed to do something better in terms of the social environment.
“We see more interest from the mining houses to do more about housing. I think it’s a new theme that is coming through,” Upton said yesterday. “We have been doing a lot of housing for the mining industry for many years but the fact that our housing business has got a record order book, and much of that is in the mining space, tells you something.”
Upton said the departure of Shan Ramburuth as commissioner of the commission in October last year had delayed the settlement of the group’s outstanding matters.
Group Five disclosed 25 rigged projects during the commission’s fast-track settlement process and was granted conditional leniency for all of them, but was implicated in four alleged infringements it had not disclosed. The group did not agree with the penalties proposed by the commission and decided against settling, preferring to continue to engage with the commission.
Christina Teixeira, Group Five’s financial director, said consultations with acting competition commissioner Thembinkosi Bonakele had resumed in the second quarter of the group’s financial year, with some “positive progress”.
Teixeira said the group had made an assessment of the carrying value of its provision for any penalty imposed but its assessment indicated it should leave the provision unchanged.
The risk of civil claims did exist and the group was monitoring this but to date had not received any claim, she said.
Group Five reported yesterday that its performance for the six months to December had improved, with stronger interim earnings. The loss from discontinued operations, including from construction materials and the impairment from construction materials, dropped to R3 million from R38m in the previous corresponding period.
Headline earnings a share increased by 40.7 percent to R2.04. Revenue from continuing operations rose by 55.7 percent to R7.7bn and operating profit improved by 27.5 percent to R328m.
An interim dividend of 45c a share was declared, almost 41 percent higher than in the previous corresponding period.
Upton said the group’s total secured contracting order book, which represented the construction and engineering and construction order book, stood at R14bn but the group also had R4.8bn in secured operations and maintenance contracts, which increased the overall group order book at the end of December to R18.8bn.
The outlook for the business in the short term was fair to good, he said.
Group Five’s share price gained 4.82 percent to close at R45.65 on the JSE yesterday. The construction and materials index rose 0.47 percent.