Leighton was clearly the market darling at Valentines Day yesterday when it shares closed 8.20% or $2.07 higher at $27.30, following a record profit result.
Yesterday, the construction group booked an after tax of $190.0 million for the six months to December 31, 2006, up by 61% when compared to $118.1 million last year.
Total revenue, including joint ventures was to $5.72 billion, up 22% compared to $4.69 billion last year, while revenue from joint ventures increased by 5% to $805 million.
Principal revenue sources were engineering and infrastructure $2.2 billion, mining and resources $1.9 billion, building and property development $830 million and operations and maintenance services $853 million.
Leighton has declared an unfranked interim dividend of 45 cents per share, up 50% over 25 cents per share last year) was announced by directors.
The Australia/Pacific operations contributed $214 million profit before tax (up 73%) from revenue of $4.9 billion. Work in hand was up substantially at $16.9 billion.
Building and property revenue was up 10% to $725 million, while work in hand was up by 57% to $1.4 billion.
The development activities of Leighton Properties made an increased contribution. Leighton Properties is undertaking property developments with a total end value of approximately $2 billion and is working on securing another $1 billion worth of developments.
The first phase of Leighton Properties’ Green Square development in Brisbane has proceeded well and Leighton Contractors was awarded the construction of the next phase on the development, the $97 million North Tower.
Leighton Properties and Grosvenor are planning to develop a $350 million, 33-storey office tower in Brisbane’s CBD and have, since December, appointed Thiess to design and construct the building.
In Sydney’s west at Parramatta, John Holland completed Leighton Properties’ A-grade office tower development at 101 George Street. Nearby, Leighton Contractors’ subsidiary Broad made good progress on another A-grade development for Leighton Properties at 25 Smith Street.
In Canberra, Thiess progressed well on two developments for Leighton Properties at 18 Marcus Clarke Street and London Circuit.
In Victoria, Leighton Properties commenced the approval process for the development of an integrated business park at Cheltenham.
A highlight was the award to Leighton Contractors of the design and construction of the new Australian Defence Force headquarters near Bungendore in New South Wales. Leighton Contractors and ABN AMRO each have a 50% share in the Public-Private-Partnership vehicle developing this project.
John Holland performed well on the Southbank TAFE in Brisbane and a number of other building projects around the country.
Leighton said the longer-term outlook remains very positive driven by the group’s record level of work in hand, the continued strength of the core markets in Australia and an increasing exposure to the growth markets of Asia.
The Australian construction market, which has been through a strong upswing in recent years, should therefore continue to see infrastructure spending remain at recent historical high levels.
After five years of continuous growth the nonresidential building market is expected to continue growing in 2007 but to slow from 2008. Offices should remain a major driver of activity, based on the underlying strength of the economy while there will be some slowing of investment in retail and hotels.
Meanwhile, Leighton has made a lunge for a 40% stake in Devine for $94.7 million.
The acquisition, which is subject to the approval of Devine shareholders, substantially increases Devine’s ability to fund and develop its business and further diversifies the Leighton Group into the residential property market.
Leighton said its 2007 full year profit will rise 45% to approximately $400 million.
Australian Property Journal
