Forge on lookout for growth opportunities in FY14

Forge Group has shrugged off tightening conditions in the resources sector and is on the lookout for acquisitions after reporting a net profit jump of nearly 30 per cent on the back of a record revenue performance.

The engineering and mining services contractor said today that its net profit was up to $62.9 million for the year to June 30, up from $49.3 million in the previous 12 months.

Revenue came in at a record $1.1 billion, up from $774 million in 2011-12.

The results came after South African engineering group Murray & Roberts reported overnight that it had booked a $24.2 million profit on the sale of a stake in Forge by Clough, which M&R controls.

Earlier this year, Clough sold its 30.9 million shares in Forge Group for $6.05 per share, to raise $187 million.

Forge managing director David Simpson said the company entered 2013-14 with an order book of more than $1.3 billion.

Mr Simpson said the company’s 2012-13 result was an excellent performance, punctuated by an order book increase of 44 per cent, an expansion into North America and a diversification of its services offering.

“Forge Group’s cash balance of $103.9 million will provide us with the flexibility to pursue growth,” he said.

“We are actively assessing a number of growth opportunities as well as acquisitions that complement our existing operations and make an immediate contribution to earnings.”

Mr Simpson said the company’s confidence was underpinned by its presence in three key markets; resources and infrastructure sectors in Australia, Africa and North America.

Forge Group shares were down 9.5 per cent at 1:00PM, WST, trading at $4.75. 

In May 2010, Clough acquire a 31 per cent shareholding in Forge at $2.10 a share.

Clough also formed a joint venture with Forge to bid on major resources and infrastructure projects in August 2011.