| Mon 13 Feb 2012, 8:00 | | GRF - Group Five Limited - Unaudited interim group results for the six months |
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GRF
GRF
GRF - Group Five Limited - Unaudited interim group results for the six months
ended 31 December 2011
GROUP FIVE LIMITED
(Registration number: 1969/000032/06)
(Incorporated in the Republic of South Africa)
Share Code: GRF ISIN Code: ZAE000027405
GROUP FIVE
Structured ingenuity
Unaudited interim group results for the six months ended 31 December 2011
371 Rivonia Boulevard, Rivonia / PO Box 3951, Rivonia 2128,
South Africa
Tel: +27 11 806 0111, 0860 55 55 56 / Fax: +27 11 803 5829
Email: info@groupfive.co.za / www.groupfive.co.za
Incorporated in the Republic of South Africa /
Reg. no. 1969/000032/06
JSE code: GRF ISIN: ZAE 000027405
Revenue from continuing operations
(R`millions) down 4%
Dec 11 4 407
Dec 10 4 571
Operating profit from continuing operations
Including fair value adjustments
(R`millions) down 40%
Dec 11 219
Dec 10 368
Cash and cash equivalents from continuing operations
(R`millions) up 117m
Dec 11 2 335
June 11 2 218
Fully diluted headline earnings per share
(cents) down 44%
Dec 11 130
Dec 10 233
Earnings per share
(cents) up
Dec 11 89 profit
Dec 10 354 loss
Commentary
Introduction
The weakness in the general domestic construction and engineering markets in
which the Group operates has continued during the period, exacerbated by
unpredictable delays in certain public infrastructure expenditure in South
Africa as well as postponements in mining resource capital programmes.
In contrast to this, the African mining resources, power and energy sectors are
recovering. The group`s emphasis on a larger geographic footprint for more of
its business units in Africa has assisted all three construction segments in a
small way to mitigate some of the domestic market weakness.
The Group continued to implement its conservative approach adopted last year in
terms of both the quality of the order book and cash preservation to fund
activity supporting future profit growth. It is thus encouraging to see a modest
improvement in the construction order book, with the good cash position
supporting this strategy.
However, the overall Group performance during the period was impacted by delayed
construction revenue due to contract delays and client scope changes. Losses in
Construction Materials, holding costs and losses from one previously reported
contract in the Middle East also impacted results.
Financial performance
As per the cautionary announcement of 27 January 2012, based on the Group`s
operational and strategic focus, as well as the poor outlook for the
construction market in the South Gauteng region, the board of directors of Group
Five resolved to dispose of the businesses that constitute the Construction
Materials cluster. The Group is currently in discussions with several parties to
effect these disposals. If successfully concluded, the disposals may have an
effect on the price of the company`s shares. Accordingly, shareholders are
advised to continue to exercise caution when trading in the company`s shares
until a further announcement has been made.
The Group is therefore required to account for the Construction Materials
operating cluster as a discontinued operation and Non-Current Assets classified
as Held for Sale. Accounting practice requires the comparatives reported in this
announcement to be restated to reflect the effect of the discontinued operations
on those periods. The results are thus presented indicating the previously
reported values and the restated amounts. The commentary below refers to the
restated values only.
Headline earnings per share (HEPS) decreased by 48.2% from 251 cents per share
to 130 cents per share and fully diluted HEPS (FDHEPS) by 44.2% from 233 cents
per share to 130 cents per share. Earnings per share (EPS) improved from a loss
of 354 cents per share to earnings of 89 cents per share in the current year and
fully diluted EPS (FDEPS) improved from a loss of 354 cents per share to
earnings of 89 cents per share.
Revenue from continuing operations decreased by 3.6% from R4,6 billion to R4,4
billion, mainly due to a reduction in activity levels within the civil
infrastructure markets.
Operating profit, including fair value adjustments but before impairment
adjustments, decreased by 40.5% from R368 million to R219 million. Fair value
net upward adjustments of R49,9 million (H1 F2011: R10,4 million) were recorded
during the period relating to the group`s interests in Eastern European service
concessions and its interest in property developments. Operating profit before
fair value adjustments and impairment adjustments decreased by 52.8% from R358
million to R169 million. Included within operating profit is a deficit on the
group`s pension fund of R3 million in H1 F2011.
The group`s operating margins are reflected below. For comparative purposes, the
Group provides both the total operating margin as well as the operating margin
net of non-core/headline transactions of pension fund surpluses and deficits and
profit/loss on sale or impairment of subsidiaries. The Group refers to the
latter margin as the core operating margin, as it reflects the underlying
operating performance. (The group discloses the numbers both including and
excluding fair value adjustments in the table below).
