Group Five still in talks with Competition Commission over settlement

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Group Five warns its shareholders of the 'contingent risk' of civil claims possibly being lodged against the group after it was implicated in a Competition Commission report on anticompetitive behaviour. Group Five warns its shareholders of the 'contingent risk' of civil claims possibly being lodged against the group after it was implicated in a Competition Commission report on anticompetitive behaviour.

Diversified construction company Group Five (GRF) on Wednesday warned its shareholders of the “contingent risk” of civil claims possibly being lodged against the group after it was implicated in a Competition Commission report on anticompetitive behaviour.

But the company was quick to point out that “no claim has been instituted against the group” yet.

Group Five‚ which released it full-year results‚ said a settlement with the commission remained outstanding.

“Shareholders have been advised in previous announcements that the group has co-operated proactively with the commission. Management has continued to engage with the commission in an attempt to responsibly settle the outstanding matters on reasonable terms while being conscious of its accountability to conclude this matter for the benefit of all its stakeholders.

“Settlement has not yet been concluded due to a lack of evidence and factual discrepancies‚ which remain and which the group views as very serious‚ given the reputational impact and potential for civil claims‚” the company said.

Away from the ongoing saga with the commission‚ Group Five said it was pleased with the underlying performance of all its businesses‚ especially in the context of weak South African market conditions.

Fully diluted headline earnings per share (HEPS) from continuing operations were up 26% to 400c for the year ended June 2014. Revenue from continuing operations increased 38.9% to R15.3bn “as a result of increased activity in all of the group’s businesses”‚ the company said.

A final dividend of 55c per share was declared‚ bringing the total dividend for the year to 100c per share from 67c in the year-earlier period.

Looking ahead‚ Group Five said despite continuing constrained activity in the South African market‚ its strategies and positioning in new and traditional target markets would mitigate some of the weakness.

The group’s total secured contracting order book (construction and engineering and construction order books) stood at R12.5bn from R14bn in the year-earlier period.

The group had R4.6bn in secured operations and maintenance contracts from R4.8bn in the year-earlier period.

The overall group reported order book at June 2014 stood at R17.1bn from R19bn last year.

“Group Five is in firm negotiation for a large over-border power contract‚ which will significantly increase its order book and geographic exposure. The outlook for the business in the short term is fair to good. The order book‚ is being replenished in line with the group’s strategy‚” the company said.


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