22/08/2013 - 11:09

GR feels the pinch, RCR continues growth

22/08/2013 - 11:09

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RCR Tomlinson and GR Engineering have reported contrasting fortunes in the resources engineering sector, with RCR booking a record profit result and GR’s earnings slipping due to tightening market conditions.

GR Engineering managing director Geoff Jones.

RCR Tomlinson and GR Engineering have reported contrasting fortunes in the resources engineering sector, with RCR booking a record profit result and GR’s earnings slipping due to tightening market conditions.

In a strong performance despite the adverse economic environment, RCR today booked a 37 per cent rise in net profit to $37.3 million for the year to June 30.

Revenue was up 8.2 per cent, to $875.2 million, RCR said, while earnings before interest and tax were up 24 per cent to $43.8 million.

The company will pay a final dividend of 5.75 cents per share, fully franked.

RCR managing director Paul Dalgleish said the company’s strong operational performance was behind the record result.

“The addition of our new business, RCR Infrastructure, through a recent acquisition will provide the opportunity for significant growth in the coming year and beyond through strategic revenue diversification,” Dr Dalgleish said in a statement.

On the other end of the spectrum, GR today reported revenue of $114.7 million for the year to June 30, down from $152.8 million in FY2012.

The drop in revenue led to a $5.4 million fall in GR’s net profit, to $7.5 million, for the year to June 30.

Earnings before interest, depreciation and amortisation (EBITDA) were down to $11 million, from $18.4 million in the previous 12 months.

Nevertheless, the company said it would give part of its FY2013 cash balance of $33.6 million back to shareholders, and pay a final dividend of 3 cents per share.

GR managing director Geoff Jones said the company was hampered by a poor first half in FY2013, as well as adverse market conditions.

“The ability to generate business efficiencies and quickly adjust to a different operating environment has preserved profitability and cash flow generation, albeit at lower levels,” Mr Jones said in a statement.

“We carry no material debt and continue to maintain our balance sheet strength.”

He said the company had responded to the slowdown in expansion spending across the mining services sector by focusing on its efficiency of operations.

Mr Jones said a return to growth would be dependent on sustained increases in commodity prices, reduced operating costs and improved access to capital.

RCR shares were up 5 cents at $2.79, while GR Engineering’s stock had jumped 5 cents to 55 cents, after hitting 64 cents in intra-day trade. 

 

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