H1 F2012 H1 F2011 H2 F2011
Six months Six months Six months
ended ended ended
31 December 31 December 30 June
2011 2010 2011
Revenue - (R`000) 4 598 691 4 811 683 4 395 315
Revenue - continuing operations 4 406 818 4 570 978 4 201 787
(R`000)
Total operating margin including 5.0 8.1 5.9
fair value adjustments %
Total operating margin excluding 3.8 7.8 5.0
fair value adjustments %
Core operating margin including 5.0 8.1 5.9
fair value adjustments %
Core operating margin excluding 3.9 7.9 5.0
fair value adjustments
Notes:
Total operating margin % is defined as operating profit before impairment
adjustments as a % of revenue from continuing operations.
Core operating margin % is defined as total operating margin % adjusted for the
non-core transactions listed above.
In line with expectations, net finance income of R1,9 million was recorded
during the period compared to net finance income of R26,0 million in the prior
period and net finance income of R19,8 million in H2 F2011.
The group recognised a tax expense of R65 million, mainly due to taxation from
African jurisdictions with taxation rates higher than the South African
corporate tax rate, as well as a conservative approach adopted to the raising of
deferred taxation assets.
Financial position
It is pleasing to note that the Group`s statement of financial position
continues to be sound, with a nil net gearing ratio and bank balances and cash
of R2,3 billion as at 31 December 2011.
The statement of financial position has been restated to reflect the required
changes, accounting for Construction Materials as a discontinued operation, as
outlined above.
During the prior year, the Group processed a gross impairment of R550 million in
its Construction Materials business due to management concluding that the
foreseeable market valuation of the aggregate and certain readymix assets was
considerably less than the current carrying amount on the statement of financial
position. This impairment was in addition to the gross impairment of R326
million taken at 30 June 2010. The prior year`s impairments and operating losses
(net of taxation) are now reflected as discontinued losses in the prior
reporting periods. No impairment to carrying value of these assets has been
recorded in the current period under review. The current year`s discontinued
loss represents both the operating losses from Construction Materials net of
taxation, as well as an amount of R10,8 million (H1 F2011: R9,3 million) which
was charged to the income statement, mainly as a result of the assessment of the
amount due from contract claims on a terminated Indian toll road contract which
continues through arbitration.
Cash flow
The group generated R236 million cash from operations before working capital
changes (H1 F2011: R417 million) and generated R355 million from operations (H1
F2011 R390 million utilised). The improvement in working capital was as a result
of an increase in advance payments received and excess billings charged, as well
as a corresponding decrease in work in progress balances.
Dividend
The group`s adopted dividend policy is approximately four times basic earnings
per share dividend cover. In line with this policy, a dividend for this period
of 22 cents per share (H1 F2011: 52 cents) has been declared. The dividend
policy therefore remains unchanged, based on the medium term business outlook
and the availability of liquid resources.
Business combinations
There were no business combinations in the period under review.
As mentioned above, the Group has resolved to dispose of its Construction
Materials businesses. Construction Materials comprises sand and aggregates,
readymix and extenders and mining crushing services.
The construction materials market in Gauteng where Construction Materials
operate has remained heavily oversupplied with insufficient work being available
to quarry owners who need to move quality materials at heavily discounted
prices. Competitors with the benefit of an integrated offering through the value
chain of cement, aggregates and readymix concrete and others with mobile
crushing operations that locate from opportunity to opportunity have survived
this extended downturn better than fixed quarry businesses.
Revenue for Construction Materials for the six months decreased by 20.3% from
R241 million to R192 million, with a core operating loss of R31 million (H1
F2011: loss of R33 million). The loss on discontinuance is reported at R30,1
million (H1 F2011: R572 million).
Management has concluded that Construction Materials cannot be a core business
for Group Five and will be sold. In this regard, the Group is engaging with
parties who have expressed an interest in the various businesses and assets. It
is acknowledged that there has been destruction in shareholder value in the
Group`s venture into this market, with hard lessons learnt. This business has
experienced unforeseeably historically low depressed markets and it would be
costly for shareholders were the group to wait for a market recovery before
exiting the business.
Operational review
GROUP
The Group`s businesses performed broadly in line with management expectations
and in accordance with the guidance provided in November 2011 when all
construction margins were guided down.
Group-wide restructuring and cost cutting, without losing core capacity, had a
net cost in the first half. The benefits will only be realised from H2 F2012 and
F2013. In addition, the Group has purposefully continued to carry costs related
to its investment in future opportunities and capacity building. The benefits of
these initiatives will not be realised before F2013.
As expected, the period`s results were impacted by losses in the Construction
Materials segment. The Civil Engineering results have been impacted in short
term by losses on a Jordan pipeline contract and holding costs in the Middle
East deployed to manage out legacy contracts.
