Macmahon raises guidance for FY21

Contractor Macmahon Holdings has upgraded its earnings guidance for the current financial year after reporting a rise in revenue to $1.38 billion.

Macmahon’s revenue had grown by 25 per cent in the 12 months to June 30, with the company now targeting between $1.4 billion and $1.5 billion in revenue for the current financial year.

That compares to its previous guidance of $1.15-1.2 billion.

Managing director Michael Finnegan said the updated guidance was supported by more than $1.2 billion in contracted work for FY21. Macmahon's total work in hand stands at $4.5 billion.

“Notwithstanding the current macro-economic environment, the business continues to perform well,” Mr Finnegan said.

“It is very pleasing to achieve these results, given the additional challenges and uncertainty generated by COVID-19.

“However, we are not taking our fortunate position for granted and continue to take precautionary measures across our business to protect our workforce and other stakeholders, and safeguard business continuity.”

Macmahon reported underlying earnings of $238.7 million in FY20, up 32 per cent on FY19, resulting in a statutory net profit after tax (NPAT) of $64.9 million (up 41 per cent).

“FY20 has been another successful period for Macmahon and marks the third consecutive year we have grown the business and delivered on our earnings guidance,” Mr Finnegan said.

“We made further progress on our strategy to expand our underground business by completing the acquisition of [contractor] GBF, and also resolved the Telfer dispute.”

Macmahon purchased fellow Perth Airport-based GBF Group for $48 million in August 2019.

The contractor settled its long-running dispute with Newcrest Mining in November, with both companies reaching an agreement on increased rates for Macmahon’s work at the Telfer goldmine in the Pilbara.

Mr Finnegan said Macmahon had a positive outlook for FY21, with the business to focus on its contracted work in hand and further opportunities.

He said Macmahon currently had a tender pipeline of more than $7.5 billion.

Its shares closed up 1.8 per cent to trade at 28 cents each.