CONSTRUCTION group Watpac (ASX: WTP) has returned to black, reporting a $7.382 million profit for the half year ended 31 December after booking a $1.264 million loss in the previous corresponding period.
Watpac chair Chris Freeman said the result is at the higher end of previous guidance and is attributed to the successful reduction of overhead costs across the business, no impairment charges in the property development inventory and land and building assets, and the continued performance of the mining and civil business.
“Two years ago the Board committed Watpac to a capital management strategy designed to drive operational efficiencies, improve Watpac’s profitability and deliver sustainable shareholder value,” Freeman said. “The group’s solid half year financial performance is a significant step towards this goal,”
“Pleasingly, the group is now also in a position to reinstate dividend payments and a fully franked interim dividend of 2.5 cents per share,” he added.
Freeman said that while work volumes in the national construction sector remained constrained during the reporting period, Watpac maintained its margins and competitive edge to deliver a profitable result for the group. As at December 31, national work in hand position stood at $1.8 billion.
He added the board remained committed to divesting the group’s portfolio of property assets to further improve Watpac’s financial position.
CEO Martin Monro said Watpac is well placed to capitalise on new opportunities and will remain prudent in the execution of its growth strategy.
Property Review
