Perth-based construction group Global Construction Services has bought a 50 per cent stake in Melbourne scaffolding firm SmartScaff, a day after lodging a $19.4 million net profit for the year to June 30, an increase of 70 per cent on the previous year.
GCS said the investment, for which it will pay $3.5 million, would give it an immediate platform to expand onto the east coast.
GCS will also nominate two directors for the SmartScaff board.
‘Significant synergies and alignment between GCS and SmartScaff are apparent in this transaction,” GCS managing director Enzo Gullotti said.
“SmartScaff is a perfect partner which springboards BCS onto the eastern seaboard with immediate scale and experienced management.”
The acquisition comes a day after GCS released its financial year 2010-11 results, where it experienced an increase of 70 per cent in net profit to $19.4 million on revenues of $146.5 million.
Earnings per share was 20.8 cents and GCS paid a fully franked dividend of 8.25 cents per share.
Mr Gullotti said the result was driven by strong performances by a number of divisions, and the achievement of key milestones on major projects, including the massive Department of Health Fiona Stanley Hospital development.
“In FY11 we have invested in expanding our geographical footprint in the northwest and Mid West regions of Western Australia, coupled with a significant capital expenditure program to expand our product offering,” Mr Gullotti said.
“The platform has now been firmly established to steer the GCS group to take advantage of the significant growth opportunities in our key markets.”
Mr Gullotti also said increased contributions from the company’s equipment hire operations and strong demand of temporary site units played a major role in underpinning the results.
“The addition of key executives in FY11 will further enable GCS to continue to grow and explore new opportunities that will drive shareholder value and strategically fit and complement the group.”
At close of trade today GCS shares were steady at $1.35.
