Infrastructure consultant Opus International says it performed well in New Zealand in the half year, with work gearing up in Christchurch after last year's earthquakes.
But conditions remained difficult in Britain, despite it recently winning a big new road management contract. Australian markets were worse than expected, with a bad debt of $600,000 hitting the bottom line there.
Opus posted a net profit of $10.7 million for the half year to the end of June, down 4.8 per cent on the same period in 2011, which was boosted by a $1.4 million tax credit.
Underlying operating profits were $14.4m, up 7 per cent on the same period last year's earnings before interest and tax. 'This is a good result for Opus, given continuing weakness and uncertainty in the global economy,' Opus chairman Kerry McDonald said. Opus announced an interim dividend of 4.0 cents a share, fully imputed.
Opus chief executive David Prentice said: 'In New Zealand, we performed well. The market has strengthened in some areas and the Christchurch earthquake rebuild is gaining momentum.'
In New Zealand, revenues were up slightly to $144.7m. Profit margins improved from $12.28m in 2011 to $15.45m this half year, with a couple of projects turning a higher level of profit.
'The New Zealand business continues to be very strong, albeit the work out of Christchurch is netting off the work in other areas which are not as strong as they have been,' he said. In Christchurch Opus had gone from 170 staff before the quakes to 230 fulltime equivalents now. 'So it has already ramped up, without the rebuild really taking off,' Prentice said. With the central city plan announced in the last fortnight, work was expected to increase.
Market conditions were generally difficult in Britain, with the division posting a loss of $624,000 in earnings before interest and tax, a slightly better result than the previous year. Opus, with its joint venture partner Arup, recently won a big contract for 5000km of road network management services for Hertfordshire County Council, Prentice said.
This was a seven-year contract with the option of a five-year extension and would boost the UK Opus team by over 130. The contract was worth about [PndStlg]7 million (NZ$13.5m) a year.
In Australia, where markets and performance were down on expectations, Opus profits were hit by a significant doubtful debt of A$0.6m (NZ$780,000) from a contract in the resources sector, after the client company went into liquidation. That knocked ebit losses to almost $1m in Australia, compared with a $1.35m ebit profit in the half year in 2011.
- © Fairfax NZ News
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