Engineering and property management firm United Group Ltd has booked a 45.7 per cent rise in first half profit and maintained its annual earnings guidance as recent US acquisitions boosted revenue to a record high.
Engineering and property management firm United Group Ltd has booked a 45.7 per cent rise in first half profit and maintained its annual earnings guidance as recent US acquisitions boosted revenue to a record high.
But the market reacted negatively to the interim profit result, which was below analyst's expectations, driving United's shares down $3.60 to $10.89 at the close.
First half net profit rose 45.7 per cent to $51.48 million as revenue grew by 20.3 per cent to a record $1.57 billion.
United bought US property management company Unicco Service Company for $477 million in July and paid $163 million for another US property company, Equis Corporation, in 2006.
United also provides engineering services to the booming resources sector and has ridden on a wave of infrastructure spending by governments in Australia and Asia.
"The first half results are strong," United chief executive Richard Leupen said.
"The extent of the revenue and earnings growth reflects the strength of the underlying businesses and the contribution from acquisitions."
United reaffirmed its annual guidance to achieve 15 to 20 per cent growth in underlying net profit.
Underlying profit in the first half rose by 51 per cent to $53.3 million.
The firm said that the three main drivers of its growth - increased infrastructure spending in Australia and Asia, a buoyant resources sector and a growing global property services business - all remained strong.
"United Group continues to benefit from the long term and continuous growth in outsourcing and that trend shows no sign of abating," the firm said.
The Sydney-based firm said it continued to assess other growth opportunities.
"The Australian market remains capacity constrained so we are working hard to consolidate our position locally and expand our delivery internationally," it said.
United increased its order book over the half by 52 per cent to $6.7 billion - growth Mr Leupen said was a major achievement and underpinned its workload for many years to come.
United said its rail division performed well, generating revenue of $547 million and earnings before interest and tax (EBIT) of $36.3 million. The business secured $1.2 billion of new projects since the start of 2008.
The resources division grew EBIT by 30 per cent to $22.8 million. More than $200 million of new projects were secured since the start of the 2008 full year, United said.
Revenues from the company's services division increased by 104 per cent to $441 million and EBIT was up 29 per cent in this period to $30.7 million.
Underlying group EBIT for the half was $87.3 million, up 40 per cent.
"United Group is confident that the North American operations will not be materially affected by any potential slowing of the US property market," Mr Leupen said.
"UGL Services is well placed for sustainable growth with a strong record for achieving project extensions, an order book of $2.3 billion and a strengthened international platform, including a market leading North American business."
