24/08/2010 - 11:04

Southern Cross 2010 profit falls 39.7%

24/08/2010 - 11:04

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Southern Cross Electrical Engineering has recorded a 39.7 per cent fall in annual profits for the 2010 financial year.

Southern Cross 2010 profit falls 39.7%

Southern Cross Electrical Engineering has recorded a 39.7 per cent fall in annual profits for the 2010 financial year.

The electrical and instrumentation construction specialist recorded statutory net profit after tax of $8.7 million down from $15.5 million in 2009.

The company's revenue was also down slightly to $97.4 million compared to $100.3 million for the previous corresponding period.

Despite the lower profit, Southern Cross has declared a fully franked final dividend of 4.5 cents per share.

In a statement to the Australian Securities Exchange Southern Cross said, "SXE has recently secured a number of smaller projects which has taken the Company's order book from $28 million to over $40 million."

"The Group currently has $250 million worth of international and domestic tenders currently in the decision phase, as well as a healthy pipeline of opportunity in its key sectors," the statement said.

 

See company statement below:

Electrical and instrumentation construction specialist ("E & I"), Southern Cross Electrical Engineering Limited (ASX:SXE) today reported underlying net profit after tax of $11.7 million on revenue of $97.4 million for the year ended 30 June 2010.

The main earnings drivers for the year have been the work performed on the Pluto, Brockman 4, Cape Lambert and Tiwest projects. All projects undertaken have been profitable, and client feedback has again been very encouraging.

The Board of Directors have declared a final dividend of 4.5 cent per share fully franked which total dividends for the year to 6.5 cents per share, fully franked. This maintains dividends at the same level as the previous corresponding period. The final dividend will be paid on 5 November 2010 to shareholders on the register at 3 September 2010.

In a challenging market, SXE was pleased to increase its Australian revenue (excluding business acquisitions) by $3.0 million and margins were up on FY2009. Due to a lack of international projects during the year, overall margins were slightly lower than in FY2009.

The performance of the Hindles and K.J. Johnson & Co businesses were in line with management's expectations, however, the uncertainty created by the proposed introduction of the RSPT resulted in Oceanic's revenue being slightly below expectations.

SXE's outstanding HSE record was again maintained with zero Loss Time Injuries (LTIs) for the sixth year in a row. This performance was recognised by the National Electrical Contractors' Association's award for safety performance recently awarded to SCEE.

During the year SCEE has had a large build up of work in progress ("WIP") which has affected the Company's operating cash flow. This will reverse in the first half of FY2011 as the projects relating to the WIP are completed.

Outlook
Positive signs in the third quarter of FY10 began to emerge within SXE's Australian key clients, however, uncertainty around the proposed RSPT impacted on the level of bidding activity and on the awarding of new projects. In recent weeks, it is encouraging to note that SXE's key clients have begun making positive announcements regarding new projects. These announcements, coupled with the continuing investment by the oil and gas industry, provide a solid pipeline of opportunities for SXE.

Similarly, our international clients have returned to investing in projects and a significant amount of effort has been made in international business development over the last 12 months. SXE has maintained its position as the preferred E & I contractor for a number of these clients.

On 2 August 2010 Simon High commenced as Managing Director. Simon's experience in managing large scale contracts is expected to greatly assist SXE in converting the pipeline of opportunities into contract awards, and to strengthening the company's presence in the Oil & Gas sector in Australia and new international markets.

SXE has recently secured a number of smaller projects which has taken the Company's order book from $28m to over $40m. The Group currently has $250 million worth of international and domestic tenders currently in the decision phase, as well as a healthy pipeline of opportunity in its key sectors. SXE expects to secure a number of new projects in the coming months, further increasing the order book for FY2011 and beyond.

 

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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