United Group replaces O’Neill

THE United Group has removed Dennis O’Neill as its CEO two days before announcing a 43 per cent fall in full-year net profit.

Mr O’Neill will be replaced by Richard Leupen, former managing director of Kaiser Engineers and president of the company’s international and US operations.

Based in the US, Kaiser Engineers has been a leading provider of engineering, project management and construction services to many of Australia’s major resource projects since the 1950s.

Kaiser Engineers was recently acquired by Hatch Associates of Toronto.

United Group Limited chairman Ivan Deveson said its board acknowledged Mr O’Neill’s contribution to the United Group over the past six years, particularly his achievements in diversifying the group through the acquisitions of Kilpatrick Green Holdings Limited and A. Goninan & Co Limited, and the formation of Total Asset Management Services.

Mr O’Neill said he enjoyed working with United Group during which time turnover increased from $177 million to $761 million.

Net operating profit before abnormal items and after tax was $13.1 million for the 12 months ending June 30, representing a decrease of $5.7 million from last year’s record result of $18.8 million, despite an increase in revenue of 51 per cent.

Mr Deveson said while the results were disappointing, “the resilience of the group’s performance in the most difficult year clearly demonstrates the success of the diversification strategy pursued in recent years”.

United has declared a fully ranked ordinary dividend of 3¢ per share to be paid on October 12 – bringing the total dividend for the year to 9¢.

Mr O’Neill said its net debt to equity ratio has been reduced to 59 per cent from 110 per cent reached immediately after the purchase of Goninan.

“The construction industry in WA has been extremely flat for the past 12 to 18 months,” he said.

“I don’t think the diversification strategy was too late. I think the severity of the downturn of the construction industry hit everyone by surprise.

“We haven’t diversified for diversification sake. It was a well thought out diversification strategy.”

Mr O’Neill said he had turned around a number of businesses including the United Group,

He said he was not upset with his impending departure as the decision had been made mutually.

“I made it clear some time ago that I would not renew my contract, and the board at the same time as I decided to bring the change forward earlier,” he said.

“The contract had a little way to run but it was the right time. You make these changes for the benefit of the company.

“The new people will now put their vision and direction in terms of where the company goes from here.

“To be only 7 per cent down on EBITA is a credit to the people who work in this business.”

He said the financial strength of United Group in difficult trading conditions emphasised the potential of the group once more favourable conditions returned.

“With an order book of $1.2 billion, the group is well placed to generate further growth during the current year,” he said.

“As a result of the restructuring and strategic initiatives which have been implemented, the group is now in a more competitive position with a revenue base much less vulnerable to cyclical movements in key markets.”

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