RCR Tomlinson lifts profit, makes $43m purchase

Engineering services firm RCR Tomlinson Ltd, which today reported a modest increase in net profit, has reached an agreement to make its sixth acquisition in the past 18 months.

The Welshpool-based company said it had agreed to buy electrical servcies firm Positron Group Pty Ltd for up to $43.7 million in cash and shares, with the final price dependent on Positron's performance in the current fianncial year.

A string of acquisitions helped RCR lift sales revenue by 34 per cent to $364 million for the year to June 2007.

Net profit rose a modest 11 per cent to $17.6 million while earnings per share actually fell by 9.3 per cent to 15.3 cents.

RCR put this down to the dilutionary impact of an August 2006 share placement and the impact of additional shares issued as part of the five acquisitions the company made over the period.

Positron was established in 1987 and has offices in Perth, Kalgoorlie, Pinjarra, Lithgow and Mackay.

Its principal Jeff Hogan will head up a new business unit, RCR Electrical Services.

An RCR announcement is pasted below

Leading national diversified engineering services provider RCR Tomlinson Ltd has continued to maintain solid financial growth with net profit after tax in the financial year ended June 30 2007 being $17.6 million.

Sales for the year increased by 34 per cent to $364.1 million, earnings per share decreased by 9.3 per cent due to dilution of shares caused by additional share placement in August 2006 and additional shares issued as a result of acquisitions through the year.

During the period the Company successfully completed the purchase of JG Engineering, VRBT, Australian Crushing Repair, the Applied Laser Group, Boilergenics and Eagle Engineering.

These acquisitions will provide significant organic growth opportunities to RCR in future reporting periods.

Chief Executive Officer, John Noordhoek, said that shareholders would benefit from the $17.6 million after tax profit with a 25 per cent increase in dividends to 5 cents per share.

Mr Noordhoek said the outlook for the engineering services sector remains extremely strong and we expect that RCR's results for the 2008 financial year will increase significantly on this year's results.

"RCR has benefited from a buoyant industry and strategic acquisitions. We expect the strategic direction of the board and the prudent risk management practices implemented by senior management will continue to provide financial growth opportunities to the company moving forward.