Northbridge-based engineering and construction consultancy VDM Group Ltd has increased its net profit for the half year to $5.1 million, an increase of 182 per cent.
Northbridge-based engineering and construction consultancy VDM Group Ltd has increased its net profit for the half year to $5.1 million, an increase of 182 per cent.
Company chief executive John Farrell said in an announcement that the results reflected the company's growth plan, with the board expecting VDM's annual net profit would exceed $10 million.
VDM revenue was up 428 per cent to $112.6 million, from the $21.3 recorded in the previous corresponding period. Earnings before interest, tax, depreciation and amortisation were up 386 per cent to $12.8, compared to the $2.6 million recorded in 2005.
A company announcement is pasted below:
VDM Group Limited (ASX: VMG) today reported a net profit after tax for the
half year ended 31 December 2006 of $5.1 million, a 182% increase over the corresponding period in
the previous financial year. This profit result was derived from a 428% increase in revenue to $112.6
million.
The Directors have declared an interim fully franked dividend of 4 cents per share payable on 15 May
2007.
Commenting on the result, VDM Group CEO, John Farrell, said: "The results reflect the growth path
which VDM Group has undertaken prior to and post the listing of the Company on ASX on
15 February 2006. The current year interim results exclude the development net profit of $370,000 on
the groups GEO Apartment development project, which is expected to be brought to account in the
results of the second half."
"Shareholders are being rewarded from the strong result with a 33% increase in the interim dividend,"
Mr Farrell said.
Each of VDM Group's three divisions--Consultancy, Construction, and Resources and Infrastructure
Services--performed well in buoyant market conditions, which are continuing to test the labour and
management capacity available to the operating companies with the Group.
Commenting on the Consulting Division's performance, the division's Chief Operating Officer, Clive
Bradshaw, said: "We have continued to expand and extend our reach of capabilities to all parts of
Australia and beyond. The acquisition of EcOZ, while a relatively small acquisition in monetary terms,
has positioned the Group strategically in the Northern Territory.
"Our planned expansion in the Middle East is progressing according to our strategy and should
translate into a number of interesting projects in the second half of the financial year and beyond. The
acquisition of Barlow Gregg VDM Pty Ltd during the half year has been successfully integrated."
Commenting on the Construction Division's performance the division's Chief Operating Officer, Stuart
Cuthbert, said: "Civmec has had an outstanding six months. Keytown's performance was reasonable
in testing market conditions; however, with a change in management structure and the type of projects
which Keytown will undertake in the future, performance in the second half of the year is expected to
exceed the performance in the first half."
Commenting on the acquisition of Cape Crushing and Earthmoving Pty Ltd, Chief Executive Officer,
John Farrell, said: "Cape Crushing's performance in the second half of the year is expected to be
stronger than the first half. During the first half significant expenditure was incurred on repairs and
maintenance which is expected to be reduced significantly in the second half."
With regard to the full-year result, Mr Farrell said that net profit is expected to exceed $10 million thus
reconfirming the previous guidance issued by the VDM Group. VDM intends continuing its acquisition
strategy to facilitate expansion of existing and new services currently not offered by the Group's
operating companies.
