28/02/2008 - 12:11

PearlStreet net profit down 27%

28/02/2008 - 12:11

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Perth-based asset management firm PearlStreet Ltd has reported a net profit after tax of $821,000 from ordinary activities for the half year ended December 2007, down 26.9 per cent on the 2006 corresponding period result.

PearlStreet net profit down 27%

Perth-based asset management firm PearlStreet Ltd has reported a net profit after tax of $821,000 from ordinary activities for the half year ended December 2007, down 26.9 per cent on the 2006 corresponding period result.

PearlStreet said the result was impacted by post acquisition integration and redundancy expenses of $550,000 and the amortisation of customer related intangibles of $491,000.

Adjusted net profit after tax was $1.4 million for the period, a 31 per cent increase over the previous half-year.

Revenue growth of 121 per cent to $40.6 million over the period was dominated by the maiden contributions of the newly acquired Metlabs/ITS, Australian NDT and Accura businesses.

PearlStreet said the continuing asset management and engineering services and asset integrity businesses continued to experience solid demand and posted 7.6 per cent revenue growth over the previous corresponding period.

The PearlStreet directors have declared an interim dividend of 0.6 cents per share payable on April 3, 2008.

The statutory EBITDA result of $4.2 million represents a 10.3 per cent EBITDA margin and a 64.8 per cent increase on the prior corresponding period.

After adjusting for post acquisition integration expenses, the EBITDA margin rises to 11.7 per cent.

Whilst the integration of the acquisitions is 85 per cent complete, PearlStreet said it remained committed to realising additional synergies flowing to the group from the acquisitions announced in the first half of FY2008.

The directors expect the benefits will flow to the group toward the end of FY2008 and the beginning of FY2009.

PearlStreet managing director and chief executive Anthony Wooles said it was pleased with the performance of its largest acquisition, Metlabs/ITS, which had performed ahead of its pre-acquisition expectations.

"We are beginning to see significant operational benefits for our major customers from increased mobilisation flexibility on the Eastern Seaboard, particularly in seasonal shut down work. This is a major structural change in the asset integrity services market," he said.

"The Accura acquisition is performing in line with expectations and the ANDT acquisition has given PearlStreet the dominant market position in the Victorian Latrobe Valley power sector. We continue to work on performance improvement in ANDT's Melbourne metropolitan market and recent management changes should accelerate this process."

Mr Wooles said its recent appointment of chief operating officer, Kristen Walsh, who has overseen the integration project for all three acquisitions, now provided a "whole of company" approach across a national footprint.

"Our growth strategy remains on-track, although we remain watchful with respect to broader developments in capital markets."

PearlStreet shares closed 7 cents, or 11.86 per cent, lower to 52 cents each today.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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