Opus International boosts annual profit 15% on Canadian, UK performance

Opus International Consultants [NZX: OIC], the listed engineering firm, lifted annual profit 15 percent as gains at its Canadian and UK operations offset declines its New Zealand and Australian businesses. The shares rose.

Profit was $26.2 million in the year ended Dec. 31, up from $22.8 million a year earlier, the Wellington-based company said in a statement. Sales rose 17 percent to $539.6 million.

Directors declared a final dividend of 4.9 cents per share, payable on April 1, with a March 18 record date. That takes the annual payout to 8.9 cents per share, a 13 percent increase on the previous year. Shares of Opus climbed to $1.52, its highest since late November, and were recently up 11 percent at $1.50.

Last November the company shrank its leadership team to eight from 12in a bid to compete in "an increasingly competitive market" with the changes "designed to increase efficiency and profitability," chief executive David Prentice said at the time.

Opus's New Zealand operations reported an 8.1 percent fall in earnings before interest and tax to $28.5 million due to a large project loss, while sales rose 1 percent to $287.5 million, the company said.

"Despite the challenging environment, we have secured a number of strategic commissions, including six out of nine significant long term Network Outcome Contracts for the NZ Transport Agency and we are leveraging new opportunities in the Pacific," Prentice said in a statement today. "The Christchurch earthquake rebuild continues to be a key component of near-term economic activity but other sections of the economy have some momentum."

Its Australian unit's Ebit turned to a loss of $675,000, from a profit of $656,000 a year earlier as sales declined 15 percent to $64.4 million. Opus blamed a slowdown in the resource and infrastructure sectors as it recognised a $6.7 million impairment, which it said was a "pragmatic reflection of a continuing weak economy outlook" and was expected to remain for some time.

The company's Canadian unit increased underlying Ebit 41 percent to $7.5 million. The company acquired Stewart Weir, a Canadian consultancy, for which it deferred a consideration release of $11.5 million, and the unit lifted revenue 133 percent to $137.3 million.

Opus's UK business increased Ebit 80 percent to $1.1 million, while sales increased 26 percent to $49.3 million, underpinned by a recovering UK economy and opportunities in "core growth sectors, including rail, asset management and highways work," Prentice said.

The company's outlook was mixed as it diversified operations to manage economic uncertainty, it said.

(BusinessDesk)