INVESTMENTS AND CONCESSIONS
(including Infrastructure H1 F2012 H1 F2011 H2 F2011
Concessions and Property Six months Six months Six months
Developments) ended ended ended
31 December 31 December 30 June
2011 2010 2011
Revenue - (R`000) 320 250 282 361 272 298
Total operating margin including 27.6 17.5 21.9
fair value adjustments %
Total operating margin excluding 12.0 13.8 7.8
fair value adjustments %
Core operating margin % including 27.8 17.8 22.5
fair value adjustments %
Core operating margin excluding fair 12.2 14.1 8.4
value adjustments
Investments and Concessions consists of Infrastructure Concessions and Property
Developments. This cluster contributed 7.3% (H1 F2011: 6.2%) to group revenue.
Infrastructure Concessions
In spite of sluggish domestic concessions and PPP activities and the economic
pressures in Europe, Infrastructure Concessions performed ahead of expectations
as new tolling contracts came on line in Eastern Europe.
Revenue increased by 13.8% to R306 million (H1 F2011: R269 million), core
operating margin improved to 25.8% (H1 F2011: 20.3%), with core operating profit
at R79 million (H1 F2011: R54 million). The changes in the carrying value of
concession assets are regarded and accounted for globally as a core component of
the concessions business. Included in core operating profit are upward fair
value adjustments on service concessions of R39 million (H1 F2011: R10 million).
Eastern European and growing African concession opportunities are set to remain
attractive, with further new projects under development in transport projects
and power.
Going forward, the timing of awards in the South African public sector buildings
and healthcare PPPs and transport concession markets remains uncertain in light
of current delays and unconvincing government policy and commitment. The
uncertainty over whether the N1/N2 Winelands toll road project, awarded to the
consortium led by Group Five, will go ahead, is just one example.
The outcome of the government`s deliberations on the resolution of the Gauteng
Freeway Tolling impasse and of the recently established Presidential
Infrastructure Coordinating Commission will be crucial for the construction
sector and job creation.
The group is, however, encouraged by the private sector`s commitment to
renewable energy. The Group is well positioned to participate. It will be
crucial for this programme to meet the stated deadlines for quick adjudication
and award to pre-qualified bidders who are able to demonstrate bankability.
Property Developments
Property Developments` revenue increased by 6.8% to R15 million (H1 F2011: R14
million) and core operating profit to R10,2 million (H1 F2011: R4, 2 million
loss). Included in core operating profit is an upward fair value adjustment on
property developments of R11 million (H1 F2011: nil).
Property Developments returned to profitability in line with the Group`s stated
expectations. The Group continues to progress its strategy of disinvestment from
the traditional residential sector in favour of securing A-grade commercial and
retail property development positions in targeted geographies.
MANUFACTURING
H1 F2012 H1 F2011 H2 F2011
Six months ended Six months ended Six months ended
31 December 2011 31 December 2010 30 June 2011
Revenue - (R`000) 495 973 405 138 462 385
Total operating margin % 4.4 7.8 (1.2)
Core operating margin % 4.4 7.9 (1.2)
Manufacturing consists of building products business, Everite, as well as steel
fabrication businesses BRI and Group Five Pipe. Manufacturing contributed 11.3%
(H1 F2011: 8.9%) to Group revenue.
Revenue increased by 22.4% from R405 million to R496 million. Core operating
profit decreased by 32.0% from R32 million to R22 million, resulting in a core
operating margin of 4.4% (H1 F2011: 7.9%). Core operating margin for H2 F2011
was a loss of 1.2%.
Investments in production technologies, product range extension and the closure
of the troubled steel fabrication facility have led to improving competitiveness
and domestic and export market growth. An increase in volumes traded in Everite
and BRI during the reporting period lifted the manufacturing performance from
the last reported results. Group Five Pipe remains tied to large water transport
project demand, which exhibits some loading unpredictability in the short term.
In the period under review, further progress was made in developing the Group`s
Advanced Building Technologies (ABT) product offering into the housing and
building market.
CONSTRUCTION
H1 F2012 H1 F2011 H2 F2011
Six months ended Six months ended Six months
31 December 2011 31 December 2010 ended
30 June 2011
Revenue - (R`000) 3 590 595 3 883 479 3 467 104
Total operating margin % 3.0 7.4 5.6
Core operating margin % 3.0 7.4 5.5
Construction comprises the business segments of Building and Housing, Civil
Engineering and Engineering. Engineering incorporates the businesses of Projects
and Engineering & Construction (E+C).
Construction continued to be the largest cluster in the group, contributing
81.5% to Group revenue (H1 F2011: 85.0%).
