PROFIT INCREASE BUT ROOM FOR IMPROVEMENT FOR CARDNO

Written on the 19 August 2014

PROFIT INCREASE BUT ROOM FOR IMPROVEMENT FOR CARDNO

CARDNO Limited (ASX:CDD) has posted a full year profit of $78.1 million, in the face of challenging international market conditions.

Net profit after tax was 0.6 per cent higher than FY13, with a 2.7 per cent increase in earnings before interest, tax, depreciation and amortisation (EBITDA) to $141.7 million.

Severe weather conditions in the US and mining slowdown in Australia adversely impacted the infrastructure and environmental firm’s key projects.

Chairman John Marlay says although the result is marginally higher, Cardno will focus on strengthening its financial position in FY15.

“During FY14 we experienced lower than expected levels of organic revenue growth and reduced EBITDA margins,” Marlay says.

“While we are not satisfied with this level of performance, we endorse efforts taken by management to deliver this result and to better position us for improved performance.”

The decline was partially offset by the recent acquisitions of Cardno Haynes Whaley and Cardno PPI, as well as streamlined operations and the closure of 17 surplus offices.

CEO Michael Renshaw (pictured) says conditions are expected to improve in the second half of FY15, as economic activity in the US improves.

“Our teams are focused on organic revenue growth and on improved operational efficiency,” Renshaw says.

“Overall we expect improved performance in FY15.”

Renshaw says the Australian and New Zealand markets remain challenged with a gap between reduced resources investment and increased spend on government infrastructure and private sector development.

The full year dividend of 36 cents per share has been maintained, with a final fully franked dividend of 17 cents to be paid on October 10.

The announcement follows Cardno’s successful closure of its initial US$150 million private placement note offering yesterday.

The transaction is divided between US$50 million with a seven year term and US$100 million with a 10 year term.

The offering will diversify the company’s funding sources and extend its maturity profile with a better value, compared to existing debt facilities.


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