SCEE expects profit return

Southern Cross Electrical Engineering has flagged its return to the black, saying it expects to report a $3.5 million first-half profit and remain profitable throughout the financial year.

The Perth-based contractor expects to post a net cash balance of $45 million with no debt in its half-year to December 31, and will declare an interim fully franked dividend of 1.35 cents per share.

“The board anticipates maintaining the total dividend for the 2016 financial year at 2.7 cents per share, being the same absolute level as in the past three years,” the company said in a statement.

“The anticipated result has been driven by a strong performance on key projects during the period.”

Looking into the second half of the financial year, the company said it expected to deliver further profit but with little visibility of large scale projects in the pipeline in the iron ore, coal, minerals and metals markets, market conditions remain challenging.

“Activity in smaller sustaining capital projects remains strong and with our brand recognition and extensive experience with clients, tendering activity is high,” it said.

“The construction phase of Australian LNG projects continues and offers potential for further growth in this sector.”

Newly appointed chief executive Graeme Dunn said management was highly focused on cost control and is continually reviewing the company’s operating structure to identify increased efficiencies.

“Notwithstanding the challenging conditions in its historic markets, the company remains committed to delivering growth through expansion into new geographies and adjacent and complementary sectors, both organically and through acquisition,” Mr Dunn said.

“A number of potential opportunities have been identified and investigated.

“Although none of these has resulted in a transaction yet, we maintain very active in this area.”

Southern Cross Electrical Engineering shares were 11.4 per cent higher to 39 cents each at 11am.