Melbourne-based Structural Systems has reported a strong year for its WA-based Rock Engineering Pty Ltd mining subsidiary as mining sector demand increases, including specialised drilling.
Melbourne-based Structural Systems has reported a strong year for its WA-based Rock Engineering Pty Ltd mining subsidiary as mining sector demand increases, including specialised drilling.
Rock will pursuing opportunities in New Guinea and Indonesia, Structural Systems managing director Robert Freedman told shareholders at the company's AGM today.
In addition, the company's western division has been busy working on an LNG plant in Darwin and constructing or refurbishing several bridges in regional Western Australia.
Below is an edited version of his speech:
Rock Engineering
Rock continues to benefit from the increased activity in the mining sector and recorded excellent revenue and profit growth in the 2005year.
The available opportunities in the business's traditional marketof ground support have been supplemented in recent years by specialized drilling activities such as presplit and depressurisation.
The drilling capacity was expanded further during the year by thepurchase of an additional three drill rigs.
The business secured thesurface drilling contract at Cadia in New South Wales in 2004.
This isthe first significant contract outside of Western Australia for thebusiness in recent years.
We are currently pursuing strongopportunities in New Guinea and Indonesia.
Northern Division
This division continues to be a significant contributor to the overallGroup's result.
Although some tightening has occurred in the posttensioningmarkets during the year the division is well establishedthroughout NSW, ACT and QLD.
This gives the division goodcoverage to draw upon opportunities across a broad range of marketsectors and geographical locations.
In November 2004, a remedialdivision was established in NSW.
Western Division
This divisions' work load increased significantly this year on the backof securing a number of projects towards the end of last financialyear.
The division undertook a variety of large projects in the yearfrom shopping center works to the post-tensioning of a major LNGtank in Darwin to the construction and refurbishment of severalbridges in Perth and country WA.
Southern Division
Post-tensioning and reo-fixing activities increased from the prior year.
During the year the business undertook subcontract works in relationto the construction of three bridges.
Works are about to commenceon the recently secured Albury - Wadonga National Highway Bridge.
Opportunities in the Victorian remedial division were limitedthroughout the year.
Structural Systems Joint Venture - Middle East2005 saw a continuation of the high level of construction activityexperienced in the UAE over the last two years.
The businesshowever continues to operate from a low risk position, yet managed tosignificantly increase its revenue and profit during the year.
Repeat business with known clients is a key part of the strategy of this business and these works contributed the majority of revenue in theyear.
The business undertook a diverse range of building and bridgeprojects within the UAE and completed its first project in Bahrain.
Fullownership of this division will see an injection of financial andtechnical support from Australia to capitalize on current opportunities.
Structural Systems Joint Venture - United Kingdom
This business has shown strong revenue and profit growth in the lasttwo years.
Projects were undertaken throughout the UK and Ireland.
In order to meet the demand in the north of England the Companyopened offices in Manchester and Edinburgh during the year.
Theacceptance of post-tensioning as a construction alternative continuesto grow in the UK.
This coupled with robust conditions in most marketsectors has meant significant opportunities are available.
During theyear the business secured the contract for the post-tensioning of fiveLNG tanks in Wales.
At approximately A$12 million this is the largestsingle post-tensioning contract in the company's history.
We have been advised last week that our UK operation has beenawarded the Sword of Honour for best practice in OH&S.
This awardis given to only 40 companies world wide each year by the BritishSafety Council.
Future Growth
This will come predominantly from four main areas.
1. Expansion of mining services on the back of massiveexpenditure by BHP and Rio Tinto in particular.
2. Geographic growth of our core businesses into other overseasterritories, i.e.
Vietnam and the US.
3. Acquisitions into core businesses supply lines, which enables usto source more economically our base products used within thefranchise group in contracting together with overseas sales toour affiliates and external users.
4. Development of a new division of Civil Engineering in Australiato accommodate the substantial growth in infrastructurespending over the next five years.
This new division with arecently recruited General Manager will commence in January2006.
Shareholders should be aware that the Company has recentlyupdated its website.
I would encourage you to have a look at the site.
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