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Investors + Media AusGroup delivers earnings of AU$12.4 million for FY2011, expects revenue and profit margins to improve in FY2012
Investors + Media AusGroup delivers earnings of AU$12.4 million for FY2011, expects revenue and profit margins to improve in FY2012
AusGroup delivers earnings of AU$12.4 million for FY2011, expects revenue and profit margins to improve in FY2012
25 August 2011
- Cash and cash equivalents of AU$26.6 million as at 30 June 2011
- Order Book stands at AU$264 million (as of end June 2011)
- Proposed final cash dividend of 0.64 Singapore cents per share
AusGroup Limited (‘AGL’ or ‘AusGroup’ or the 'Group') today announced its results for the three/twelve months ended 30 June 2011 (‘4Q FY2011/FY2011’).
“For the financial year end 30 June 2011, the oil & gas and LNG sectors remained robust and were supported well by the minerals and resources sector which helped increase the revenue and profits for the Group. We have also seen order intake build over the last few months which it is expected to continue and improve as we move into FY2012.
The Group is experiencing increasing demand for its services and tendered margins are improving. With increasing revenues and better margin work expected to slowly flow into FY2012, I am optimistic that the year ahead will position the Group for improved shareholder return.” – Stuart Kenny, CEO / Managing Director.
Financial Highlights/Summary |
4Q FY2011
|
4Q FY2010
|
chg
|
FY2011
|
FY2010
|
chg
|
|
(AU$'000)
|
(AU$'000)
|
%
|
(AU$'000)
|
(AU$'000)
|
%
|
|
|
Revenue
|
148,251
|
123,215
|
20.3
|
602,026
|
366,714
|
64.2
|
|
Gross Profit
|
18,350
|
9,491
|
93.3
|
58,075
|
44,030
|
31.9
|
|
Gross Profit Margin
|
12.4%
|
7.7%
|
-
|
9.6%
|
12.0%
|
-
|
|
Other Operating Income
|
2,113
|
959
|
120.3
|
11,039
|
7,015
|
57.4
|
|
Impairment Expenses
|
0
|
(4,735)
|
(100.0)
|
0
|
(4,735)
|
(100.0)
|
|
Operating Expenses
|
(14,062)
|
(9,713)
|
44.8
|
(48,081)
|
(36,879)
|
30.4
|
|
Net Profit Attributable to Equity Holders
|
4,390
|
(5,315)
|
182.6
|
12,397
|
2,366
|
424.0
|
|
Net Profit Margin
|
3.0%
|
(4.3%)
|
-
|
2.1%
|
0.6%
|
-
|
|
Net Cash from Operating Activities
|
(3,624)
|
11,113
|
(132.6)
|
(6,158)
|
37,292
|
(116.5)
|
Revenue for 4Q FY2011 increased by 20.3% to AU$148.3 million due to the increased activity levels in this quarter in the Oil and Gas and LNG sectors as well as the increased activity levels in the mineral resources sector in the Australian Major Projects segment.
Revenue increased by 64.2% from AU$366.7 million in FY2010 to AU$602.0 million in FY2011 due mainly to increased activity in the oil and gas and LNG sectors.
The Group’s gross profit increased by 93.3% in 4Q FY2011 to AU$18.4 million with gross margin improved from 7.7% during 4Q FY2010 to 12.4% during 4Q FY2011. The improvement was largely as a result of the recognition of a loss on a construction contract in Q4 FY2010 and improved margins achieved in Q4 FY2011.
The Group’s gross profit increased by 31.9% in FY2011 to AU$58.1 million with gross margin declined from 12.0% during FY2010 to 9.6% during FY2011 due to losses incurred on two construction contracts.
Other income for the 4Q FY2011 increased by 120.3% to AU$2.1 million as a result of the leasing income associated with a significant scaffolding contract in Singapore.
Other income for the FY2011 increased by 57.4% to AU$11.0 million due to sale of a property in Australia coupled with leasing income associated with a significant scaffolding contract in Singapore.
Operating expenses (comprising administrative expenses, marketing and distribution expenses and operating costs) for 4Q FY2011 increased by 44.8% to AU$14.1 million largely due to the accrual of expenses in respect of the employee share scheme in the current year and the group’s short term incentive plan.
Operating expenses for FY2011 increased by 30.4% to AU$48.1 million largely due to the accrual of expenses in respect of the employee share scheme, the group’s short term incentive plan and impairments of trade receivables.
The Group’s net profit attributable to equity holders for 4Q FY2011 was AU$4.4 million (4Q FY2010: loss AU$5.3 million). The Group’s net profit attributable to equity holders for FY2011 increased by 424.0% to AU$12.4 million.
Financial Position as at: |
30 June 2011
(AU$'000) |
30 June 2010
(AU$'000) |
|
Property, Plant & Equipment
|
101,710
|
109,911
|
|
Cash & Cash Equivalents
|
26,578
|
26,379
|
|
Total Borrowings
|
22,010
|
16,456
|
|
Equity
|
139,082
|
116,369
|
|
Gross Gearing (Debt/Equity)
|
15.8%
|
14.1%
|
|
Net Gearing (Net Debt/Equity)
|
Net Cash
|
Net Cash
|
The Group’s balance sheet reflects cash and cash equivalents at AU$26.6 million as at 30 June 2011 and the Group maintained net cash position gearing-wise.
Outlook
The Group is continuing to benefit from high demand for infrastructure developments, particularly in Western Australia which in turn is driving demand for the Group’s services in the oil and gas, LNG, iron ore and other related sectors. The Group expects the demand for its services to increase on the back of a continuation of strong demand for commodities which are driving these projects.
The Group is currently experiencing a consistent high level of demand for pricing and tendering requests particularly in its Western Australian operations. The Group expects these levels of pricing and tendering activity to continue in line with economic forecasts which predict demand for commodities will continue to grow over the next few years.
As a consequence of this upswing in tendering activity, the Group’s tendered margins have improved. The benefit from these improved tender margins is expected to flow through to improved earnings in FY2012 and beyond.
The outlook for the Group’s fabrication and manufacturing businesses has also improved due to increased tendering activity which is also reflected in a higher than past order book coming into FY2012. This shows that Australian fabrication has a place in project delivery plans through demonstrated quality and delivery capabilities, despite competitive pressure from low cost country operators.
Committed projects and the exceptionally strong pipe line of projects in Western Australia has resulted in increasing concerns around the availability of project staff and labour within the state to execute these projects. The Group has dealt successfully with these constraints previously and recruitment strategies have been implemented to address potential staff and labour shortages. The Australian Federal Government has restructured immigration controls to allow international recruitment to become an effective option for the Group in order to assist with ensuring skilled personnel are available for our increased work activity over the next 12 months and beyond.
The Group is reviewing the impacts of the proposed Carbon Tax in Australia and is also assessing the potential opportunities for the Group that may arise out of its introduction.
The longer term outlook for the Western Australian markets – in iron ore mine development, LNG and oil and gas – has improved dramatically. The Group expects strong demand for its services over the next few years due to the range of services that the Group can offer these markets as a multidisciplinary contractor.
The Group has work in hand to the value of AU$264 million (end June 2011).
Dividend
The Board has proposed a final cash dividend (tax exempt) of 0.64 Singapore cents per share, subject to approval at the Group’s next Annual General Meeting.
The Group wishes to inform that an investor briefing pack for the 2011 full year results is available on the website - www.agc-ausgroup.com.
Attachments:
Ends
