Investors + Media Announcements 2008 AusGroup's FY2008 Revenue Rises 35% to AUD$379.0 million
AusGroup's FY2008 Revenue Rises 35% to AUD$379.0 million
25 August 2008
- Strong growth in Australian operations, revenue up 41%.
- Maintains dividend of 0.61 Singapore cents per share.
- Order book stands at an all time high of AUD$296 million.
AusGroup today announced its results for the twelve months ending 30 June 2008 ('FY2008'). The revenue increased for FY2008 from the Group’s operations in Australia.
Gross profit declined marginally by 4% to AUD$48.2 million in FY2008 due to some contracts where margins were lower than anticipated. Net profit decreased by 25% to AUD$14.4 million in FY2008. Net profit was impacted by four key issues including project variation settlements below forecasts, execution difficulties on some projects, disappointing revenues from the Group’s Asian operations and reduced margins in some works undertaken within the Engineering division in Australia where some variations were not finalised by the end of the reporting period.
Financial Highlights |
FY2008 AUD$'000 |
FY2007 AUD$'000 |
Change % |
| Revenue | 378,980 | 281,131 | 34.8 |
| Gross Profit | 48,200 | 49,952 | (3.5) |
| Operating Expenses1 | 28,445 | 23,698 | 20.0 |
| Net Profit | 14,372 | 19,133 | (24.9) |
1 Includes Administrative, Marketing and Distribution, and Other Operating Expenses
|
“The earnings were impacted mainly in the Australian Engineering division related to certain variation claims on particular projects. We are taking a conservative approach and the Group does not recognise any revenue for work done under variation where the outcome of the variation is uncertain. Also, we are expanding rapidly and there continues to be a shortage in the market for certain skilled personnel. We want to assure our shareholders that the Group has thoroughly researched the issues that have impacted the results over the year. Accordingly a strategy has been agreed, and implementation has commenced which will ensure improvement of the Group’s performance. We are also keeping a cautious watch on the global economic scenario.” Mr John Sheridan, Managing Director of AusGroup Ltd |
Despite the aforementioned problems faced, the Group’s operations remain robust and the net cash generated from the operating activities increased from AUD$21.2 million in FY2007 to AUD$23.2 million in FY2008.
Business Segments |
FY2008 AUD$'000 |
FY2007 AUD$'000 |
||||
| Revenue | PAT | Margin | Revenue | PAT | Margin | |
| Engineering Division | 289,911 | 11,367 | 3.9% | 234,365 | 17,400 | 7.4% |
| Services Division | 89,049 | 2,824 | 3.2% | 46,715 | 1,179 | 2.5% |
Both the Engineering and Services divisions registered growth in their revenue contributions with growths of 24% and 91% respectively. The Services division
contributed about 24% to the Group’s overall revenue in FY2008 as compared to 17% in FY2007. The increase was mainly due to increased plant maintenance work performed by the division in 2008.
Geographical Segments |
FY2008 AUD$'000 |
FY2007 AUD'000 |
Change AUD$'000 / % |
|
| Australia | 354,750 | 252,183 | 102,567 | 40.7 |
| Singapore | 24,230 | 28,948 | (4,718) | (16.3) |
The Group’s revenue from Australia increased by 41% in FY2008 to AUD$354.8 million, contributing about 94% of the total revenue due to strong market conditions in Australia.
The revenue from Singapore was disrupted by the capital expansion exercise at the Singapore side and consequently revenue declined by 16% to AUD$24.2 million in FY2008. For the Group’s operations in Singapore, whilst revenues where disappointing the margins improved during FY2008 due to improved operational efficiencies. The Group expects to benefit positively with the upstream oil and gas sector expected to remain strong over the next period.
AusGroup also announced a final one-tier tax-exempt cash dividend of 0.61 Singapore cents per share, subject to shareholder’s approval.
As at the last practicable date, the Group’s order book stood at a record AUD$296 million, an increase of 27% over last year’s figure, portraying the Group’s strength in securing new contracts. With strong demand for fabrication and construction services in Western Australia’s mining and oil and gas sectors, the Group is poised for further growth.
Barring any unforeseen circumstances, the Group expects to remain profitable in FY2009.
