Construction services outfit Global Construction Services has increased profits by more than 10 per cent for the year to June 30, climbing above $10 million despite a softening construction market especially in the residential segment.
Construction services outfit Global Construction Services has increased profits by more than 10 per cent for the year to June 30, climbing above $10 million despite a softening construction market especially in the residential segment.
The profit increase was achieved on revenue of $85.6 million (up 22.2%) and EBITDA was $23.2 million, (up 19.6%).
Full announcement below:
GCS DELIVERS 10.6% INCREASE IN PROFIT, POSITIVE OUTLOOK FOR FY10
Highlights
- Group revenue of $85.6 million, up 22.2%
- Net profit of $10.8 million, up 10.6%
- EBITDA of $23.2 million, up 19.6%
- Earnings per share of 15.2 cents
- Total dividend for the year of 6.5 cents per share
- Solid performance in challenging market conditions
- Strong pipeline of opportunities in commercial and industrial divisions
Construction services group Global Construction Services Limited (ASX: GCS,"GCS Group") today announced a net profit after tax of $10.8 million for the 12 months to 30 June 2009, a 10.6% increase on the previous corresponding period.
The profit increase was achieved on revenue of $85.6 million (up 22.2%) and EBITDA was $23.2 million, (up 19.6%).
Earnings per share is 15.2 cents and the Directors have declared a fully franked second half dividend of 3.5 cents bringing the dividends declared for the financial year to 6.5 cents per share, fully franked.
GCS Group Managing Director Enzo Gullotti said the positive result was achieved despite challenging conditions in some segments of the construction services market.
"We are pleased with this result and the company's ability to grow revenue and earnings," said Mr Gullotti.
"Conditions in some of our markets were softer in the second half of the year, particularly in the residential segment of the market.
"We have also had some delayed starts to contracts secured by the commercial division which has impacted earnings in the 2009 financial year.
"It is a testament to our diversified business model that we have been able to withstand these conditions and deliver a positive FY09 result," he said.
GCS's commercial division performed strongly during the year with continued success in securing significant new contracts.
One major project secured during the year was a $24 million formwork and concrete installation contract at Brookfield Multiplex's City Square Project in the Perth CBD.
In June, the division commenced work on Stage 2 of the Claremont Quarter redevelopment for Brookfield Multiplex which is valued at $18 million and expected to be completed over 15 months.
Mr Gullotti said the City Square contract demonstrated the company's ability to secure repeat work from its existing customer base.
"Brookfield Multiplex is a long standing customer of our commercial division, CASC Constructions," said Mr Gullotti. "We see these strong customer relationships as a significant advantage in the current market."
The company's Resources & Industrial Services Division also performed well with GCS Northwest now well established in the Pilbara region.
During the year, GCS completed a Placement and a Share Purchase Plan (SPP) at 40 cents per share raising gross proceeds of $5.9 million.
Funds raised from both capital raisings were used for working capital and to strengthen the Company's balance sheet.
"We continue to see a strong pipeline of opportunities in the commercial sector of the market and expect to secure new contracts in the coming year," he said.
"In addition, we are confident with the outlook for the Resources & Industrial Services Division given the large number of resources projects proposed in the Pilbara region.
"Conditions in the residential sector are expected to remain challenging in the year ahead however we are confident in our ability to withstand these conditions and deliver a good result in FY10."
Mr Gullotti said the company continued to evaluate new growth opportunities as they arise.
We are committed to growing GCS and continue to review both organic and acquisitive growth opportunities that have the ability to provide us with access to new industry sectors and geographical markets.
"However, we have a very conservative approach to acquisitions and apply strict filters to any opportunities we pursue."
