Leighton reports 13% profit increase and record $7.57 billion of work in hand

The directors of Leighton Holdings Limited today announced a 13% increase in operating profit after tax and minorities of $59.1 million ($52.5 million last year) from a pre-tax profit of $82.6 million.

An unfranked interim dividend of 14 cents was also announced by the directors representing a 8% increase (13 cents last year).

Chief Executive, Mr Wal King AM, said that the strong interim results reflected the success of the Group’s diversification strategy. The result included an excellent performance from operations in Asia and the profitable sale of the Airport Motorway investment, he said.

Operating revenue for the six months was $1.91 billion ($1.65 billion last year) with principal sources including engineering and infrastructure $679 million, building and property $445 million, mining and resources $506 million, telecommunications $182 million, and environmental services $100 million.

“Work in hand has risen to an all time record of $7.57 billion,” said Mr King.

“This rise has come from a significant increase in telecommunications activity, a large base load of long-term mining contracts and recent acquisitions including John Holland. It also highlights the importance of the Group’s presence in Asia.

“The strength of the forward order book will underwrite the Group’s performance for the next few years and carry us through the current downturn in the Australia construction market.

“We should come through the downturn in a stronger position than when it started and are ready to capitalise on opportunities when the market turns around,” said Mr King.

“In Australia, the telecommunications industry continues to provide good opportunities. A major highlight is the commencement of Australia’s largest privatised optic fibre cable, the $820 million Nextgen Networks project. Telecommunications now accounts for 25% of work in hand in Australia.   

“Mining and resources will remain a key market for the Group with over $3 billion of work in hand and Thiess’ pre-eminent position should allow it to participate in further developments in the coal industry,” he said.

“The downturn in the Australian construction industry is likely to last into 2001/02. However there are a number of large engineering and infrastructure projects currently being planned by the Federal and State Governments which provide some good prospects.

“The building market remains tight with some public sector opportunities in defence and health as well as selected commercial projects. Leighton Properties are progressing a number of developments along the east coast of Australia.

“In Asia we see some significant projects adding to an already strong level of mining work in Indonesia and construction work in Hong Kong and Malaysia. Prospects are promising for the installation and maintenance of telecommunications infrastructure in a number of South East Asian countries with some work already proceeding,” he said.

“The Group has enhanced its financial strength with total assets up by 24% to $1.89 billion and net assets up by 11% to $693 million.  Gearing remains positive with net cash of $276 million at 30 December, 2000.

“Revenue for the full year is expected to be in excess of $4 billion based on the Group’s strong first half and record level of work across Australia and Asia. Profitability should also improve with another strong result expected for the full year.

“The directors remain very positive about the Group’s overall outlook and its ability to generate good growth for shareholders in the longer-term, said Mr King.

ENDS.