RCR positive despite weak market

RCR Tomlinson has lifted its annual dividend after delivering solid results in a weak market, with the engineering and construction contractor posting a net profit of $39.1 million for the financial year. 

The Perth-based engineering firm announced a 13.1 per cent fall in revenue to $1.13 billion, with profit down 9.7 per cent on its result last year.

However, the board declared a final dividend of 7.5 cents per share (20 per cent franked) to bring the total year payout to 11 cents – 10 per cent better than last year’s payout.

RCR also reduced its debt down to $12.2 million, with $288 million in available liquidity.

“We have delivered another strong performance by improving profitability across the entire company through overhead reduction, strong cost control and productivity improvements which we can pass on to our clients by lowering their costs,” managing director Paul Dalgleish said.

“The record forward order book supplemented with the guaranteed work from our recent success from the Water Corporation provides a substantial base of over $1.03 billion positioning for another year of growth for RCR.”

He said the company was confident that its current strategic position would deliver benefits in the coming years.

The company said during the year it had significantly increased its activity in the oil and gas, rail, transport, and power generation sectors in Australia, New Zealand and south east Asia.

RCR’s resources division generated $315.3 million in revenue, while its energy division brought in $161.8 million.

That was dwarfed by its infrastructure division, which brought in a bulk $688.6 million in revenue.

“To support our ongoing drive into Asia, we have expanded our engineering capabilities and capacity at our south east Asian central hub in Kuala Lumpur,” it said.

“We are well positioned to deliver sustainable earnings growth through existing business and by acquisition.”

RCR’s result comes less than a week after it announced it had negotiated a $10.4 million purchase of Water Corp’s engineering and construction services business, which includes $130 million in guaranteed work over the next three years.

Shares in RCR were 2.3 per cent higher to $1.74 each at 11am.