25/08/2008 - 10:13

RCR posts record profit and sales

25/08/2008 - 10:13

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Welshpool-based engineering company RCR Tomlinson Ltd has reported its fifth consecutive year of record earnings and sales for the 2008 financial year, with net profit rising slightly to nearly $18 million.

Welshpool-based engineering company RCR Tomlinson Ltd has reported its fifth consecutive year of record earnings and sales for the 2008 financial year, with net profit rising slightly to nearly $18 million.

Net profit after tax rose two per cent to $17.95 million, up from the previous year's $17.63 million, however earnings per share dipped four per cent to 14.7 cents from 15.3c.

The company said it achieved a "solid result" despite the difficult year where project delays impacted on the profit result for both the electrical and mechanical construction business units.

"The mechanical construction division did not commence any new project work until late January 2008 and the Positron result was impacted by the delay in the Prominent Hill project," RCR said.

In October, RCR acquired electrical services firm Positron Group Pty Ltd for nearly $44 million.

The acquisition boosted total revenue by 42 per cent from $364 million to $518 million but impacted on the profit margin due to project delays and underperforming projects at Boddington and New South Wales.

"The Positron situation has improved significantly over the past few months following an organisational restructure and employee numbers returning to similar levels as at the time of purchase now that the Prominent Hill project is underway," RCR said.

At the end of the period, RCR's order book stood at $170 million, up from $50 million, and is waiting on decisions relating to $150 million worth of tenders.

"RCR is expecting organic revenue growth of 15 per cent in the 2009 financial year and an improvement in margin levels that will result in a commensurately stronger net profit after tax," chief executive John Noordhoek said.

"The main challenge faced by RCR, and engineering contractors in general, continues to be project delays affecting the electrical and mechanical construction businesses. Project delays are being driven by constraints on skills and contractor workloads."

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