SEDGMAN UNEARTHS A PROFIT
Written on the 27 August 2015
SEDGMAN (ASX: SDM) is beginning to see the payoffs of its diversification strategy, increasing its profits during a challenging period.
The resource sector services company has reported an underlying profit after tax of $19.4 million for the full year, a significant increase from its break-even figure reported in the prior corresponding period.
This was from a sales revenue of $390.4 million, up from $355.9 million in full year 2014. A number of significant engineering, procurement and construction (EPC) projects progressed, compared with lower activity experienced the same time last year.
Sedgman CEO and managing director Peter Watson (pictured) says the company performed well in light of subdued market conditions.
This comes as its geographic focus is now split 60 per cent domestic to 40 per cent international, and coal projects comprise 40 per cent of the business, while other commodities take up the remainder.
"The full year results represent the third consecutive half year of strong profitability and delivery of sustained earnings through improved business performance," says Watson.
"Our commodity and geographic diversification continues to strengthen the business and our track record of successful project and operations delivery has continued."
Watson says Sedgman's differentiation from its peers has helped increase its order book to $509 million as of June 30, up from $385 million at that time last year.
The company is increasingly more mindful of metrics such as cost, time and facility performance to overcome subdued market conditions, and anticipates its strategy will deliver 'sustained earnings' in financial year 2016.
Sedgman will pay a fully-franked final dividend of 3.8c per share and a fully-franked 2.2c per share special dividend. As part of an enhanced capital management plan, the company intends to implement a series of fully-franked special dividends of 2.2c per share paid together with each interim and final dividend.