Brierty Delivers Steady Interim Profit
Civil and mining contractor Brierty Limited (ASX: BYL) today announced a net profit after tax of $1.85 million on revenue of $100 million for the Half Year ending 31 December 2010.
The company reported EBITDA of $7.4 million, up slightly from the $7.0 million last year. Net profit before tax was stable at $2.7 million ($2.8 million previously) and an interim dividend of 0.5 cents per share has been declared by the Board.
Net profit after tax at $1.8 million was down 16% on the previous corresponding period, mainly due the previous year’s result being boosted by a one-off capital expenditure tax benefit.
The 63% increase in revenue was pleasing, reflecting a generally improving economy as well as sales performance at the Bellamack residential subdivision in the Northern Territory.
However, the Company experienced pressure on operating margins during the period, particularly in the Western Australian land development sector, with several projects performing below expectations. This division has historically had the lowest average margins among Brierty’s business units, a reflection of the competitive environment that exists in this market place.
Pleasingly, the Bellamack subdivision in the Northern Territory is continuing to perform well. A total of 83 lots have settled in this first half, and a similar number is expected to settle in the second half of this financial year. The on-site sales office has now opened and the display village is expected to open in early June 2011. The majority of lots settling in the next 12 months have been pre-sold.
Brierty expects the Company’s financial performance in FY11 to be broadly in line with the previous year when net profit amounted to $5 million.
However, significant new contracts and an uptick in general economic activity are expected to generate increases in both revenue and earnings in FY12.
In terms of future opportunities, there are a number of significant resource infrastructure projects currently being tendered. Brierty considers it is well placed to secure one or more of these significant contracts.
The recently announced Karara Haematite project, once contract negotiations are finalised and mining commenced, will see a significant change in the scale of our mining business. This project should commence in the middle of this calendar year and deliver at least $150 million in revenues over the next three to four years.
The Board of Brierty believes the Company has a promising future and that shareholders should see improving returns from FY12.