Stefanutti rallies as it flags higher operating profit


Stefanutti rallies as it flags higher operating profit

Published Date: 2017-10-19 | Source: Stephen Gunnion | Author: Stephen Gunnion

Stefanutti rallies as it flags higher operating profit

The construction group says a bigger tax payment will affect headline earnings

Shares in Stefanutti Stocks surged yesterday after it flagged an improvement in its operating conditions.

The construction group said it would report a higher operating profit than a year ago. However, it said the rise had been affected by an increase in its effective tax rate. As a result, interim earnings per share and headline earnings per share are expected to be between 10% and 20% lower than last year. Last year, the group reported an operating profit before investment income of R100 million and paid R15 million in tax. For the year to February, however, it reported an attributable loss of R137 million after taking a one-off present value charge of R139 million following a settlement agreement with the government for anti-competitive behaviour and an impairment of R155 million attributable to the goodwill of its subsidiary, Cycad Pipelines.

At the time, Stefanutti said it expected to return to profitability in the current financial year following a difficult period. It said its businesses, particularly those in the building segment were getting back on track. At year-end, its order book stood at R14 billion, including R4.4 billion of work outside of South Africa.

Its shares closed 21% higher at R3.20.

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