Opus Lifts Dividend

16 February 2016

MEDIA RELEASE

Opus Lifts Dividend

Opus International Consultants delivered a much improved New Zealand and United Kingdom performance in 2015 but the Group result was impacted by poor economic conditions in Canada and Australia.

Revenue of $505.2m was down 6% on prior year. Operating EBIT of $30.9m was down 5% and NPAT, which included significant accounting adjustments, was down 36% to $16.7m. Removing these adjustments, adjusted NPAT was almost unchanged at $21.2m.

The adjustments include a deferred consideration release of $8.1m and a goodwill impairment of $12.6m in Canada both relating to the acquisition of Stewart Weir in 2013.

Opus confirmed a final dividend of 4.9c per share which is fully imputed taking the full year ordinary dividend to 9.0c. With the special dividend of 2.0c paid at the Half Year, reflecting the strong overall cash position of the business, the total dividend is 11.0c, up 24% on prior year. This represents a gross dividend yield at balance date of 12.2%.

“It is a challenging environment, not one for the fainthearted but our market diversification and continuous improvement programmes are mitigating the downturn in some markets and helping the business thrive in others,” said Chairman Kerry McDonald.

Market conditions remained tight in New Zealand with competitive pricing across all sectors. However, despite revenue decreasing by 3.7% to $276.7m, operating EBIT increased significantly by 29% to $36.8m. “This was primarily a result of the improvement work we put into the New Zealand business,” said Chief Executive, Dr David Prentice.

The United Kingdom business achieved its best ever performance with revenue up 30% to $64.3m and operating EBIT up 133% to $2.7m. “Performance was underpinned by several years of improvement programmes and our strategy of targeting rail and road transportation, buildings and water opportunities for key clients such as Hertfordshire Country Council, Network Rail, and the Environment Agency,” said Dr Prentice.

Despite continued market uncertainty in Canada, the business was profitable with the second half of the year a significant improvement on the first half. However, the effects of the sharp drop in oil prices resulted in a reduced revenue and operating EBIT of $112.4m and $1.5m respectively. “To address the significant shortfall in revenue, we took early steps to implement cost saving measures, including a reduction in employee numbers of 98, at a total restructuring cost of around $700k. Key to this was the objective of balancing short term profitability with long term sustainability and capability,” added Dr Prentice.

The performance of the Australian business has been sharply impacted by the resource sector decline and as a result, revenue decreased to $50.5m. “The business conducted a full review and implemented a number of cost efficiency measures, including closing three offices and realigning revenue with capacity by reducing employee numbers by 32 with a one-off restructuring cost of around $800k. However, business activity is showing signs of improvement and our order book has improved,” concluded Dr Prentice.

“Challenges remain but we are well advanced on a new corporate strategy designed to reposition the business for the future, including targeting planned increases in infrastructure spending in each of our main markets,” said Mr McDonald.

ENDS

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