STATE'S STRUGGLE IMPACTS SEYMOUR WHYTE
Written on the 24 February 2016 by Laura Daquino
SEYMOUR Whyte (ASX: SWL) has eked out a profit of $200,000, challenged by the state of Queensland infrastructure.
Revenue for the half year period to the end of December was $166.4 million, up 35 per cent on the prior related period.
The Brisbane business reaped 45 per cent of its revenue in New South Wales over the period and expects its Queensland business to begin recovering from fiscal year 2019.
Seymour Whyte was impacted by two loss-making projects over the period, margin compression particularly in Queensland and increasing competition vying for available work.
Today's result is within November 2015 company guidance.
Seymour Whyte managing director and CEO John Kirkwood says it was an 'extremely challenging year for the industry' but 'active diversification' across states and type of work partially offset feeling the full brunt of this.
"We strengthened our position in new service markets with additional contracts awarded in the airports sector," says Kirkwood.
"Successful contract performance on major projects continues into the second half, on projects such as Townsville Ring Road 4, Green Square Trunk Stormwater Drainage Upgrade, and work at Sydney Airport."
"The Group is focused on improving profit across existing contracts, identifying new opportunities to enhance profitability, and utilising our strengths for significant new project opportunities."
Despite challenges, Seymour Whyte reports a strong balance sheet with unencumbered cash of $32 million. Its order book totalled $350 million at the end of the half year, of which $191 million is secured revenue for delivery at the end of the fiscal year.
In New South Wales, ten infrastructure projects were active during the half year to December.
A southern recruitment drive has resulted in more than 70 new employees joining Seymour Whyte over the past 14 months to support an increase in new state-wide projects.
New South Wales is poised to receive 59 per cent of all the company's transport projects over the next half, and QLD 64 per cent of utility projects.
Full year guidance has been revised to a range between $4 million and $5 million.
Seymour Whyte will pay a fully franked interim dividend of 1.75c per share, with expectations for a strong second half.