Macmahon Holdings today announced a record after tax profit of $11.7 million for the half year ended 31 December 2005, an increase of 107 per cent on the (AIFRS adjusted) result for the same period in 2004.
Macmahon Holdings Ltd today announced a record after tax profit of $11.7 million for the half year ended 31 December 2005, an increase of 107 per cent on the (AIFRS adjusted) result for the same period in 2004.
The specialist mining and engineering contractor's stock closed 1.4 per cent up for the day on 71 cents per share.
Macmahon generated $406 million in total revenue for the half, which was an increase of 45 per cent on the December 2004 figure.
With existing contracts Macmahon already has $392 million of revenue booked for second half of the 2006 financial year and revenue for the full year is expected to be in the vicinity of $850 million - up from $641 million last year.
Not surprisingly the mining division accounted for a signficant amount of the business, with revenues of $207 million and continued growth in revenue from open cut and underground projects.
A highlight is the four year $250 million BHP Billiton Orebody 18 project with is due to commence next month. Macmahon is also the preferred tenderer for BHP Billiton's Jimblebar iron mine project.
The company also experienced increased profitability from its contruction division, with five new contract awarded in the half and a high level of tendering in Western Australia and Queensland.
All construction contracts operated profitably.
Macmahon's workforce grew to 2,550 and it is aware that it will need to increase staff numbers over the coming 12 months if it is to secure more new work. In particular the company has identified a shortage of engineers and mechanical trades people.
Macmahon chief executive Nick Bowen said the increase in revenue was the result of the buoyant resources and infrastructure sectors, the new contracts Macmahon had won and the hard work the company had done in response to increased activity across all divisions.
"We have won around $700 million of new contracts or extensions to existing contracts and the order book at year end was $1.12 billion, which is the strongest it has been in the history of the company," he said.
"The $56 million equity raising in late 2005, together with the new corporate banking facility of $120 million and our increased finance leasing capacity, has ensured we are in a very strong position to fund future growth.
"The combination of the existing contracts and a positive outlook for new work is expected to deliver further revenue and profit growth in the 2007 financial year.
"This is a good result from all perspectives but, we will continue to make improvements to our business to ensure that we will do even better."
Earnings before Interest and Tax increased to $20.5 million from the $11.2 million in December 2004.
With the strong improvement in profitability and the positive outlook, the Directors have declared an interim, fully franked, dividend of 0.5 cent per share.
