07/02/2018 - 13:05

CIMIC soars on dividend lift, new forecast

07/02/2018 - 13:05

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CIMIC Group's shares have soared after the construction giant raised its dividend by 13 cents on the back of a 21 per cent lift in full-year profit and forecast a rise in profit in the year ahead.

Cimic subsidiary CPB Contractors secured a $47.9 million contract in November last year.

CIMIC Group's shares have soared after the construction giant raised its dividend by 13 cents on the back of a 21 per cent lift in full-year profit and forecast a rise in profit in the year ahead.

Net profit for the 12 months to December 31 was $702.1 million, an increase on the previous year's $580.3 million and just above the top of its target range.

The company said revenue - excluding joint ventures and associates - also rose, up 24 per cent at $13.4 billion, driven by a solid contributions from all core businesses.

Cimic subsidiary CPB Contractors secured a $47.9 million contract in November last year for the New Lord St project at Ellenbrook.

Executive chairman Marcelino Fernandez Verdes said Cimic had finished the year well positioned for future growth opportunities, including public-private partnerships, and had sustained shareholder returns.

He said the company's strong performance had enabled the board to declare a fully franked final dividend of 75 cents per share, up from 62 cents a year ago.

"This represents a full-year payout ration of 62.3 per cent of net profit after tax," Mr Fernandez Verdes said.

The results sent Cimic shares up 4 per cent to $46.67 by 1324 AEDT on Wednesday.

The company secured new work of $18.4 billion during 2017, bringing its work in hand to $36 billion, $2 billion higher than the prior corresponding period.

Mr Fernandez Verdes said the company had an extensive pipeline of new work opportunities ahead with about $110 billion worth of tenders relevant to Cimic Group to be bid or awarded in 2018, and about $285 billion of projects coming to the market in 2019 and beyond - including about $65 billion worth of public-private partnership projects.

"Our focus is to continue to develop our safety and performance culture, further develop our presence in the public private partnership market and deliver additional client value through collaboration opportunities amongst our companies," he said.

The company also lifted its 2018 net profit guidance range to between $720 million and $780 million, an increase of 3 per cent to 11 per cent on the 2017 financial year, subject to market conditions.

Cimic said it had secured an extension at the Solomon Hub mine in Western Australia and a contract at Gunung Bara Utama mine in East Kalimantan.

CIMIC LIFTS DIVDEND ON PROFIT GROWTH:

* Net profit up 21pct to $702.1m

* Revenue up 24pct to $13.4b

* Fully franked dividend of 75cps, up 13 cents

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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