| Thu 23 Aug 2001, 0:00 | | Group Five Limited - Financial Report |
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Registration number 1969/000032/06
Share Code : GRF
ISIN Code : ZAE000027405
GROUP INCOME STATEMENT (R'000) AUDITED
Year ended 30 June
2001 2000
Revenue 3,167,000 2,863,410
Operating profit 85,455 47,386
Finance costs (8,025) (8,231)
Profit before taxation 77,430 39,155
Taxation (21,444) (10,675)
Profit after taxation 55,986 28,480
Minority interest (3,672) (205)
Attributable profit 52,314 28,275
Dividends (18,393) (10,300)
Retained profit for the year 33,921 17,975
Operating profit is stated after charging:
Depreciation and amortisation 65,063 67,033
ABRIDGED GROUP BALANCE SHEET (R'000) AUDITED
30 June 30 June
2001 2000
ASSETS
Non-current assets
Fixed assets 385,017 258,153
Investments - associates 24,964 13,019
- other 56,827 49,679
466,808 320,851
Current assets
Bank balances and cash 228,816 171,299
Other current assets 947,360 985,955
1,176,176 1,157,254
Total assets 1,642,984 1,478,105
EQUITY AND LIABILITIES
Capital and reserves
Shareholders equity 372,775 338,854
Minority interest 3,882 1,228
376,657 340,082
Non-current liabilities
Interest bearing borrowings 30,895 9,205
Deferred taxation 2,191 4,641
33,086 13,846
Current liabilities
Accounts payable 1,136,654 909,029
Bank overdrafts and short-term borrowings 86,219 211,694
Shareholders for dividend 10,368 3,454
1,233,241 1,124,177
Total equity and liabilities 1,642,984 1,478,105
SUMMARISED CASH FLOW STATEMENT (R'000)
Cash flow from operating activities
Cash from operations 131,920 109,861
Working capital changes 265,737 (83,402)
Cash generated from operations 397,657 26,459
Finance cost (8,025) (8,231)
Taxation and dividends paid (34,658) (26,855)
Net cash from operating activities 354,974 (8,627)
Fixed assets (net) (175,844) (58,283)
Investments (net) (17,828) (27,369)
Financing activities (22,882) 56,507
Net increase/(decrease) in cash
equivalents 138,420 (37,772)
SEGMENTAL ANALYSIS (R'000)
1.1 REVENUE
Construction 2,349,659 2,105,255
Manufacturing 585,849 554,755
Other 231,492 203,400
3,167,000 2,863,410
1.2 OPERATING PROFIT
Construction 59,762 30,305
Manufacturing 2,561 4,594
Other 23,132 12,487
85,455 47,386
STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY (R'000)
Balance at 1 July 338,854 450,094
Change in accounting policy relating
to fixed assets (96,112)
Group unbundling (33,103)
Retained earnings for the year 33,921 17,975
Balance at 30 June 372,775 338,854
INVESTMENTS
Unlisted shares at fair value 56,827 49,679
Capital expenditure for the year 202,806 85,068
Capital expenditure committed or
authorized 110,389 112,473
STATISTICS
Number of ordinary shares 69,119,591 69,119,591
Shares in issue 73,573,023 73,573,023
Less: Treasury shares 4,453,432 4,453,432
Earnings per share - cents
(basic and diluted) 75.7 40.9
Headline earnings per share - cents 71.8 37.7
Dividend cover 3.0 2.9
Dividends per share -
Cents 25.0 14.0
Interim 10.0 9.0
Final 15.0 5.0
Net asset value per share - cents 539.3 490.2
Current ratio 1.0 1.0
COMMENTS
Financial Overview
Group Five achieved strong results for the year ended 30 June 2001 with
significant increases in both profit before tax and cash generated from
operations.
Whilst turnover increased by 11% to R3.2 billion, profit before tax was up
98% to R77.4 million and earnings per share increased by 85% to 75.7 cents.
Cash generated from operations increased from R26.4 million to R397,7
million due mainly to effective working capital management.
In spite of significant investments in fixed assets, approximately half of
which related to the consolidation of Everite Building Products
manufacturing operations, the Group's cash flow was positive and the balance
sheet remains strong.
Restructuring the Business
During this year we have rebuilt the company to deliver sustainable future
earnings growth.
We collapsed the pyramid shareholding structure to unlock value and ensure a
more investor friendly Group.
The operational structures were flattened, new appointments made in key
positions throughout the organisation, and the board strengthened.
Operational Review
Overall our construction activities performed well and produced excellent
results.
Building was our star performer, further strengthening its cash generating
abilities and more than doubling its profit.
Roads showed growth in Africa but our Southern African operations delivered
disappointing results due to loss making contracts which were completed
during this financial year.
Civils has improved both its profitability and order book and has re-
established itself in Mauritius.
Engineering, although improving, has not yet achieved the levels we believe
it is capable of and general management will continue to be strengthened.
Infrastructural Development Services showed impressive growth and is proof
of our ability to find innovative and workable solutions for our clients.
The formidable task of turning around the fortunes of certain of our
manufacturing activities is proving more difficult, time consuming and
costly than had been anticipated. Delays in commissioning machines on the
single site at Everite Building Products will result in benefits flowing
somewhat later than originally envisaged.
Losses have been halted at Vaal Sanitaryware but continue at AC Pipes,
although at a lower level. Our focus at AC Pipes is to further streamline
the product range, reduce stock levels and improve market awareness and
customer relations.
DPI Plastics has been a strong performer in a difficult market and Group
Five Pipe produced a better than expected result.
Our toll road company, Intertoll, had another very successful year.
Prospects
Our leaner operating structure has now settled down and the problems
experienced in manufacturing should largely be resolved within the
foreseeable future when a turnaround can be expected.
On a macro scale, the fall in interest rates, the expected lower level of
inflation and the prospect of more government infrastructure expenditure are
positive factors.
Taking account of the above and our current order book which exceeds R2.5
billion, a meaningful improvement in earnings for the coming year is
expected.
On behalf of the board
22 August 2001
GM Thomas MH Lomas
COMPLIANCE WITH GAAP
These results for the year ended June 2001 have been compiled in accordance
with Statements of Generally Accepted Accounting Practice in South Africa
(SA GAAP) on a basis consistent with the prior year except for the following
change in accounting policies which have had an effect on shareholders
equity:
Previously property was carried at a revalued amount; property is now
classified as either investment property, which is accounted for at fair
value, or owner occupied property which is accounted for at depreciated
cost; the effect of this change on the prior year's attributable profit was
a decrease of R0,7 million and on the opening reserves a decrease of R96,1
million.
The Group was unbundled during the current year whereby SM Goldstein Limited
and Group Five Holdings Limited were deregistered and the shares held in SM
Goldstein Limited and Group Five Holdings Limited were transferred to Group
Five Limited as treasury shares. The effect of this, which would have been
required in terms of SA GAAP in any event, on the prior year's attributable
profit was a R1,9 million decrease and on the opening shareholders equity a
R31,2 million decrease.
