The value of outstanding credit balances in the South African household sector increased by 3,8% to R1 542,8 billion in 2017, up from a low of 0,7% in 2016.

Thursday, 27 October 2016 01:08

National Treasury revises growth down to 0.5%

South Africa’s economy has been revised down to grow at a rate of 0.5% in 2016, National Treasury said on Wednesday.

Published in News Categories

Middle-segment house price growth remains under downward pressure, according to ABSA.

Household credit and mortgage balances growth up on base effects .

Delays in opening new outlets in Zambia and Tanzania will not hold back Botswana’s grocer Choppies from achieving its 2016 growth target of operating 200 stores.

A proposed reshuffle of casino ownership in the Western Cape market, which would have secured gaming and hotel giant Tsogo Sun a hand, is taken off the table.

Leading JSE shopping centre REIT, Hyprop, has continued its formidable track record of strong returns with an exceptional 15% increase in total distributions for the year to 543 cents a share.

Economic activity in sub-Saharan Africa is predicted to remain robust at a 5% growth in 2013 and 6.2% in 2014, according to the International Monetary Fund's latest Regional Economic Report Outlook

Johannesburg - Construction and manufacturing giant Group Five on Thursday announced that its three-year restructuring plan had resulted in strong results for the year to June 2003.

Mike LomasRevenue increased by two percent to R4,1-billion compared with R4,0-billion in 2002, earnings per share increased 26 percent to 140 cents per share and operating profit was up 29 percent to R160,1 millioncompared with R124,6 million in teh previous year.

The strengthening of the rand had a significant impact on the group during the year, particularly in construction, where exchange gains decreased from a R58 million gain to a R2 million loss.

The stronger currency also led to a fall in revenue generated outside South Africa, from 37 percent of group turnover in the previous year to 33 percent this year.

Net finance costs increased from R26,4 million to R28,5 million in the year due to higher average interest rates and increased levels of working capital.

"Our three-year restructuring was focused around building a properly positioned, broad-based portfolio of businesses to offer integrated, top quality solutions across the full infrastructural value chain," said group chief executive Mike Lomas.

"We have achieved this."

"Over the three years, the group reported average compounded revenue growth of 12.7 percent, average compounded operating profit growth of 54.6 percent and average compounded EPS growth of 58.4 percent."

Construction revenue, representing 78 percent of group revenue, remained constant at R3,2 billion, compared to an exceptional improvement of 40 percent in the previous year.

Operating profit decreased from R137 million to R91 million, primarily due to the strengthening of the rand.

Construction operating profit, before the effect of currency translation, showed an 18 percent improvement from the prior year.

Building revenue remained constant, while operating profit, before exchange rate effects, increased from the previous year.

The completion of a number of large contracts and the securing of cross-border work contributed to a strong result for the year.

Poor performance in the roads division was mainly due to a decrease in exchange gains compared to the previous year and to the run-out of problematic contracts.

Lomas said this business unit had been consolidated and downsized and the future looked stronger. 


The deferment of major projects by the resource sector in the latter half of the year following the strengthening of the rand impacted on a strong operational performance in civils. Cross-border opportunities for this business unit appeared promising and were being "strongly evaluated".

Engineering showed strong performance despite delays in finalising the commercial closure of a mining house contract. This adversely affected the operating result and led to higher levels of working capital.

Revenue increased over the year and operating profits before currency effects were in line with the previous year.

Engineering was now well placed to exploit benefits from the significant oil, gas and petrochemical developments planned in southern Africa.

Manufacturing, representing 15 percent of group revenue, showed an increase in revenue of 3.1 percent to R631 million, compared with the 2002 figure of R612 million and an increase in operating profit to R34 million from a R52 million loss previously.

The significant improvement in performance was largely due to the elimination of losses in Everite Building Products, substantial improvements in the results of both Vaal Sanitaryware and DPI Plastics and the downsizing of the AC Pipes operation.

Infrastructural Development Services (IDS) achieved strong results and was well-positioned for continued growth through the further strengthening of the management team. IDS would continue to add value to the overall group through the appropriate financial structuring and delivery of selected projects.

"...Group Five is well positioned to tap into the increase in infrastructure spend announced by government. The group has a healthy construction order book of R3.5-billion. The completed turnaround in manufacturing, coupled with the introduction of new technology, improved productivity and the establishment of empowerment initiatives will further drive local market penetration. The recent development of new products will provide the opportunity to drive the export growth strategy," Lomas added.

"The combination of these factors, together with exciting opportunities throughout the businesses, will allow for meaningful growth of earnings in the year ahead," concluded Lomas.

 

Tuesday, 18 March 2003 02:00

Construction sees good growth

The construction sector is confident that it will again experience good growth this year after a brisk last year that saw the sector expanding by 5.32%.

Construction IndustryGovernment will spend about R50-billion on construction projects over the next three years. This represents real growth of 12% a year for the sector, says Carl Grim, CEO of Aveng, SA's largest construction company.

The federation of civil engineering contractors is equally upbeat, expecting nominal turnover from civil engineering alone to rise from about R16-billion last year to R20-billion this year.

Optimism in the sector stems from the expected decline in inflation and interest rates, together with the recovery of the rand against the major currencies and other factors.

SA's economy is expected to continue expanding at a rate of 3% a year. "This growth would in part be brought about by government expenditure as well as private investment, which will support growth in gross fixed capital formation," says the federation's Pierre Blaauw.

"Prudent finances have culminated in a declining budget deficit which, coupled with government's focus on infrastructure development, holds great promise for the civil industry," Blaauw says.

Federation members were encouraged by increased tender activity in the latter part of last year. However, Blaauw says underspending due to institutional capacity problems is still preventing the full benefit of rising government capital expenditure from trickling down to the industry.

The industry is planning a summit at which some of these issues will be discussed. Meanwhile, some construction analysts have said that SA's rate of capital expenditure is still not high enough to catch up on the country's R170-billion social and economic infrastructure backlog.

 

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