Diversified Decmil lifts full-year profit

Engineering and construction contractor Decmil Group says its evolution into civil construction projects has helped drive a 10 per cent lift in net profit, while flagging further earnings growth through its new capabilities.

Decmil today said its revenue for FY2013-14 was up 17 per cent to $617.7 million, driving the 10 per cent lift in net profit to $49.7 million.

The company will pay a final dividend of 8.5 cents per share, while it also paid down all its debts over the financial year.

Chief executive Scott Criddle said the result was underpinned by key contracts with the Department of Immigration and Border Protection, Atlas Iron, Shell, Roy Hill Holdings, Rio Tinto and Chevron.

Mr Criddle said new contracts for civil works such as roads and bridges, new areas of work for Decmil, also contributed to the profit lift, as did a strong financial performance by its Homeground accommodation village in Gladstone, Queensland.

The company began diversifying its operations two years ago, through a series of acquisitions and upgrades of in-house capabilities, in response to the widespread slowing down of new construction works in the resources sector.

“Despite a challenging environment for resource sector-related construction, Decmil has delivered another solid financial result,” Mr Criddle said.

“This can be attributed to our strategy of diversifying our revenue sources with government infrastructure, upstream coal seam gas work and broader civil capability now strong features in the business.”

Mr Criddle said the outlook for the next 12 months remained subdued and competitive for construction companies in the resources sector, with margins being slashed.

“However, Decmil has continued to evolve its client base and core capabilities during the financial year, and the company continues to see significant potential in these new areas of business to provide greater sources and diversity of revenue in the coming years,” he said.

At 10:00AM, WST, Decmil’s stock was down 4.07 per cent, trading at $2.12.