Matrix on track to beat FY forecasts

Recently listed Matrix Composites and Engineering says its on track to exceed its prospectus full-year forecasts, today booking an interim profit turnaround to $7.4 million.

The Malaga-based specialised engineering product manufacturer is forecasting a full-year net profit of $7.6 million for the 2010 financial year.

Today's interim net profit result to a net loss of $1.8 million for the previous corresponding period.

Revenue surged 113.7 per cent to $43.5 million. Operating margins improved significantly with earnings befire interest, tax, depreciation and amortisation rising strongly to $12.1 million.

The key drivers of improved margins were effective hedging policies and lower input costs.

Earnings per share were 14.2 cents and the directors have declared an interim dividend of two cents per share, fully franked.

Matrix chief executive Aaron Begley said the result reflected the strong performance across the company's key divisions.

"We are on track to significantly exceed prospectus NPAT forecasts, based on substantial improvements to expected margins although we expect full year revenue may be slightly softer than prospectus forecasts," he said.

"With strong cash flows and a conservative balance sheet Matrix is extremely well positioned to embark upon growth initiatives such as the Henderson facility and product developments.

Henderson will be Matrix's new manufacturing facility strategically located in the Australian Marine Complex.

"We expect these initiatives will lead to strong revenue growth in 2H10 and beyond.

"Henderson facility stage 1 construction is on track for completion in Q3 2010 and we are looking forward to the significant revenue and margin improvement that this facility will deliver.

"The Henderson facility will increase efficiencies, reduce costs and allow us to work through the $200m order backlog that we are currently experiencing.

"We continue to grow our order book securing more than $30 million in new contracts during the half, from a range of customers in Europe and the United States.

"We are particularly pleased with a number of new product developments that will increase our exposure to the offshore LNG industry, in particular the Gorgon, Browse and Pluto projects off Western Australia.

"We expect these products will come online next financial year and will be a significant contributor to future revenue growth.

"These product developments highlight Matrix's ability to design highly specialised engineering products to meet the ever changing needs of our customers.

"We are particularly proud of our performance since our recent IPO and are confident in delivering a strong second half for our shareholders."