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Jul 15, 2008:
Boosted mainly by two joint venture road contracts totalling R3,5bn announced in May, construction firm Group Five (GRF) expects annual fully diluted headline earnings per share (EPS) to rise as much as 70% to 396 cents per share, it said on Friday.
"Group Five shareholders are advised that, for the year ended 30th June 2008, the group expects fully diluted headline EPS to be between 60% to 70% higher (373 cents per share to 396 cents per share)," the group said.
The forecast fully diluted headline EPS beats an I-Net Bridge's consensus of five brokerage houses of 340,5 cents per share.
Fully diluted earnings per share (EPS) are expected to be between 50% to 60% higher (360 cents per share to 384 cents per share).
Group Five said the results, which will published early August, were boosted by a "sizeable fair value adjustment on service concessions (mainly on the realisation of a tollroad concession in the second half of the financial year) as well as normal pension fund surpluses".
In May, the South African Nation Roads Agency (SANRA) announced that it has awarded a Group Five joint venture two contracts to improve Gauteng highways to the value of R3,5bn, spread over three years.
Group Five's share as the lead contractor will be about half of the total value, the company said earlier.
Analysts said the group's earning guidance painted a picture of a "solid set of earnings" and that even without fair value adjustments, earnings would have been largely in line or slightly ahead of expectations.
Group Five said should all service concession fair value adjustments and pension fund surpluses be excluded, fully diluted HEPS are expected to be between 55% to 65% higher.
The trading update sent shares soaring more than 4%. At 12:38%, shares in the company were up 4,27%, or R1,70, at R41,50, surpassing the JSE's heavy construction index, which had gained just 0,78%. – Tiisetso Motsoeneng, I-Net Bridge
