CARDNO POSTS 'RECORD' PROFIT

CARDNO Limited (ASX: CDD) today announced a profit of $77.6 million for the 2011-13 financial year.

Chairman John Marlay says the profit represents Cardno’s ninth consecutive year of "record growth achieved in difficult global circumstances".

“This performance was underpinned by our geographic and market diversity supported by the professional capabilities of around 8,000 staff in 290 offices in 85 countries,” says Marlay.

“Cardno’s diversity and international reach provides strength during challenging market and economic circumstances.”

Its board has declared a final dividend of 18 cents per share.

The board in reviewing its dividend policy also determined in future to prudently distribute the company’s available franking credit balance with each dividend recognising that, as the proportion of international earnings increase, the franking percentage may reduce.

With the news the company’s share price rose 0.16 per cent to $6.280, from an opening price of $6.270, after reaching a high of $6.350.

Managing director Andrew Buckley (pictured) says organically and through mergers and acquisitions Cardno was able to grow its profit and implement its expansion strategy despite market conditions affecting demand for services.

“All of our regions are trading profitably, demonstrating the robustness of the Cardno business model, and we retain a healthy forward pipeline of project work,” says Buckley.

“Our 2013 financial year revenue increased 23.8 per cent from last year to $1,195 million, largely due to the positive contributions of new merger partners.

“After several years of delivering strong organic growth, lack of confidence in the Australian market place, a slower than expected US economy and reduced activity on the Gulf Oil Spill Project resulted in an organic growth for the year of around one per cent down from seven percent at the half year.”

In regard to outlook Buckley says Cardno is cautiously optimistic about potential offered by a recovering US economy.

“And (we) recognise that a more favourable exchange rate will be positive for profit performance.

“However we are also aware that the Australian economy faces considerable challenges and Cardno is not immune to shocks and difficulties across our core markets.”

Key highlights of the results are:
• Record revenue for the year of $1,195 million - a 23.8 percent increase over the previous corresponding period (FY2012);
• Record net profit after tax of $77.6 million for the year - a 4.7 percent increase over FY2012;
• A final fully franked dividend of 18 cents per share declared resulting in a full year dividend of 36 cents - equal to FY2012;
• A record operational cash flow of $95.7 million for the year - a 31.8 percent improvement over FY2012;
• The balance sheet remains strong with $90.5 million of cash contributing to a net debt to equity ratio of 23.9 percent at financial year end;
• Robust forward project pipeline (Work in Hand) $710 million as at year end, up from $671 million last year.

Sector and service diversification continued in FY2013 via the following acquisitions:

• Mining and energy sector in the USA (Cardno MM&A);
• Environmental sector in the USA (Cardno EM-Assist & Cardno ChemRisk);
• Water and environmental sector in New Zealand (Cardno BTO);
• Surveying practice in Australia (Cardno Hard & Forester);
• Infrastructure engineering in South America (Cardno Caminosca);
• Construction materials testing in Western Australia (Cardno Geotech).