The diversified construction, infrastructure concessions and related services group also stated that it delivered a disappointing overall result for the six month reporting period.
“This was mainly as a result of contract losses within the civil engineering segment, specifically on one previously reported contract experiencing operational difficulties, restructuring costs incurred in the rightsizing of the civil engineering segment,” [DATA GRF:Group Five] said.
It also cited a weaker energy segment margin due to finalisation costs at completion of certain contracts and a lower rate of trade in a number of segments due to a slow order intake during the period as contributing factors.
“The group’s manufacturing cluster delivered a steady performance in flat markets whilst the investments and concessions cluster delivered an improved result on the back of a good performance from the European operations,” said the company.
“The South African market remains generally subdued with poor visibility on the timing of larger public sector contract awards, although with pockets of activity in some of the sectors in which the group trades.”
The group added that African infrastructure remains an area of focus, with some notable success in target sectors and geographies achieved in the period.
Group Five indicated that revenue for the period from continuing operations was down 12 per cent to 6.9 billion rand from 7.8 billion rand for the six months ended 31 December 2013.
Operating profit from continuing operations was down 37 per cent to 206 million rand in 2014 from 328 million rand in 2013 and earnings per share were down 41 per cent to 118 cents.
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Dividends per share for the period were down 33 per cent to 30 cents per share in 2014 from 45 cents in 2013.
“The group’s sector-focused, geographic strategy and positioning in new and traditional target markets in Africa and Eastern Europe have, and will continue to, mitigate against some of this local market weakness whilst providing good growth opportunities in the medium to longer term,” it said.
“Looking forward to the next six months to the year end to June 2015, the group expects continued pressure on earnings for H2 F2015. An improvement is expected in the group’s financial performance from F2016.”