Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Fulton Hogan more than doubles 1H pretax profit

Fulton Hogan more than doubles 1H pretax profit, eyes growth after Shell exit

By Paul McBeth

March 10 (BusinessDesk) - Fulton Hogan, the privately held construction firm, more than doubled first-half pretax earnings with its five business units all running ahead of budget, and plans to ramp up growth once the Shell Group share buyback is completed.

Pretax profit climbed 144 percent to $92.8 million in the six months ended Dec. 31, for a net profit of $64 million, the Christchurch-based company said. Revenue was $1.64 billion in the half. The forward order book was $2.8 billion, down from the $3.4 billion level it gave in October.

The New Zealand business was underpinned by a pick-up in the economy that’s driven regional and infrastructure business, while the Australian sector was helped by increased airport work and the completion of six of seven distressed projects that had needed impairment charges in the past.

Managing director Nick Miller told BusinessDesk the slowing of Australian capital investment from the resources sector will flow through into Fulton Hogan’s business, and the strong New Zealand dollar was also weighing on trans-Tasman earnings.

Still, a pipeline of large public-private partnerships has opened opportunities for Fulton Hogan across the Tasman.

“For us, the challenge and the opportunity, is one of scale” and the company would participate as part of a consortia for the projects, Miller said. “We’re positioning Fulton Hogan to play to its strength as a key enabler to access that work.”

Fulton Hogan will complete the last two tranches of $117 million in a share buyback to allow Shell cash up out of the company. Once that’s completed, Fulton Hogan plans to accelerate a new phase of growth with its New Zealand unit diversifying into new sectors, such as irrigation, and the Australian segment knuckling down on its core businesses.

“At the completion of that (the Shell share buyback), Fulton Hogan is going to have a lot of available capital for the growth of the business,” Miller said.

Fulton Hogan retired $138.9 million of debt in the half, and refinanced some $155 million of banking facilities using its operational cash flow and the sale of some non-core assets, it said.

Miller said the company aims to bring its balance sheet to the equivalent of a BBB credit rating in 2015, and once the Shell buyback is completed, it will be on target to do so. He said it has no plans to raise capital.

Fulton Hogan shareholders were offered a 1-for-40 share issue last year to give them greater exposure to the company, of which 21.9 million shares were taken up. Miller said since the offer, the shares were valued at $8.60, up from $7.60.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Final Frontier: Rocket Lab And NASA Sign Commercial Space Launch Agreement

Rocket Lab has signed a Commercial Space Launch Act Agreement with the National Aeronautics and Space Administration (NASA). The agreement enables Rocket Lab to use NASA resources - including personnel, facilities and equipment - for launch and reentry efforts. More>>

ALSO:

Scoop Business: Wheeler Downplays Scope For ‘Large’ Rates Fall

Reserve Bank governor Graeme Wheeler says some market commentators are predicting further declines in interest rates that would only make sense for an economy in recession, although some easing is likely to be needed to maintain New Zealand’s economic growth. More>>

ALSO:

Ruataniwha Dam: Consent Conditions Could Mean Reduced Intensity

Legal advice sought by the Hawke’s Bay Regional Council on the Ruataniwha Dam consent conditions has confirmed that farmers who sign up to take water from the dam could be required to reduce the intensity of their farming operation to meet the catchment’s strict nitrogen limit. More>>

Health And Safety: Bill Now Sees Rules Relaxed For Small Businesses

Health and safety law reform sparked by the Pike River coalmine disaster has been reported back from the industrial relations select committee with weakened requirements on small businesses to appoint health and safety representatives and committees. More>>

ALSO:

Bearing Fruit: Annual Fruit Exports Hit $2 Billion For First Time

The value of fruit exported rose 20 percent (up $330 million) for the June 2015 year when compared with the year ended June 2014. Both higher prices and a greater quantity of exports (up 9.0 percent) contributed to the overall rise. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news