28/05/2013 - 09:56

Diploma expects big lift in full-year profit

28/05/2013 - 09:56

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Diploma expects big lift in full-year profit
Diploma Group chief executive Nick Di Latte.

Diploma Group shares have risen on the ASX today after the company said its efforts to restructure its operations would result in a significant lift in profit for the 2013 financial year

Diploma told the ASX it expected its pre-tax profit for FY2013 to come in between $2 million and $3 million, on the back of revenue of $150 million.

The construction and development group lodged a net profit of $561,000 for the six months ended December 31, while last year's full-year result was a net loss of $15.5 million. 

Before tax adjustments, the FY2012 loss was $21.5 million. 

Diploma launched a strategic review of its operations in August last year, in the wake of the loss.

Chief executive Nick Di Latte said today's forecast reflected the success of the second phase of that plan.

"We have also consolidated our capability in property development services," Mr Di Latte said in a statement.

"The timing now appears to right to move forward with a number of these projects given present favourable market conditions in Western Australia."

The FY2013 result will include a $2.2 million loss on the Zenith apartment tower and the sale of an undeveloped site in Midland, Diploma said.

At 9:51am, Diploma Group shares were up 1.1 cents, or 37.9 per cent, at 4 cents.

Mr Di Latte said the company had a construction order book of around $242 million, while negotiations are continuing regarding a further $225 million worth of works for the next nine to 12 months.

Diploma has more than $137 million in projects under construction from contracts secured in FY2013, as well as the $49 million design and construct contract for Rio Tinto's Wickham accommodation village in the Pilbara.

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