ENP Newswire - 27 February 2014
Release date- 26022014 - Leading national construction and mining services group Watpac Limited has today announced an after tax profit of $7.382 million for the half year ended 31 December 2013, representing a significant increase on the previous corresponding period.
Key highlights include:
Net profit before tax of $10.225 million.
Increased cash position, with $155.6 million in cash and term deposits at balance date.
Reinstatement of dividend - interim fully franked dividend of 2.5 cents per share declared.
Aggregate work in hand of $1.8 billion as at 31 December 2013.
Core businesses of Construction, National Mining and WA Civil performing well.
Watpac Chair Chris Freeman said the result is at the higher end of previous guidance and is attributed to the successful reduction of overhead costs across the business, no impairment charges on the Group's property development inventory and land and building assets, and the continued performance of the National Mining and WA Civil business.
'Two years ago the Board committed Watpac to a capital management strategy designed to drive operational efficiencies, improve Watpac's profitability and deliver sustainable shareholder value,' Mr Freeman said. 'The Group's solid half year financial performance is a significant step towards this goal. 'In addition to reporting an after tax profit of $7.4 million, we have increased our cash position, strengthened our balance sheet and maintained a healthy national work in hand position of $1.8 billion as at 31 December 2013.
'Pleasingly, the Group is now also in a position to reinstate dividend payments and a fully franked interim dividend of 2.5 cents per share will be distributed to shareholders on 21 March 2014.'
The Board has also reinstated the Group's Dividend Reinvestment Plan.
Mr Freeman said that while work volumes in the national construction sector remained constrained during the reporting period, Watpac maintained its margins and competitive edge to deliver a profitable result for the Group. 'Watpac's core businesses, which include the Group's national contracting and mining operations, and civil operations in Western Australia, continue to perform profitably,' he said. 'Although market conditions remain challenging, the Directors are confident the Group will further improve its financial performance during the second half of FY14.' Mr Freeman said the Board remained committed to divesting the Group's portfolio of property assets to further improve Watpac's financial position.
'The Group's focus on capital management will continue in the year ahead as the Board and senior management roll out strategies to utilise capital to maximum benefit and position Watpac's core businesses to deliver long-term, sustainable value to shareholders,' he said. Watpac Chief Executive Officer Martin Monro said Watpac is well placed to capitalise on new opportunities and will remain prudent in the execution of its growth strategy.
'Following an extensive period of strategic reform, Watpac has returned to profitability in FY14,' Mr Monro said. 'During the first half of the financial year Watpac's national Construction business secured almost $1 billion in new projects. 'This program of work brings us back to a sensible utilisation of our capacity, however we have significant room to expand our current portfolio of projects and are actively monitoring the market for new opportunities.'
Mr Monro said Watpac has a clear strategy for FY14 and will continue to implement it accordingly. 'At an operational level, our efforts remain firmly focused on safety, excellence and enhancing our competitive positioning to create long-term, sustainable shareholder value,' he said. Established in 1983, Watpac is a listed national construction, mining services and property development group with operations in all mainland States and Territories. In FY14 Watpac is focused on the delivery of more than $1.8 billion work in hand across the company's businesses.
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