Construction revenue decreased by 7.5% from R3,9 billion to R3,6 billion and
core operating profit decreased by 62.1% to R109 million (H1 F2011: R288
million). Over-border work contributed 26% (H1 F2011: 25%) to Construction
revenue. The overall Construction core operating margin period on period
declined from 7.4% to 3.0%. The core operating margin in H2 F2011 was 5.5%.
Construction performance was impacted by delayed revenue due to postponements in
domestic contract awards and customer-initiated scope change delays, as well as
holding costs and losses in the Middle East from one contract as previously
reported. In addition, the Group purposefully continued to carry costs related
to its investment in future opportunities and capacity building in renewable
power, nuclear readiness, postponed local and new over-border PPPs, as well as
oil and gas and geographic expansion. As stated above, the benefits of these
initiatives will not be realised before F2013.
Building and Housing
H1 F2012 H1 F2011 H2 F2011
Six months ended Six months ended Six months ended
31 December 2011 31 December 2010 30 June
2011
Revenue - (R`000) 1 310 766 1 215 101 927 903
Total operating margin % 2.6 7.5 5.0
Core operating margin % 2.6 7.5 4.9
Revenue increased by 7.9% from R1,2 billion (79% local) to R1,3 billion (80%
local). Core operating profit decreased by 63.4% to R33 million (H1 F2011: R91
million), resulting in a core operating margin of 2.6% (H1 F2011: 7.5%). Core
operating margin for H2 F2011 was 4.9%.
During the period, the private sector property market for buildings remained
weak and overtraded, with inherently low margins and unattractive cash flows.
This has been coupled with the slowdown in government`s promised infrastructure
spend and the lack of awards of certain PPP concession projects, including large
public buildings, healthcare and correctional services. The Group has been
declared the preferred bidder on some of these projects.
The coastal region performed well, although margins were constrained.
The Building and Housing segment established an over-border capability in new
markets, which will mitigate some domestic market decline.
In the short term the Building business will be under pressure while markets are
further developed and while new awards against tenders under adjudication are
awaited.
The Housing business has, however, seen a recent marked improvement in domestic
mining and affordable and RDP housing work load.
The secured one-year order book stands at R2, 4 billion (85% local) (FY 2011:
R2,1 billion and 88% local) and total secured work at R3,6 billion (77% local)
(FY 2011: R3,1 billion (75% local)).
Civil Engineering
H1 F2012 H1 F2011 H2 F2011
Six months Six months Six months
ended ended ended
31 December 31 December 30 June
2011 2010 2011
Revenue - (R`000) 1 217 078 1 863 462 1 684 899
Total operating margin % 2.6 6.9 6.1
Core operating margin % 2.6 7.0 6.1
Civil Engineering includes the Group`s civil engineering activities in South
Africa, the rest of Africa and the Middle East.
Civil Engineering revenue decreased by 34.7% from R1, 9 billion (86% local) to
R1,2 billion (78% local). Core operating profit decreased by 75.4% from R130
million to R32 million, accompanied by a decrease in overall core operating
margin to 2.6% from 7.0% in the corresponding period and 6.1% in H2 F2011.
As outlined above, the Civil Engineering result has been impacted by revenue and
margin shifting out in time due to late contract awards and hence delayed
starting times, as well as scope changes on several large domestic projects.
Against this, the underlying South African and African business delivered well
on contracts executed in the period.
In the Middle East slow but positive progress continues to be achieved in
contract resolution, including cash recovery. The Jordan pipeline project,
however, has returned further losses. This project is in the process of being
terminated by mutual agreement with the contracting parties. In addition, costs
are being expensed as they occur for the commercial resources deployed in Dubai
which continue working through the contractual finalisation and cash collection
of completed, but not commercially closed, as well as terminated contracts.
Although tendering activity is high and increasing in South Africa and the rest
of Africa, awards are currently infrequent. The business is proactively
mitigating domestic market conditions by progressively rebuilding its African
order book in geographies in which the Group has prior operating experience and
where growth opportunities are stronger.
The Group expects meaningful contract awards and margin improvement in Civil
Engineering to realise over the next 12 months derived from intervention
in the Middle East and its South Africa and Rest of Africa tender opportunity
pipeline in targeted sectors of mining, power, water and environment and
transport.
Civil Engineering`s secured one-year order book stands at R2,5 billion
(48% local) compared to R2,5 billion (57% local) as at 30 June 2011. The full
order book is at R4,1 billion (48% local) (FY 2011 R3, 7 billion (58% local)).
Engineering
H1 F2012 H1 F2011 H2 F2011
Six months Six months ended Six months ended
ended 31 December 2010 30 June
31 December 2011
2011
Revenue - (R`000) 1 062 751 804 916 854 302
Total operating margin % 4.1 8.3 5.2
Core operating margin % 4.1 8.4 5.2
The Engineering cluster is the Group`s engineering and plant building segment
and incorporates the Projects business and the Engineering & Construction (E+C)
business.
