Group Five cautions about expected loss

Johannesburg - Group Five [JSE:GRF] advised shareholders on Thursday that it would report a loss per share and headline loss per share of at least 170 cents per share for the six months to December 2016.

It is due to, among other things, the recognition of the group's financial socio-economic contribution of R255m, in terms of the agreement reached with the government of SA to implement a programme of initiatives that will significantly accelerate transformation of the South African construction sector, as announced in a SENS announcement of 11 October 2016.

Although payment will occur at R21.25m per annum annually over a 12-year period, the total liability must be recorded in the current reporting period as it is the period in which the liability has been incurred.

The commercial close out and final settlement of certain long outstanding contracts also made an impact.

The group also outlined that due to a difficult period for the engineering and construction (E&C) cluster, it expected profits from the underlying E&C operations - excluding the impact of the above-mentioned transactions - to be considerably below the margin guidance provided for this cluster in August 2016.

Group Five expects fully diluted headline earnings per share (FDHEPS) and headline earnings per share (HEPS) to be a loss of between 300 cents per share and 320 cents per share; and fully diluted earnings per share (FDEPS) and earnings per share (EPS) to be to be a loss of between 295 cents per share and 310 cents per share.

The six months ended 31 December 2015 reflected earnings per share (EPS) and fully diluted earnings per share (FDEPS) of 168 cents and headline earnings per share (HEPS) and fully diluted headline earnings per share of (FDHEPS) 131 cents respectively.