Watpac Limited releases full-year results for 2010
Announcement posted by Watpac Limited 20 Aug 2010
Watpac Limited (“Watpac”) (ASX: WTP), one of Australia’s leading construction, civil and mining, and property groups, is pleased to report an after-tax profit of $26.8 million for the year ended 30 June 2010.
Net operating profit before tax is up 232 per cent on the previous corresponding period and net profit after tax reflects an increase of 138 per cent. This translates to a 77 per cent improvement in earnings per share.
The Group has $1.4 billion of work in hand at 30 June 2010.
The Board continues with its policy to return value to its shareholders by way of a final dividend of 6.5 cents per share, fully franked. Total fully franked dividends paid for the year is 11 cents per share, up half a cent from the previous year.
The Group’s contracting businesses made an excellent profit contribution in light of challenging economic conditions. During the period, the business alsoabsorbed further one-off costs associated with restructuring the civil and mining business to allow it to capitalise on growth opportunities, particularly in the resource sector. The result is also calculated after absorbing $9.3 million of property-related holdings costs which under more favourable market conditions would have been capitalised.
Greg Kempton, Watpac Managing Director, said: “We have delivered an excellent profit result for the year and continued to successfully implement our strategy of geographic and product diversification. We have an excellent backlog of work spread across vertical construction, refurbishment, civil infrastructure and mining in almost all regions of Australia.”
The Group has relocated to improved office premises in Brisbane, Sydney and Melbourne during the year. These moves were required to accommodate increasing staff numbers in each location, with total group employees at approximately 950.
“Watpac’s profile as a muti-disciplinary contractor continues to improve outside of our historical home in Queensland, having continued to build on our track record of delivering large, complex projects in both New South Wales and Victoria during the year,” Mr Kempton said.
Market conditions in the property sector remain challenging. The Company has implemented a strategy to reduce gross exposure to long-term property assets and reduce holding costs. However, Watpac remains cautiously optimistic about its property prospects with strategically
located asset holdings in Queensland and Victoria which will allow the Company to capitalise on development opportunities when market conditions are appropriate.“We are pleased to have delivered three quality property development projects during the period and are in the process of marketing those assets for sale,” Mr Kempton said.
The Board believes the 2010 dividend reflects an excellent yield on the average share price for the year but is cognisant of the need for the Company to carefully manage its cash reserves moving forward, particularly in light of its significant growth plans for the civil and mining business.
For the full results, visit www.watpac.com.au or www.asx.com.au and use the code 'WTP'.