Group Five has updated its restructuring process, which was highlighted to the market as a priority short-term management focus area in February 2017.

Group Five acting CEO, Themba Mosai, has implemented changes since his appointment at the beginning of March 2017. These changes are aimed at unlocking shareholder value and addressing mainly the loss-making engineering and construction cluster. The board and executive management are aligned on this approach.

As part of this business turnaround process led and implemented by management, with support from independent consultant Deloitte Consulting, the Group Five engineering and construction cluster has now been split into construction: South Africa, construction: rest of Africa and engineer, procure and construct (EPC) sector businesses.

These changes will result in more focused businesses with appropriate resources and cost bases relevant to the regions and service offerings provided.

This process led to the implementation of voluntary and forced retrenchments that are set to conclude at the end of June. The main objective of these changes is to right size Group Five in line with the current market conditions.

As communicated with the H1, F2017 interim results release, the financial impact of these retrenchments was not included in the market guidance provided as these could not be quantified at the time.

The impact of the retrenchments will be included within the H2, F2017 results.

Revised engineering and construction structure

The South African and rest of Africa construction businesses will be led by the executive director of construction, Mark Humphreys, who has been with the group for 29 years. He has fulfilled the role of COO for the engineering and construction cluster for the last two years.

Engineer, procure and construct sector

Peter de Vries, who has been with the group for 11 years and has significance experience in EPC contracting, will lead the EPC sector-driven business. He will report directly to the acting CEO. This business will focus on infrastructure, energy, plant and process and smart cities and town development, all areas the group has significant experience in.

Investments and concessions and manufacturing

The group will continue to support and grow its annuity and cash-generating clusters of investments and concessions and manufacturing. The strategic equity partnership with Aberdeen Infrastructure Funds, currently being implemented in the investments and concessions cluster – announced on 5 December 2016, is progressing well with only a number of outstanding regulatory conditions to be met.

CEO appointment

The board process of appointing a permanent CEO is well underway. The board of Group Five continues to support the acting CEO in the implementation of the required changes in the group and wishes management well.