Engineering is experiencing a recovery in enquiry levels from the sub-Saharan
African mining and energy markets, which resulted in new contract awards during
the period under review. This trend is expected to continue in various mineral
categories, technologies and geographies. This augurs well for a sustained
recovery ahead, albeit lumpy in nature.
During the period, revenue increased from R805 million (44% local) to R1,1
billion (62% local), with core operating profit decreasing by 34.8% from R67
million to R44 million. Core operating margin decreased to 4.1% (H1 F2011:
8.4%). Core operating margin for H2 F2011 was 5.2%.
Although the underlying contract margins are still good, they reflect increased
competition. The margin for the period was also impacted by the high costs
incurred in bidding for the many renewable energy projects against the REFIT
(renewable energy feed-in tariff) programmes and building capacity in nuclear.
The margin retraction on higher revenues is temporary and should improve over
the next 12 months.
The E+C business has bid with a number of the power plant developers who have
pre-qualified under the REFIT 1 programme. Contract awards are expected in H1
F2013. Further bids will be submitted under the REFIT 2 programme in March 2012.
The secured one-year order book was maintained at R1,4 billion (64% local) (30
June 2011: R1,4 billion secured work) (75% local). The full secured order book
stands at R2,6 billion (66% local) (FY 2011: R2,0 billion (83% local)).
PROSPECTS
The Group`s total secured Construction order book stands at R10,3 billion (30
June 2011: R8,8 billion). The Construction one-year order book stands at R6,4
billion (30 June 2011: R5,9 billion).
The value of the Group`s target opportunity pipeline stands at R144 billion, up
from R134 billion in August 2011, with activity in all its markets.
The Investments and Concessions cluster is delivering annuity business growth,
with group-wide opportunities in active infrastructure sectors in increasingly
more geographies.
Manufacturing has been re-focused and its performance is improving on higher
sales volumes to a broadening number of markets.
The disposal of the loss-making Construction Materials business will relieve the
cash drain from this segment on the Group and improve returns once completed.
Based on the Group`s positioning in the key infrastructure growth sectors of
power, mining, oil and gas, water and transport and in the concessions market
for specific projects, as well as the progress made in terms of improving the
group`s internal efficiencies, management expect a slow recovery in group
activity levels from the second half of F2012. This should support some
improvement in the Group`s trading performance from F2013. The timing of this
recovery is dependent on the timing of awards on visible projects.
ESTIMATES AND CONTINGENCIES
The group makes estimates and assumptions concerning the future, particularly
with regard to construction contract profit taking, provisions, arbitrations and
claims and various fair value accounting policies. The resulting accounting
estimates and judgments can, by definition, therefore only approximate the
actual results. Estimates and judgments are continually evaluated and are based
on historical experience and other factors, including expectations of future
events that are believed to be reasonable under the circumstances.
Total financial institution guarantees given to third parties on behalf of
subsidiary companies amounted to R3 434 million as at 31 December 2011, compared
to R4 537 million as at 30 June 2011.
DIVIDEND DECLARATION
The directors have declared an interim dividend number 67 of 22 cents per
ordinary share (2011: 52 cents dividend) payable to shareholders.
In order to comply with the requirements of Strate, the relevant details are:
Event Date
Last day to trade (cum-distribution) Friday, 13 April 2012
Shares to commence trading (ex-distribution) Monday, 16 April 2012
Record date (date shareholders recorded in Friday, 20 April 2012
books)
Payment date Monday, 23 April 2012
No share certificates may be dematerialised or Monday, 16 April 2012 and
rematerialised between Friday, 20 April 2012
BASIS OF PREPARATION
These consolidated condensed interim financial statements for the six months
ended 31 December 2011 have been prepared in accordance with IAS 34, "Interim
Financial Reporting" and in the manner required by the Companies Act of South
Africa. The consolidated condensed interim financial information should be read
in conjunction with the annual financial statements for the year ended 30 June
2011, which have been prepared in accordance with International Financial
Reporting Standards (IFRS). The accounting policies applied are consistent with
those of the annual financial statements for the year ended 30 June 2011, as
described in those financial statements.
The above information has not been reviewed or reported on by Group Five`s
auditors.
BOARD CHANGES
There were no changes to the board of directors during the period under review.
ACKNOWLEDGMENTS
The group wishes to recognise the hard work and commitment of its employees.
