19/02/2009 - 10:17

GCS posts 15% lift in half-year profit

19/02/2009 - 10:17

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Global Construction Services says it will take a more conservative approach to acquisitions as it delivers a 15 per cent increase in its interim net profit of $5.4 million.

Global Construction Services says it will take a more conservative approach to acquisitions as it delivers a 15 per cent increase in its interim net profit of $5.4 million.

In its half yearly report released today, the company reported a 56 per cent rise in group revenue to $44.2 million and earnings before interest, tax, depreciation and amortisation rose 30 per cent to $11.9 million.

Managing director Enzo Gullotti said that the half year result demonstrated the strong market position of the group in the WA construction services industry.

"We are very pleased with the Group's performance in the first half of 2009 and over the past 12 months," he said.

"Each of our business divisions performed well during the period thanks to positive conditions in the West Australian construction industry, though market conditions became more difficult towards the end of the period."

The segment result before tax for the group's commercial division reached $6.6 million, up from the previous year's $4.2 million while the result for the new industrial arm was $721,000.

For the residential division, GCS reported a 35 per cent fall from $2.6 million to $1.7 million.

Over the past six months, the company expanded its footprint in the South West with the acquisition of Coastal Hire and also established a presence in the Pilbara region.

GCS also launched a new business division in Perth, operating as GCS Hire, which offers general plant hire and temporary fencing.

Mr Gullotti said the global financial crisis had been slow to reach GCS Group's markets.

"In line with the global economic conditions, we do expect market conditions to soften in the second half," he said.

"There are still exciting opportunities in the pipeline and we are well placed to secure new work in the second half."

"We believe there is potential for further consolidation in the construction services industry, with abundant opportunities currently available," he said.

"However, we will take a very conservative approach to acquisitions and apply strict filters to any opportunities we pursue."

The directors have declared a fully franked interim dividend of three cents per share, down slightly from 3.25c from the previous corresponding period.

At the end of the reporting period, GCS had $2.2 million in cash and cash equivalents.

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