Leighton reports positive outlook and another good year for shareholders

Issue Date:  06 November 1997
Issued By:  Leighton Holdings Limited

At Leighton Holdings Limited's 36th Annual General Meeting held in Sydney today, Chairman Mr MA (Tim) Besley AO, said that the Group had set new records for revenue, profit and work in hand for the fourth consecutive year.

Mr Besley said that all of the company's significant financial indicators again showed major improvement with total profit, boosted by abnormal profits of $46 million from asset sales, up 88% to $132 million, total revenue up 25% to $3.2 billion and uncompleted work in hand up 29% to $4.2 billion.

"During the first quarter of the 1997/98 financial year, the level of work in hand came off slightly to $4.0 billion as no new large projects had been won," said Mr Besley.

"The strong result translated into further shareholder gains with return on shareholders funds (before abnormals) of 15.9%, up 20%," he said.

The total ordinary dividend for the year will be 22 cents (fully franked) representing a rise of 47%. In addition a special dividend of 10 cents (fully franked) was paid in September 1997.

The Board announced the introduction of a Share Purchase Plan, effective immediately, which allows shareholders to purchase between $500 and $3,000 worth of shares at a discount of 2.5% to the average market price.

"Excellent performances from our operating companies and the proceeds from the sale of Welded Mesh and other investments, have placed the Group in an extremely strong cash position with an unencumbered balance sheet and no net debt," said Mr Besley.

"The Group's sound financial base has helped create the necessary momentum for medium term growth and we are actively planning for the long term to ensure the sustained growth and optimisation of our core businesses," he said.

Commenting on the Group's prospects in Australia and Asia, Chief Executive, Mr Wal King said the outlook remained positive despite the dampening effect of the current financial instability in Asia on the company’s share price.

"We are confident that there will be no significant impact on this year's result from the economic corrections in Asia," said Mr King.

"Whilst it is impossible to predict the medium to long term impact on regional economies and the overall level of opportunities, there will undoubtedly be some projects which will benefit from local currency developments.

"Australia remains our largest and most important market accounting for between 70% and 80% of the Group's business.

"We see no reason to modify the healthy outlook for the construction industry this year with growth of 8% forecast.

"The building market will continue modest growth with civil engineering projects, particularly transport infrastructure, providing good opportunities.

"The outlook for the resources sector remains good. Some projects may stall as a result of the uncertainty in Asian export markets and the slide in gold prices although the scale of mining and infrastructure opportunities is still very substantial.

"In Asia, we will continue our strategy of being highly selective in the projects we pursue whilst carefully monitoring the financial situation in the region.

"The Group will concentrate on its key markets of Hong Kong and Indonesia, which account for 80% of our workload in Asia. The newer market of the Philippines also offers interesting resources and infrastructure prospects.

"A number of major transport projects are planned in Hong Kong with more than A$20 billion expected to be spent on expanding the existing rail networks over the next ten years.

"The outlook for the Group in Indonesia also remains positive despite the substantial devaluation of the rupiah.

"An even more cost competitive environment in Indonesia could stimulate foreign investment especially in the resources sector where product is sold in US dollars.

"Other countries within which we operate vary significantly in terms of their outlook and financial situation. However, opportunities for growth over the next few years will be reduced in countries such as Thailand," said Mr King.

The Directors expect operating revenue and operating profit to be maintained in 1997/98.

Issued by: Leighton Holdings Limited
ACN 004 482 982

For further information:
Mr Wal King, Chief Executive Officer,
Ph: (02) 9925 6912

Mr Dieter Adamsas, Director, Finance & Administration,
Ph: (02) 9925 6923