On behalf of the board
MP Buthelezi MR Upton
Chairperson Chief Executive Officer
7 February 2012
Board of directors: P Buthelezi* (Chairperson), MR Upton (CEO), CMF Teixeira
(CFO), LE Bakoro*, L Chalker*+, Dr JL Job*, OA Mabandla*, SG Morris*, KK
Mpinga*, DDS Robertson*+
*(Non-executive director) + (British) (DRC)
Transfer secretaries: Computershare Investor Services (Pty) Ltd, 70 Marshall
Street, Johannesburg 2001
Please visit our website: www.groupfive.co.za
Condensed consolidated income statement
(R`000) Six months Six months Six months Full Full year
ended ended ended year ended
31 Dec 2011 31 Dec 2010 31 Dec 2010 ended 30 June
restated as 30 June 2011
previously 2011 as
reported restated previousl
y
reported
Revenue 4 598 691 4 811 683 4 811 683 9 206 9 206 998
998
Continuing 4 406 818 4 570 978 4 811 683 8 772 9 206 998
operations 765
Discontinued 191 873 240 705 - 434 233 -
operations
Operating profit 169 123 357 997 324 575 566 986 498 828
before fair value
adjustments and
impairment
adjustments
Fair value 49 911 10 417 10 417 48 844 48 844
adjustments
relating to
investment in
service concessions
and property
developments
Operating profit 219 034 368 414 334 992 615 830 547 672
before impairment
adjustments
Impairment of - - (550 540) - (550 540)
property, plant and
equipment and
goodwill
Operating 219 034 368 414 (215 548) 615 830 (2 868)
profit/(loss)
Share of 126 (521) (521) 820 820
profit/(loss) from
associates
Finance income 38 442 64 048 58 374 106 552 96 060
Finance costs (36 501) (37 984) (46 378) (60 644) (77 699)
Profit/(loss) 221 101 393 957 (204 073) 662 558 16 313
before taxation
Taxation (65 227) (120 502) (94 354) (209 (158 143)
990)
Profit/(loss) after 155 874 273 455 (298 427) 452 568 (141 830)
taxation from
continuing
operations
Loss for the period
from discontinued
operations
(40 960) (581 166) (9 284) (611 (17 214)
612)
Profit/(loss) for 114 914 (307 711) (307 711) (159 (159 044)
the period 044)
Allocated as
follows:
Equity shareholders 86 073 (339 362) (339 362) (218 (218 107)
of Group Five 107)
Limited
Non controlling 28 841 31 651 31 651 59 063 59 063
interest
114 914 (307 711) (307 711) (159 (159 044)
044)
Earnings/(loss) per 0,89 (3,54) (3,54) (2,27) (2,27)
share - R
Fully diluted 0,89 (3,54) (3,54) (2,27) (2,27)
earnings/(loss) per
share - R
Determination of headline earnings
(R`000) Six Six months Six Full year Full
months ended months ended year
ended 31 Dec 2010 ended 30 June ended
31 Dec restated 31 Dec 2011 30 June
2011 2010 restated 2011
as as
previousl previous
y ly
reported
reported
Attributable 86 073 (339 362) (339 362) (218 107) (218
profit/(loss) 107)
Adjusted for (net of 39 511 580 145 544 249 609 766 536 989
tax)
- Loss/(profit) on 5 728 (202) (202) 832 832
sale of property,
plant and equipment
and investment
property
- Loss/(profit) on 619 (819) (819) 574 574
subsidiary
- Impairment of - - 535 986 - 521 621
property, plant and
equipment and
goodwill
- Net profit on fair (7 796) - - (3 252) (3 252)
value adjustments on
investment property
- Losses from
discontinued
operations 40 960 581 166 9 284 611 612 17 214
Headline earnings 125 584 240 783 204 887 391 659 318 882
Condensed consolidated statement of comprehensive income
(R`000) Six Six Full year
months months ended
ended ended 30 June
31 Dec 31 Dec 2011
2011 2010
Profit/(loss) for the period 114 914 (307 711) (159 044)
Other comprehensive income for the
period net of tax
Exchange differences on translating 85 517 (64 994) (45 948)
foreign operations
Total comprehensive income/(loss) 200 431 (372 705) (204 992)
for the period
Total comprehensive income/(loss)
for the period attributable to
Equity shareholders of Group Five 171 590 (404 356) (264 055)
Limited
Non controlling interest 28 841 31 651 59 063
Total comprehensive income/(loss) 200 431 (372 705) (204 992)
for the period
Condensed consolidated statement of financial position
(R`000) Six Six Six Full year Full
months months months ended year
ended ended ended 30 June ended
31 Dec 31 Dec 31 Dec 2011 30 June
2011 2010 2010 restated 2011
restated as as
previousl previous
y ly
reported
reported
