Diversified SA firm rues year’s losses

Group 5 constructionJOHANNESBURG, (CAJ News) – GROUP Five, the diversified South African company, has announced a disappointing set of results for the full year ended June 30, owing under-performance in the Engineering and Construction cluster.

Group revenue decreased by 9,7 percent from R15,4 billion to R13,9 billion during the period.

The disappointing results were largely a result of further material losses incurred on a South African contract in the Eastern Cape that impacted both the Civil Engineering and Projects segments, retrenchment and holding costs in relation to the rightsizing of the Civil Engineering segment and a weak performance in the Energy segment due to delayed new contract start-ups and lower revenues and finalisation costs at completion of certain contracts.

Chief Executive Officer, Eric Vemer, said these undermined strong performance by Investments and Concessions and the solid delivery by Manufacturing.

“Against this disappointing performance, we examined what needs to be fixed in our business and established clear plans to tackle the difficult issues head on, agree a common way forward and deliver on action plans. Measures taken have included increasing our team’s responsibility, accountability and consequences for poor delivery,” he said.

Vemer said despite market conditions tightening in certain areas, an improvement in the group’s financial performance was expected in the year ahead.

The company is banking its success on enhanced group operating structure, anticipated continued solid business performance by Investments & Concessions, an improvement in the group’s reported loss-making ratio supported by completion of the material loss-making South African contract that impacted results.

“Our continuously improving approach to large multi-disciplinary contract execution has provided us with the confidence and competitive advantage to grow our participation in these markets in future, whilst maintaining our prudent approach to risk.”

– CAJ News

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