'Pleasing' profit for Fulton Hogan

MARTA STEEMAN
Last updated 12:47 10/03/2014

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Leading civil engineering and infrastructure company Fulton Hogan has posted a "pleasing" profit of $64 million for the half year to December 31.

The company brought in $1.64 billion of "statutory" revenue from its businesses in New Zealand and Australia and produced earnings before tax of $92.8m, 144 per cent above the previous first half.

Managing director Nick Miller said the company had had a solid start to the year and the result was pleasing.

Revenue at $1.64b was 103 per cent of budget. The give main revenue streams of businesses in New Zealand and Australia were on or above budget.

The company, with 5300 employees across the two countries, had completed integrating Australian purchase, Pioneer Road Services, into the company's systems and culture he said.

It was running "Project Tasman" focusing on operational efficiencies in two key ways - using its scale in procurement and reviewing back-office systems supporting the business in New Zealand and Australia.

The company had been focused in the past two years on managing risk in its core industries and construction business in Australia, and continuing to diversify its New Zealand business.

Miller said it had been in a joint venture with John Holland for 18 months working mainly for KiwiRail.

It was also now working in the water and irrigation infrastructure sector. A Fulton Hogan-John Holland joint venture would build the headrace canal and bridges for stage one of the Central Plains Water scheme.

It had also been working on the relining of the Tekapo canals for Genesis Energy.

The outlook for the rest of 2014 was positive and the company had $2.8b in forward orders in New Zealand and Australia.

It was positioned for a new growth phase once the buyback of Shell shares was completed by the end of the calendar year. It would buy back $72m of shares in June and $45m in December. The shares were being cancelled adding to the value of the remaining shares.

Fulton Hogan would be free from the capital demand of the buyback in 2015 and was focusing on securing a good share of the New Zealand Transport Agency road maintenance contracts.

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- Fairfax Media

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