ASSETS
Non-current
assets
Property, plant 905 021 894 788 1 529 649 857 459 1 430
and equipment 457
and investment
property
Investments - 300 199 243 693 243 693 253 100 253 100
service
concessions
Investments - 8 691 128 691 128 691 8 691 8 691
property
developments
Other non- 174 911 159 381 178 206 213 725 227 745
current assets
1 388 1 426 2 080 239 1 332 975 1 919
822 553 993
Current assets
Other current 3 682 3 384 3 539 915 3 406 469 3 562
assets 210 044 973
Bank balances 2 335 2 418 2 417 047 2 218 334 2 234
and cash 460 363 779
6 017 5 802 5 956 962 5 624 803 5 797
670 407 752
Non-current 692 995 867 474 59 233 813 200 53 233
assets
classified as
held for sale
Total assets 8 099 8 096 8 096 434 7 770 978 7 770
487 434 978
EQUITY AND
LIABILITIES
Capital and
reserves
Equity 2 311 2 030 2 030 748 2 148 130 2 148
attributable to 776 748 130
equity holders
of the parent
Non controlling 102 052 93 638 93 638 117 565 117 565
interest
2 413 2 124 2 124 386 2 265 695 2 265
828 386 695
Non-current
liabilities
Interest bearing 132 526 727 762 832 349 155 524 232 203
borrowings
Other non- 50 267 26 448 62 558 77 482 87 326
current
liabilities
182 793 754 210 894 907 233 006 319 529
Current
liabilities
Other current 5 280 4 859 5 059 644 4 970 925 5 185
liabilities 606 894 754
Bank overdrafts - 17 497 17 497 - -
5 280 4 877 5 077 141 4 970 925 5 185
606 391 754
Liabilities 222 260 340 447 - 301 352 -
associated with
non-current
assets held for
sale
Total equity and 8 099 8 096 8 096 434 7 770 978 7 770
liabilities 487 434 978
Condensed consolidated statement of cash
flow
(R`000) Six Six Six Full year Full year
months months months ended ended
ended ended ended 30 June 30 June
31 Dec 31 Dec 31 Dec 2011 2011
2011 2010 2010 restated as
restated as previously
previousl reported
y
reported
Cash flow from
operating
activities
Profit before 236 035 417 021 462 188 780 252 756 256
working
capital
changes
Working 118 810 (807 (805 481) (1 360 (1 237
capital 237) 197) 775)
changes
Cash 354 845 (390 (343 293) (579 945) (481 519)
generated/ 216)
(utilised)
from
operations
Finance income 1 941 26 064 11 996 45 908 18 361
- (net)
Taxation and (95 124) (192 (192 451) (375 756) (375 756)
dividends paid 451)
Net cash 261 662 (556 (523 748) (909 793) (838 914)
generated/ 603)
(utilised) by
operating
activities
Property, (110 (47 807) (58 754) (53 360) (48 800)
plant and 332)
equipment and
investment
property (net)
Investments (22 129) (20 594) (20 594) 117 517 117 517
(net)
Net cash (132 (68 401) (79 348) 64 157 68 717
(utilised)/ 461)
generated in
investing
activities
Net cash (67 057) (27 523) (49 431) (51 110) (92 809)
utilised in
financing
activities
Effects of 80 068 (53 739) (53 739) (8 032) (8 032)
exchange rates
on cash and
cash
equivalents
Net cash (25 086) 890 - 16 870 -
(utilised)/
generated by
discontinued
operations
Net increase/ 117 126 (705 (706 266) (887 908) (871 038)
(decrease) in 376)
cash and cash
equivalents
Condensed consolidated segmental analysis
(R`000) % Six months Six
chang ended months
e 31 Dec 2011 ended
31 Dec
2010
restated
REVENUE
Investments and 13 320 250 282 361
Concessions
Infrastructure Concessions 14 305 519 268 567
Property Developments 7 14 731 13 794
Manufacturing 22 495 973 405 138
Construction Materials - - -
Construction (8) 3 590 595 3 883 479
Building and Housing 8 1 310 766 1 215 101
Civil Engineering (35) 1 217 078 1 863 462
Engineering Projects 32 1 062 751 804 916
Total revenue (4) 4 406 818 4 570 978
(R`000) H1 2012 %
Core chang
margin % e
OPERATING PROFIT
Investments and 27.8 77 88 965 50 249
Concessions
Infrastructure Concessions 25.8 45 78 757 54 455
Property Developments 69.3 343 10 208 (4 206)
Manufacturing 4.4 (32) 21 587 31 860
Construction Materials - - - -
Construction 3.0 (62) 109 102 288 212
Building and Housing 2.6 (63) 33 438 91 278
Civil Engineering 2.6 (75) 31 827 129 590
Engineering Projects 4.1 (35) 43 837 67 344
Total core operating 5.0 (41) 219 654 370 321
profit
Adjustments for non-
operational transactions
Pension fund deficit - (3 000)
(Loss)/profit on sale of (619) 1 093
subsidiary
