Eric Vemer, CEO of Group Five, has announced that he will be leaving the construction group after the company recorded its first six-month loss in 11 years.
Reports suggest this was due to a R255 million settlement with the South African government.
Vemer joined the company 12 years ago and has been CEO since December 2014. In a statement, he said he is scheduled to leave the group in a few weeks. He was instrumental in helping the company acquire infrastructure investments in Europe and Australia.
“I will move on to new opportunities, but will assist the board during the transition and search for a new CEO,” Vemer said.
Shares take a knock
After the group announced its recent loss, shares in the company fell 2.91 percent to R23.32 per share.
Reports suggested that this was also due to a decreasing number of orders in its main engineering and construction business, as well as a considerable cut to its dividend – the group cut its dividend by 67 percent to 14 cents per share from 42 cents.
Group Five makes 81.2 percent of its group revenue from the engineering and construction division. However, it indicated that revenue in this division fell by 23.4 percent to R4.8 billion.
Sixty-seven percent of its revenue is made in the country. For the six months which ended in December 2016, the group posted a 310 cents per share loss after a profit of 131 cents in 2015.
Committing to skills development
Following the scandal that involved several construction firms colluding during 2013 tender processes, Group Five was one of seven companies that were charged a penalty by antitrust authorities who monitor the sector.
This led to the company committing to the development of skills in the sector and giving black South African workers a bigger role by contributing of R1.5 billion over the next 12 years