Picture: THINKSTOCK
Picture: THINKSTOCK

The share price of listed construction firm Stefanutti Stocks fell as much as 28% on Tuesday, its worst loss since its listing in August 2007. This brought the company’s year-to-date loss to almost 90%.

Stefanutti’s liquidity is taking strain because of a lack of infrastructure spending in SA and slow payments by clients, with the company reporting in May that by the end of February its current liabilities exceeded current assets by R301m.

Stefanutti closed at 36c on Thursday, having now lost 98.6% since its record high of R27.49, reached in November 2007. The JSE’s construction and building materials index has fallen 10.64% so far in 2019 to a 16-year low, compared with a 10.57% rise in the all share.

The company has said it has a long-term funding plan that could entail issuing new shares, after its R111m loss in the year to end-February.

Stefanutti operates throughout SA, Sub-Saharan Africa and the United Arab Emirates and it is one of several JSE-listed property counters to be battered by poor domestic conditions. 

Group Five, which was put into business rescue earlier in 2019 after lenders pulled the plug on the struggling construction company, said on Tuesday that chair Nonyameko Mandindi has resigned along with three other nonexecutive directors.

Conditions in the second quarter of 2019 improved a little, with the FNB/BER civil construction index gaining one point in the second quarter of 2019, following the record low of 10 registered in quarter one of 2019, FNB said on Tuesday.

The data indicated that close to 90% of managers in the sector are dissatisfied with conditions.

The index showed that the slowdown in the sector was likely to intensify, said FNB property economist Siphamandla Mkhwanazi.

“The performance of the sector over the next few months will be determined by how the current fiscal constraints are addressed, and whether or not this leaves room for increased public infrastructure spending,” Mkhwanazi said. “For now, the sense is that the scope for this is limited.” 

gernetzkyk@businesslive.co.za