Reported operating profit 219 034 368 414
Condensed consolidated segmental analysis continued
(R`000) Six months Full year Full year
ended ended ended
31 Dec 2010 30 June 30 June
as previously 2011 2011
reported restated as
previousl
y
reported
REVENUE
Investments and Concessions 282 361 554 659 554 659
Infrastructure Concessions 268 567 522 870 522 870
Property Developments 13 794 31 789 31 789
Manufacturing 405 138 867 523 867 523
Construction Materials 240 705 - 434 233
Construction 3 883 479 7 350 583 7 350 583
Building and Housing 1 215 101 2 143 004 2 143 004
Civil Engineering 1 863 462 3 548 361 3 548 361
Engineering Projects 804 916 1 659 218 1 659 218
Total revenue 4 811 683 8 772 765 9 206 998
(R`000)
OPERATING PROFIT
Investments and Concessions 39 832 111 469 62 624
Infrastructure Concessions 44 038 106 336 73 176
Property Developments (4 206) 5 133 (10 552)
Manufacturing 31 860 26 342 26 342
Construction Materials (33 422) - (68 157)
Construction 288 212 480 318 480 318
Building and Housing 91 278 136 900 136 900
Civil Engineering 129 590 231 904 231 904
Engineering Projects 67 344 111 514 111 514
Total core operating profit 326 482 618 129 501 127
Adjustments for non-
operational transactions
Pension fund deficit (3 000) (2 000) (2 000)
(Loss)/profit on sale of
subsidiary 1 093 (299) (299)
Reported operating profit 324 575 615 830 498 828
Condensed consolidated statement of changes in equity
(R`000) Six Six months Full year
months ended ended
ended 31 Dec 30 June
31 Dec 2010 2011
2011
Balance at 1 July 2 265 695 2 561 412 2 561 412
Net profit/(loss) for the period 114 914 (307 711) (159 044)
Other comprehensive income for the 85 517 (64 994) (45 948)
period
Share options expense 11 366 19 721 46 836
Distribution to non controlling (44 354) (13 068) (16 553)
interest
Dividends paid (19 309) (70 974) (121 008)
Balance at end of period 2 413 828 2 124 386 2 265 695
Statistics
(R`000) Six months Six months
ended ended
31 Dec 2011 31 Dec 2010
restated
Number of ordinary shares 96 023 132 95 910 170
Shares in issue 121 571 162 120 911 817
Less: Shares held by share trusts (25 548 (25 001
030) 647)
Weighted average number of shares (`000s) 96 545 95 910
Fully diluted weighted average number of 96 750 103 467
shares (`000s)
Earnings/(loss) per share - R 0,89 (3,54)
Headline earnings per share - R 1,30 2,51
Fully diluted earnings/(loss) per share - 0,89 (3,54)
R
Fully diluted headline earnings 1,30 2,33
per share - R
Dividend per share (cents) 22,0 52,0
Interim 22,0 52,0
Final - -
Net asset value per share - R 24,1 21,2
Net debt to equity ratio - -
Current ratio 1.1 1.2
Statistics continued
(R`000) Six months Full year Full year
ended ended ended
31 Dec 2010 30 June 30 June
as 2011 2011
previously restated as
reported previously
reported
Number of ordinary shares 95 910 170 96 004 779 96 004 779
Shares in issue 120 911 817 121 477 858 121 477 858
Less: Shares held by share (25 001 (25 473 (25 473
trusts 647) 079) 079)
Weighted average number of 95 910 96 114 96 114
shares (`000s)
Fully diluted weighted average 103 467 101 137 101 137
number of shares (`000s)
Earnings/(loss) per share - R (3,54) (2,27) (2,27)
Headline earnings per share - 2,14 4,07 3,32
R
Fully diluted earnings/(loss) (3,54) (2,27) (2,27)
per share - R
Fully diluted headline 1,98 3,87 3,15
earnings per share - R
Dividend per share (cents) 52,0 72,0 72,0
Interim 52,0 52,0 52,0
Final - 20,0 20,0
Net asset value per share - R 21,2 22,38 22,38
Net debt to equity ratio - - -
Current ratio 1.2 1.1 1.1
Capital expenditure and depreciation
(R`000) Six Six Six Full Full year
months months months year ended
ended ended ended ended 30 June
31 Dec 31 Dec 31 Dec 30 June 2011
2011 2010 2010 2011 as
restate as restate previousl
d previousl d y
y reported
reported
Capital expenditure 148 278 60 720 72 575 134 736 150 352
for the period
Capital expenditure 282 042 90 852 109 852 183 072 203 745
committed or
authorised at the
period end
Depreciation for 78 260 94 543 117 530 166 888 211 557
the period
Date: 13/02/2012 08:00:01 Produced by the JSE SENS Department.
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