Matrix announced $18.3m FY10 profit

Matrix Composites & Engineering has announced it has recorded an $18.2 million net profit after tax for the 2010 financial year.

This a 139 per cent increase on its prospectus forecast of $7.6 million.

In a statement Matrix said its revenue for the period grew $48.3 million to $102.6 million, representing an 89 per cent increase on the prior corresponding period due to strong organic growth and increased production capacity at the company's Malaga plants.

The company had $13.6 million in cash at June 30.

The company's director expect to pay an interim dividend of 2 cents per share, and a final dividend of 2 cents per share, both fully franked by the end of October.

Matrix's chief executive officer Aaron Begley said he was pleased to deliver such strong profit growth to shareholders in the company's maiden full year result.

"Matrix has delivered strong revenue and profit growth in its first full year as a listed company and we have established a platform to drive further growth in FY11 and beyond," Mr Begley said.

"Matrix is pioneering new products using composite materials, syntactic foam and subsea polymer chemistry and expects to launch several new products in FY11 including Subsea, Umbilical, Riser & Flowline "SURF" ancillary products, Downhole products and specialised high performance insulation products for the LNG processing industry. "

See full company statement below:

Matrix Composites & Engineering Limited (ASX: MCE) (Matrix) is pleased to announce it has delivered a record full year profit for the year ended 30 June 2010, beating prospectus profit forecasts by $10.6 million or 139%. The profit represents a 17.7% return on sales.

Revenue for the period grew $48.3 million to $102.6 million, representing an increase of 89% on the prior corresponding period due to strong organic growth and increased production capacity at the Company's Malaga plant.
EBITDA for the full year was $28.1 million exceeding prospectus forecasts of $13.7 million by 105%.

The EBITDA margin increased from 10.2% in FY09 to 27.3% in FY10 due to improved operating efficiencies, reduced costs of raw materials, an effective currency hedging policy and a shift towards new higher margin products.
Weighted earnings per share amounted to 31.0 cents (FY09: 6.3 cents) and Directors approved the payment of an interim dividend of 2.0 cents per share, and a final dividend of 2.0 cents per share, both fully franked. (FY09: 2.0 cents total). The final dividend of 2.0 cents per share will be paid on 28 October 2010.

Matrix has a strong cash position, with cash flows of $26.3 million from operations representing a 199% increase on prior corresponding period. The Company has $13.6 million in cash at 30 June 2010.

The Composite Materials division delivered strong growth due to margin improvement, new product development and favourable market fundamentals in the offshore oil & gas industry. This trend is expected to continue in FY11, with an increase in new product development following the commissioning of Henderson Stage 1 development.

The Heavy Engineering division also performed strongly, despite difficult operating conditions. This performance can be attributed towards the specialised nature of the business.

Matrix expects operating conditions to continue to improve in FY 11 and beyond and is confident it will continue to deliver strong profit growth.

The Company has an order book of $188 million which will underpin revenue for FY11.

Matrix's Chief Executive Officer Aaron Begley was very pleased to deliver such strong profit growth to shareholders in the Company's maiden full year result.

" Matrix has delivered strong revenue and profit growth in its first full year as a listed company and we have established a platform to drive further growth in FY11 and beyond," Mr Begley said.

" The Composite Materials division continues to benefit from buoyant operating conditions which are expected to continue well into the future, underpinned by a shift towards deep water oil & gas exploration, drilling and production. "

" The oil & gas industry continues to grow, requiring new and innovative technologies and products - Matrix is uniquely positioned with the technology and capability to respond to these needs. "
" New product development continues to drive sales growth as it opens up new markets and allows Matrix to focus on high margin product segments. "

" Matrix is pioneering new products using composite materials, syntactic foam and subsea polymer chemistry and expects to launch several new products in FY11 including Subsea, Umbilical, Riser & Flowline "SURF" ancillary products, Downhole products and specialised high performance insulation products for the LNG processing industry. "

Mr Begley said that the Henderson development is an exciting milestone for Matrix as it will increase production capacity and apply state of the art automotive, chemical processing and aerospace production at a level and degree of sophistication never before seen in the industry, cementing the company as a global leader in its field.

" This facility will solidify our position as a major, critical supplier to the offshore oil & gas sector, drive strong production increases and provide a platform for future growth. "

" Construction on Henderson Stage 1 has commenced and we expect to commence commissioning trials in October 2010 with full commissioning expected in December 2010. "