Engineering company VDM Group has today booked a surge in first-half net profit as it continues to recover from a difficult period.
Engineering company VDM Group has today booked a surge in first-half net profit as it continues to recover from a difficult period.
The Perth company reported a 61 per cent lift in net profit after tax to $5.2 million - in line with previous guidance - on the back of a revenue lift from $238.4 million in the previous corresponding period to $242.8 million.
Earning per share increased 38 per cent to 3.6 cents while cash flows from operations rose from $11.95 million to $12.3 million.
Recently appointed VDM chief executive Ken Perry was pleased with the half-year result and was looking forward to continued success for financial year 2010 and beyond.
"The half-year result highlights the strength of VDM's business model and is a very pleasing improvement from last financial year's result," Mr Perry said.
"Our construction and contracting divisions were the key drivers of first half profitability and we expect to see this trend continue into the second half.
"Work in hand as at 31 December 2009 stood at $415 million after a strong order intake of over $250 million during the half year to December.
"We announced a number of significant contract wins in the first half, highlighting the confidence that our customers have in VDM Group.
"Our order book includes a diverse range of blue chip clients including Rio Tinto, BHP Billiton, CITIC, Woodside Petroleum and Fortescue Metals Group.
"We are seeing continued strength in our tender prospects and general business outlook in the second half to date, particularly in Western Australia."
VDM chairman John Saleeba was pleased to deliver an improved result to VDM shareholders.
"We have made significant progress in the past six months to strengthen our balance sheet, reduce debt and restore profitability," Mr Saleeba said.
"Following the $35 million ($33 million net) capital raising in October 2009, net debt has been reduced to $31.8 million compared with $72.9 million at 30 June 2009.
"This represents a net debt to equity reduction of 68% in the six month period achieved via strong operating cash flows and utilising some of the capital raised to reduce debt. Overall gearing ratio for the company reduced to 22% from 70% at 30 June 2009.
"VDM is well positioned for the second half and beyond. We expect that the appointment of our new CEO, Ken Perry, combined with recent initiatives to improve our business will ensure VDM continues to capitalise on the continued strength of the resources sector."
