GCS increases FY11 forecast to $17.1m

Global Construction Services has announced a 20 per cent increase in the contractor's forecast net profit after tax for the 2011 financial year to $17.1 million.

GCS managing director Enzo Gullotti said the guidance increase is the result of the group achieving substantial rises in year to date revenue and earnings.

GCS said that its 2011 forecast is a 50 per cent increase on the 2010 financial year.

The company previously forecast $14.3 million NPAT for the current financial year.

Mr Gullotti said the increase in forecast earnings had been driven by strong performances across the group's core business units.

He said the company's $79 million contract to provide formwork for the Fiona Stanley Hospital was progressing well.

Mr Gullotti said GCS continues to explore additional growth opportunities in complementary business sectors.

See company statement below:

Construction services group, Global Construction Services Limited (ASX: GCS, "GCS Group") today revised its FY11 profit guidance to $17.1 million, an increase of 20% over its previous forecast of $14.3 million.

Following a strong start to the financial year, GCS is upgrading its forecast for FY11 to a 50% increase over FY10, and will generate a forecast net profit of $17.1 million (previous forecast $14.3m, FY10 result $11.4 million).

GCS Managing Director Enzo Gullotti said the FY11 guidance increase is the result of the group achieving substantial rises in year to date revenue and earnings.

"On current expectations, GCS will deliver net profit after tax of $17.1 million in FY11, an increase of 50% over the FY10 result," said Mr Gullotti.

Mr Gullotti said the increase in forecast earnings has been driven by strong performances across the group's core business units.

The $79 million contract to provide formwork for the West Australian Department of Health's new flagship Fiona Stanley Hospital is progressing well.

"GCS is strongly placed to capture significant new contract revenue in FY11 and the group is currently tendering on a number of major projects and is actively pursuing new opportunities," said Mr Gullotti.

The GCS Group expects to be able to maintain its increased level of earnings in future years on the back of increased activity in civil construction and burgeoning demand for services to support expansion in the Oil & Gas sector.

Mr Gullotti said GCS continues to explore additional growth opportunities in complementary business sectors.

"We will continue to grow GCS, and hope to take greater advantage of the major scale business opportunities that WA has to offer over the coming decade from already committed projects," he
said.

"With our disciplined approach and by applying a strict focus to all aspects of the business, we will build size in the group through organic and acquisitive growth, nationally and internationally.

"We are seeing a significant rise in corporate activity in our sector as major players position themselves to take best advantage of the abundant opportunities in WA, particularly where the businesses are engaged in providing services to the oil & gas and resources industries.

"GCS will play a central role in that activity and will pursue opportunities that drive shareholder value."