The momentum of decline in the South African constructionenvironment has finally shown signs of slowing, says construction company Group Five CEO Eric Vemer.
Speaking at the company’s annual results presentation in Johannesburg, Vemer said the outlook for the market was by no means “rosy, but at least the decline has slowed”.
He said Group Five had noted a positive uptick in its order book during May and June, with June 30 being the end of the financial year.
Despite initial signs of the domestic construction market stabilising, it was Group Five’s Engineering & Construction (E&C) business that tripped up the company’s otherwise solid financial results.
Vemer said E&C’s weak performance was further weighed down by a R365-million provision that had to be made for a problematic debtor in the civil engineeringbusiness.
The four business units of E&C – building and housing, civil engineering, projects and energy – recorded a core operating loss of R237-million for the financial year, down from a R44-million profit in the previous financial year.
Group Five reported a 1% decline in revenue o R13.8-billion for the 2016 financial year, compared with the previous year. Operating profit increased by 97% to R722-million.
The company’s secured contracting order book dropped from R14.1-billion to R11.2-billion. The secured operations and maintenance order book improved from R4.7-billion to R6.1-billion.
The JSE-listed company was buoyed by a record-breaking performance from its Investments & Concessions business, which saw a 288% jump in core operating profit to R917-million.
Group Five had trimmed down its employee numbers from 14 500 to 9 300 over the last 18 months as the company adjusted to a stagnant market- place.
Group Five is actively targeting the improvement of gender and racial representation in the company.
Procurement from black-women-owned businesses increased by 44% over the same period.
The group has also appointed its first female MD, Bridget Ledwaba, who is now the MD of Intertoll Africa.
