02/03/2009 - 10:02

Coote posts 70% fall in half-year profit

02/03/2009 - 10:02

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Coote Industrial says it is still waiting on a $75 million payment from the sale of locomotives and wagons as it posts a 70 per cent fall in its first half net profit.

Coote Industrial says it is still waiting on a $75 million payment from the sale of locomotives and wagons as it posts a 70 per cent fall in its first half net profit.

Last June, Coote sold 42 locomotives and 54 wagons to private company Greentrains for $82.7 million, which has been reduced to some $75 million.

In its interim report, Coote said Greentrains had advised it is continuing towards finalisation of debt funding and that additional working capital is being concluded in order to facilitate a planned ASX listing.

Coote said today that completion of the transaction remains a key strategy for the company as it prevents its from progressing a number of key growth objectives.

"Two of the significant key objectives are the closer binding of Gemco's distributor relationship with Caterpillar Inc subsidiary Progress Rail, and the finalisation of joint venture relationships with a US Fortune 500 listed company," Coote said.

Additionally, Coote reported a net profit of $2.2 million, down from $7.3 million achieved in the previous corresponding period.

Revenue increased by 20 per cent to $173 million while earnings before interest, tax, depreciation and amortisation was stable at $16.2 million, which included a $3 million foreign exchange loss.

Coote said it is looking to divest some of its businesses in order to focus on the company's core operation of technical sales and services.

The directors have decided not to pay a dividend, saying it intended to preserve cash until the Greentrains transaction is completed.

Looking forward, the company expects to achieve a full year profit after tax within 15 per cent of the previous corresponding periods.

Shares in Coote dipped 0.5 cents to 15c at 12:12 AEDT.

 


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