New boss hopes to build a future on the lessons of the past
THE recent ructions at Group Five which saw chief executive Theunis Kotzee resign and the rapid-fire appointment of his successor appear to have strengthened the resolve of the executive management team.
"The resignation of Mr Kotzee was an uncomfortable period for the group, a very sad time, but we had to get the business back on track as soon as we could," says new chief executive Mike Lomas.
Kotzee resigned from the group last month after policy differences with the board. His resignation caused a minor run on the shares with a recovery taking place only now.
Using a "thorough, professional and structured process", Lomas, formerly managing director of the group's engineering division, was unanimously elected by the board.
"It was an interesting period and it all happened in a few days. What it did, though, was to bring the team closer together and create a greater commitment to making the company work," says Lomas.
A cheerful and surprisingly relaxed Lomas has no immediate plans to make major changes to strategy, although he will be on the look-out for alliances or joint ventures with overseas groups.
"We have had several discussions with overseas companies and are following these up vigorously," he says.
Although the group is looking offshore to bring in technical skills, it will do this carefully.
"There are many lessons to be learned from our competitors, but we hope to have achieved something within the next one to two years," he says. "Africa is also opening up to us and the aim is to increase work in these areas to about 20% of the total within the next 18 months."
The lack of skills throughout the construction industry is worrying, he says, and a great deal will be done to train and develop employees. Efforts will also be made to increase productivity.
Referring to the various divisions within the group, Lomas says that Everite, which was acquired in 1992, is now performing well. "The acquisition has done us both a lot of good. Group Five learned a lot about systems and other business principles and we will take this opportunity to increase the manufacturing base," says Davison.
The property division has been disappointing, particularly the residential side, and this will affect the building division in the current financial year to end-June. The increase in interest rates last year and the increase in the number of people in this market has taken its toll.
"We will probably be downscaling this operation or might look at niche markets or perhaps even concentrate more on commercial properties."
The building division, however, is bullish for the next financial year. The road and earthworks sector is performing exceptionally well and has good order books which will last well into next year, while civils is achieving good results both in and outside South Africa. Prospects for 1998 are promising and new opportunities are opening up, says Lomas.
"The company has a strong balance sheet which is something we committed ourselves to many years ago, having learned our lessons earlier. This gives us the chance to look at opportunities when they arrive," he says.
With the financial year-end only weeks away, Lomas will not be drawn on forecasts, save to say that income will be much the same as last year.
Lomas adopts an open managerial policy and enjoys the dynamics of team work. "Our executive team is something of a brains trust, so everybody participates. I like to pass on things I have learnt and share these with other people," he says.
Lomas is fully capable of doing just this. He has an honours degree in civil and structural engineering from the University of Bradford as well as an honours degree in water utilisation from the University of Pretoria. He also attended a construction management programme and an executive programme at the Graduate School of Business at Stanford University.
Lomas is married to Lydia and has a daughter and son, both studying at Pretoria University.