01/02/2016 - 14:52

Otoc up on higher earnings

01/02/2016 - 14:52

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Perth-based contractor OTOC expects to post a profitable half-year after diversifying its business to mitigate the impact of the resources sector downturn.

The performance of Otoc's surveying, town planning and urban design division helped mitigate the impact of the resources sector downturn.

Perth-based contractor OTOC expects to post a profitable half-year after diversifying its business to mitigate the impact of the resources sector downturn.

Otoc said it expected to report earnings before interest, tax, depreciation and amortisation of $8 million for the six months to December, up significantly from its $900,000 result in the previous corresponding period, and nearly double what it reported for the full 2015 financial year.

The company holds $10 million in cash and $3.5 million in debt as at December 31.

The full report will be released at the end of the month.

Otoc chief executive Simon Thomas said the strong results provided validation of the dual approach taken by the company of establishing a national professional services business and broadening the focus of its infrastructure division to mitigate the resources sector downturn.

“Our surveying, town planning and urban design division continues to perform well, benefiting from growth in the property and civil infrastructure sectors on the east coast of Australia,” he said.

“Our investments in Victoria, New South Wales and Queensland have ensured solid earnings growth despite soft market conditions in Western Australia.

“We continue to monitor and assess acquisition opportunities to consolidate this highly fragmented sector.

“Otoc’s disciplined approach to project execution and evaluation, ongoing civil infrastructure work at Nauru Island and reduced cost base has resulted in a marked improvement in EBITDA and provides confidence for the remainder of FY16.”

Otoc shares closed 23.3 per cent higher to 18.5 cents each.

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