Engineering and construction group has reported a strong rise in net profit following a spate of acquisitions, but large share issues during the year meant there was little growth in earnings per share.
Engineering and construction company VDM Group Ltd has reported a strong rise in net profit following a spate of acquisitions, but large share issues during the year meant there was little growth in earnings per share.
Net profit after tax increased by 83 per cent to $10.4 million while earnings per share were up 2.7 per cent to 15.69 cents.
The company used share issues to partially fund its acquisitions, which included Cape Crushing & Earthmoving Pty Ltd, Barlow Gregg & Associates, Wylie & Skene Pty Ltd and Como Engineers Pty Ltd.
A VDM announcement is pasted below:
VDM Group Achieves Full-Year Profit of $10.4m, up 83%
VDM Group Limited (ASX: VMG) today reported a net profit after tax for the year ended 30 June 2007 of $10.4 million, an 83% increase over the corresponding period. This profit result was derived from a 190% increase in revenue to $232.2 million. EBITDA grew to $25.6 million from the corresponding period of $8.6 million, representing an increase of 198%.
The Directors have declared a fully franked dividend of 4 cents per share payable on 30 November 2007, bringing the full-year dividend to 8 cents per share. The dividend is consistent with VDM Group's dividend policy of paying out between 50-65% of the Company's after-tax profits as dividends.
Commenting on the result, VDM Group CEO, John Farrell, said: "We have delivered on the earnings guidance which VDM Group has consistently provided to the market during the 2007 financial year. Achieving revenue and EBITDA growth in the 200% range illustrates the successful rollout of our business plan as a public listed company."
The 2007 financial year was the first full year that VDM Group was listed on ASX. During this period total shareholder return of 58% was achieved. As well as shareholders receiving these significant benefits, VDM Group's profile and corporate status has been significantly enhanced. The share placement in May 2007 attracted strong institutional support to VDM Group's 2008 expansion plan.
During the financial year, VDM Group acquired interests in the following companies and businesses:
- a 75% interest in Cape Crushing & Earthmoving Pty Ltd
- a 100% interest in Barlow Gregg & Associates
- a 100% interest in Wylie & Skene Pty Ltd.
On 6 July 2006, VDM Group also acquired 100% of Como Engineers Pty Ltd.
Commenting on these acquisitions Mr Farrell said: "The performance of Cape Crushing and Barlow Gregg in the financial year has met our expectations and each business has been successfully integrated into our Group structure. The building blocks have been laid for our expansion strategy for the 2008 financial year, with the acquisitions of Wylie & Skene and Como Engineers. Negotiations in relation to the acquisition of Malavoca are at an
advanced stage and are expected to be finalised shortly."
"We intend continuing VDM Group's acquisition strategy into the 2008 financial year and are currently in negotiations on a number of further acquisitions", he said.
Outlook
Commenting on the outlook for the next 12 months, Mr Farrell said: "An earnings guidance statement will be given with the release of our full audited financial report".
